In a surprise announcement today, Caspian Networks disclosed that its president, Grahame Rance, left this week to join SBS Technologies Inc. (Nasdaq: SBSE), a company that makes embedded electronic computer components for a range of industries, including telecom (see Caspian CEO Quits).

Caspian is a late-stage startup founded by Internet luminary Lawrence Roberts (see Dr. Lawrence Roberts). It's working on core Internet routing technology, and despite its secrecy, signs are that the company's plans are highly ambitious (see Caspian Networks).

While Roberts is clearly the technical visionary behind Caspian, the company's success in the real world of business has been credited to Rance, who was formerly an executive VP at Nortel Networks Corp. (NYSE/Toronto: NT). Under Rance, Caspian has managed to collect $140 million in funding and expand to include more than 300 employees in seven offices.

Now, Rance is suddenly gone, just when the company has reached a critical juncture. On Monday, he was president of Caspian; on Friday, he was already in meetings at his new post as CEO of SBS.

Caspian seems stunned by the news, and has no explanation. "It was unexpected," says spokesman Dallas Kachan. Caspian's named one of its top private investors, David E. Liddle, as interim CEO. Liddle also is a general partner with one of Caspian's VCs, U.S. Venture Partners.

Whether Rance wearied of standing in Roberts's shadow and sought greener pastures is unknown. It's also tough to tell whether or not he simply tired of working for a startup. In a release put out by SBS this morning, Rance appears to express interest in taking up a post at an established company rather than a startup. "This is just the type of public company I look forward to leading." (Emphasis added.)

At press time Rance himself had not returned phone calls made to his new digs.

The impact on Caspian remains to be seen. Opinions are mixed about David Liddle, a seasoned executive and technologist with a varied career who most recently headed up Silicon Valley incubator Interval Research in partnership with Microsoft co-founder Paul Allen.

Still, with Roberts still firmly on the marquee and backing from a slew of investors that include top firms like Merrill Lynch & Co. Inc. (NYSE: MER) and Salomon Smith Barney, Caspian seems to have a better chance than most startups of weathering the storm.

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com