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Kheradpir's Coriant Comeback

Ray Le Maistre

What just happened at Coriant?

The optical transport vendor has named Shaygan Kheradpir as its new CEO. (See Coriant Appoints a New CEO.)

If that name sounds familiar, it's because Kheradpir made headline news in 2014 for his short and eventful tenure as CEO of Juniper Networks Inc. (NYSE: JNPR), where his ten months in the hotseat started with a public attack by activist investors, continued with a strategy review, job cuts and executive defections, and ended with his resignation in November last year following a "review by the board of directors of his leadership and his conduct in connection with a particular negotiation with a customer." (See Turmoil at Juniper as CEO Quits.)

That's not going to look great on a résumé, right?

Yet less than a year after his high-profile exit from Juniper, Kheradpir is now running Coriant , taking over from Pat DiPietro, who becomes vice chairman and returns to his role as operating partner at Marlin Equity Partners , the private equity company that built Coriant by stitching together the optical unit of Nokia, Tellabs and part of Sycamore Networks. (See Coriant 7100 Pico Targets Metro Edge, SoftBank Choose Coriant for Metro and Tellabs to Be Sold to Marlin for $891M.)

Kheradpir isn't walking into the Coriant role blind: According to the vendor, he has been working "closely with the senior management team since earlier this year in the role of Operating Executive to Marlin Equity Partners."

The vendor also says that Kheradpir is "a recognized business and technology leader with over 28 years of executive experience across the telecom, technology, and financial services industries."

DiPietro is quoted as saying: "We are honored to welcome Shaygan to Coriant and fortunate to have an executive of his caliber leading the company. His strategic insight and guidance on focused operational execution have been invaluable since we began working together earlier this year, and we are confident in his ability to drive Coriant to the next level of growth."

That's all very nice, but out in the tough, backstabbing world of business, you're only as good as your last job, right?

One Juniper employee, talking to Light Reading on background, noted that the difference at Juniper under the control of Kheradpir and his successor, Rami Rahim, is "like night and day," with the New IP vendor now seemingly much more settled and focused under Rahim. "It's incredible. I don't know what Coriant is thinking," added the Juniper staffer.

Want to know more about the optical networking sector? Check out our dedicated optical content channel here on Light Reading.

Kheradpir undoubtedly has plenty of industry experience, having spent time at GTE and Verizon Communications and spending time as the chief operations and technology officer at Barclays Bank. But how suited is he to running an optical systems vendor with about 500 customers and annual revenues of more than $1 billion (estimated) that is seeking to differentiate itself and grow in a highly competitive market where the competition comes from the likes of Alcatel-Lucent, Ciena, Cisco, Huawei, Infinera and many others?

It may be unfair, but perception counts for a great deal and you can be sure that Coriant's rivals will be making the most of his recent employment history. This looks like a risky appointment by Marlin Equity Partners -- for Coriant's and Kheradpir's sake, I hope I'm proved wrong.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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User Rank: Lightning
12/23/2015 | 10:42:30 AM
How did we get here?
Thanks for asking the question.

Some questions are easy to ask, but hard if not impossible to get answered.

I think the larger question is: what is the basis for the selection of the existing management team, not just the new CEO.

Each of these companies, made a long string of decisions that led them to be the also-rans in the industry. One has to assume that the new owners believe they can bring some fresh management and efficiencies to the new combination to make things profitable. Later doing an IPO or liquidation to earn a return on investment.

Each of the companies in the new entity, for whatever the reasons are, failed to demonstrate viability as stand alone entities in their business sector, which begs the question.......what's different this time?

In the case of Tellabs, the company made a decision to narrow their product lines and business model from addressing the needs of a broad swath of Telecom and DataCom customers, (public, private and government), by offering hundreds of different products and competing in many product categories, and many channels of distribution to focusing exclusively on offering Synchronous Optical Network SONET products to the Bell Operating Companies (the big 5 or 6) and the long haul carriers who had already begun the move to DWDM. In pursuit of this goal, the management at all levels marched in lock step.

The consistent string of acquisitions succeeded mainly in vaporizing hundreds of millions of dollars of cash, the notable exception was a Finish Company; the author and manager of the acquisition was displaced by a new hire with zero product knowledge, after the deal was wildly successful. This was no blip.

Tellabs succeeded in their single minded goal of focusing on SONET, Cross Connects, and just Telcos leading to the crash and burn of the company. One has to wonder, how many of the managers are still manning the key decision making positions?

Reading the 1998 NYT article on the failed Ciena Merger, it may be interesting to do a retrospective article on where are they now. Ciena looks like they will finish 2015 at $2.5B in revenue with greatly expanded product lines from their 1998 business model.


User Rank: Blogger
10/5/2015 | 10:50:32 AM
People, money and technology
There are three main things that influence what goes on in this industry -- people, money and technology -- and the people part of it is sometimes underplayed.

I'm not sure that Kheradpir had the optimum team supporting him during his time at Juniper and he did, in fairness, walk straight into an activist investor maelstrom. 

But... he now carries a reputation in the communications networking industry as the guy who crashed and burned at Juniper. Let's see if eh can tuirn that reputation around.
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