New Kid on the Cisco/Juniper Block

Tony Li has set his startup's sights on domination of the router market. His track record speaks volumes

October 19, 2000

4 Min Read
New Kid on the Cisco/Juniper Block

Is the networking industry’s IP router duopoly set to become a terabittriumvirate?

It will, if Tony Li gets his way. He’s the notorious IP routing maven whocut his teeth at Cisco Systems Inc. (Nasdaq: CSCO) designing the GSR 12000, then jumped ship to Juniper Networks Inc. (Nasdaq: JNPR),where he helped develop the industry-changing M40 Internet Backbone router.

Now, he’s at it again. Li recently moved from Juniper to the unfortunatelynamedProcket Networks Inc., a startup based in San Jose,Calif. (see Procket Processes a Dream Team). While Procket flatly declines to reveal what it’s working on, Light Reading’s sources in Silicon Valley are considerablymore forthcoming. And the facts behind Procket add up to one of the moreinteresting stories in optical networking this year.

First, the basics: Procket is working on a very high-performance IP routingplatform. “It’s a very high-density OC192/768 box, with interfacesaggregated around a switch fabric, and it competes with the next-generationrouters from Cisco and Juniper,” says one of Light Reading’s anonymous sources.

Talk about a change in plan. Procket was originally founded by twomicroprocessor experts and former employees of Sun Microsystems Inc. (Nasdaq: SUNW), SharadMehrotra and Bill Lynch, with the intention of developing OC192 and OC768components -- not a system.

That all changed when U.S. Venture Partners, the lead VC investor inProcket, brought in Tony Li -– router developer extraordinaire. (Thetransfer was instigated by Stuart “Stu” Phillips, a general partner at USVP,and Li’s former boss at Cisco).

And where Li goes, talent seems to follow. He has reportedly alreadyrecruited two key engineers away from Cisco to help build the mondo routingplatform: Dino Farinacci, a respected IP software engineer, and BruceWilford, a hardware-switching expert. (Cisco would not confirm that they hadleft, but both are now listed in Procket’s automated company phonedirectory). Li also is in the process of luring away at least one Juniperexec, Light Reading’s sources say.

In addition to losing staff to the startup, Cisco has another excellentreason to be miffed with its former employee. Along with USVP, Cisco wasactually a lead investor in Procket. Light Reading sources say that itfunded the company with an eye to using its OC192 (10 Gbit/s) and OC768(40 Gbit/s) components in its high-performance routing platforms.

But now that Procket has pulled a strategy switcheroo, Cisco has not onlyacquired a potentially powerful new competitor (one that it funded, noless), it’s also lost a potential source of the high-speed interfaces thatit so desperately needs to fill out its routing product line. Cisco has yetto ship an OC192 card; a spokesperson says it will plug the gap throughin-house development and acquisitions. Last year, the vendor spent $435million to buy StratumOne Communications, which was developing an OC192packet-over-Sonet (POS) interface.

Cisco is not the only unhappy camper. Juniper also is said to have takenumbrage –- and not just with Li, its former employee, but also with thethree VC firms that are funding Procket. That’s hardly surprising; theyhappen to be three of the same VCs that funded Juniper: USVP, New Enterprise Associates, and Redpoint Ventures.Juniper executives are said to have complained to the VCs that they are nowfunding a direct competitor.

Juniper declined to publicly comment on the VC’s actions.

The presence of Tony Li on staff adds significant bite to Procket's attempt to take on the big dogs of the routing industry. Li’s track record of building teams thatcreate stable router software –- especially that all-important and gnarlyBGP (border gateway protocol) code -– gives Procket a huge advantage overother core router wannabes, such as Lucent Technologies Inc. (NYSE: LU) (viaits Nexabit acquisition), Charlotte’s Web Networks, and Pluris Inc.

“If you step back and look at the world today, there are only two companiesthat have a really stable BGP-4 product. And that’s Juniper and Cisco. AndTony Li is the common thread in both of them,” says Dave Schaeffer, CEO ofCogent Communications Inc., a service provider. Schaeffer declined to comment onother aspects of this story.

Then again, some observers suggest that Li’s personality could also be aliability.

“Li is brilliant. He’s probably the most gifted BGP implementation engineerin the world. But I understand that he has both an ego and a temper. Thevolatility of his personality may prove to be a problem for Procket,” saysan executive at a service provider, who requested anonymity. “You can havethe most brilliant person in the world, but if they can’t work with a team,the team won’t work.”

Li reportedly quit his jobs at both Cisco and Juniper -– leavingmultiple millions in unvested stock options on the table at each. Industrylegend has it that he nailed his Cisco resignation to his manager’s door.Li declined to comment.

In an interesting twist, that manager was none other than Stu Phillips, whowent on to become a VC at USVP and lead the investment in Procket. “I guessthose guys kissed and made up,” says a VC at another firm, speaking off therecord.

-- Stephen Saunders, US Editor, Light Reading

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