Caspian Names New CEO
The company plans to announce tomorrow that it has hired a new president and CEO -- Bill Sickler, formerly CEO of Gadzoox Networks Inc. (Nasdaq: ZOOX), a publicly traded maker of Fibre Channel gear. Company officials also confirmed it has laid off about 8 percent of its staff in order to lower its burn rate for the lean times.
Founded by Internet luminary Lawrence Roberts (see Dr. Lawrence Roberts), Caspian was faced in March with the surprise defection of its CEO, Grahame Rance (see Caspian's CEO Suddenly Bolts). Sickler is notable for his experience in taking Gadzoox public and having several decades of experience in the networking market.
According to Caspian, the layoffs affected about thirty of the company's 300-odd employees at all levels in the legal, sales, marketing, and operations groups. Engineering was "untouched," the firm said.
As a result of the layoffs, some employees are answering to interim bosses until the affected divisions can be restructured. Caspian says it made the cuts to "reduce its burn rate," citing the need to "[manage] cash reserves wisely, especially in today's lean investment climate."
Compared to some other startups, Caspian has a nice pile of cash to manage. It has obtained $140 million in three rounds of funding from a variety of sources, including ABN AMRO, Merrill Lynch & Co. Inc. (NYSE: MER), Salomon Smith Barney, and U.S. Venture Partners .
This doesn't mean that Caspian will have an easy time getting more money. Caspian spokespeople say the company isn't seeking more funding at this time and instead wants to make the best use of what it's already got. Given the current miserable climate for raising more money, nobody knows how long it could be before the situation improves.
Prior to Gadzoox, at which he was active in preparing the company for its IPO, Sickler spent 12 years with Ungermann-Bass. He also captained the varsity basketball team at his alma mater, Princeton University, from 1970 to 1971.
On the downside, Gadzoox did suffer some financial setbacks under Sickler. But analysts say the problem was fairly straightforward. According to one analyst, Gadzoox focused heavily on Fibre Channel hubs when it turned out the market wanted switches. Subsequently, Gadzoox had to play catchup in the SAN switch market, and just today unveiled a line of SAN fabric switches (see Gadzoox Launches Slingshot).
Sickler faces a technological marketing challenge at Caspian, too. The startup's goal of packet-based optical core switching is highly ambitious, and observers question just how long it will take to get it out the door and into carriers' hands (see Caspian Networks).
But Caspian's undeterred. Spokespeople say Sickler's focused on executing the company's plans as stated, starting with finalizing the reorganization of the divisions that have suffered layoffs
-- Mary Jander, Senior Editor, Light Reading http://www.lightreading.com