Another Cyras Exec Quits

Cyras, pegged as one of the hottest optical startups around, is losing some steam as key executives jump ship. The result? Talk of an IPO is being replaced by gossip about the fleeing executives (see Cyras: Crisis? What Crisis? ).

Following hard upon the departure of the CEO, Stephen Pearse, and the director of communications, Gary Clemenceau, in September, Cyras announced this morning that Ronald Kelley, vice president of North American sales, has resigned as of November 9 (see Cyras CEO Resigns). Kelley left Fujitsu Ltd. (KLS: FUJI.KL) last spring to join the startup and brought with him several colleagues from Fujitsu and Alcatel SA (NYSE: ALA: Paris: CGEP:PA).

“Honestly, it was a rough eight months,” says Kelley. “When Steve and Gary left, it became a hard place to work.”

Cyras’s problems have had more to do with the political interworkings of the company than with any product related issues, says Kelley.

“I would say there was a tug of war over who would have the power,” he says. “And even though we have all kissed and made up, the scars run deep. The best thing for me personally was to leave.”

When companies grow from small startups into larger companies, there are changes that must be made, says Kelley, adding that Cyras is going through these growing pains right now.

“Cyras is a founders' company. They want things done their way. You can say that everyone owns the company, but the board backed the founders. In the end, I’m sure the founders will do the right thing.”

This problem is not uncommon in the optical startup world. Zaffire Inc. has struggled with some of the same issues (see CEO Bloodbath Points to Pressure) and (see Zaffire Keeps It in the Family ).

Kelley says he doesn’t harbor any ill will toward his former employer. “The founders deserve a lot of credit for what they have done. Alnoor [Shivji], Sunil [Tomar], and Shekhar [Mandal] are all good people, and I wish them the best.”

But he contends they are all juggling too many responsibilities. Shivji, for example, is acting CEO, president, chief operating officer, VP of marketing, and a board member. “Alnoor is a good man. But he has too many jobs. He has to give some of that up and bring in the talent to run the business.”

Kelley adds that Cyras missed a huge opportunity when they let Steve Pearse leave. “Steve was a great leader and the perfect CEO for Cyras. It’s a shame, but he butted heads with a lot of people, and he left for pretty much the same reasons that I left.”

Kelley has already secured a new job with a stealth startup called Whiterock Networks. Although he says the technology differs from Cyras’s, Whiterock, headed by CEO Lonnie Martin, formerly of ADC Telecommunications Inc. (Nasdaq: ADCT), also targets optical transport in the metropolitan area network. At his new post, Kelley is barred from recruiting any of his sales team from Cyras.

“I only hope that I can build as good a sales team at Whiterock as the one I left at Cyras,” he says. “They are really a fantastic group of people. Cyras will be successful -- I have no doubt about that. And I encouraged all of them to stay and reap some of the benefits.”

In the wake of Kelley’s departure two Cyras veterans will be taking the reigns of the sales team. Jim Sparks has been promoted to associate vice president of North American sales, and David Geisinger has been promoted to associate vice president of international sales.

Sparks was one of the early members of Cyras's sales team. Like Kelley, he left his position at Fujitsu to work at Cyras early in 2000. Geisinger, was actually Cyras's first sales person on staff. With nearly thirty years of telecommunications experience under his belt, he will be responsible for leading and expanding Cyras's international sales effort.

A Cyras spokesperson says that the company cannot comment on specifics regarding employees' departures, but she did say that Kelley’s leaving has nothing to do with the the product line or the health of the company.

-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com

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