Avici Shuffles Top Execs
Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7), which makes high-speed routers for the core of the Internet, promoted its two top executives today.
Surya Panditi, who has been chief executive officer and co-chairman, was named chairman of the board. Steve Kaufman, the company’s chief operating officer, is taking over for Panditi as CEO. The appointments will take affect July 1, 2001.
"This is a natural progression for the company," says Esmeralda Swartz, director of strategic marketing for Avici. "We're passing the chairmanship from the lead investor to the operating management."
Panditi has served as president, CEO, and director since 1997. On January 2, 2001, he was named co-chairman of the board, a seat he shared with Jim Swartz, general partner and founder of Accel Partners, the lead investor in Avici. Prior to coming to Avici, Panditi served as vice president and general manager of the LAN infrastructure business unit at U.S. Robotics. Panditi also has worked at Telco Systems, Ungermann-Bass, and Intel Corp. (Nasdaq: INTC)
Kaufman came to Avici from Lucent Technologies Inc. (NYSE: LU) back in September 2000 when he was appointed COO. While at Lucent, he held a variety of positions including president of Lucent's multiservice core networks division, vice president and general manager of core switching, and VP of product management for Lucent's carrier networks division. He also served as a general manager in Lucent's microelectronics group, now known as Agere Systems (NYSE: AGR). Like Panditi, Kaufman also held positions at Intel, where he worked in marketing for the Pentium processor family of products.
The promotions come at a time when Avici is experiencing some success breaking into the core router market. According to a report issued this month by The Dell'Oro Group, Avici accounted for 2 percent of the high-end router market. This was a 78 percent quarter-over-quarter increase, according to the report.
But analysts still say that Avici needs to find more customers to generate revenue. During its last earnings conference call in April, the company named three customers that contributed 10 percent or more in revenue: AT&T Corp. (NYSE: T), Enron Broadband Services Inc., and Qwest Communications International Corp. (NYSE: Q) (see Crunch Time at Avici? ). The company also recognized revenue from Williams Communications Group (NYSE: WCG) and it says it has seven other service providers lined up. But still the bulk of its revenue comes from the AT&T contract.
The company still has a long way to go in catching up to the market leaders. Dell’Oro also reported that Cisco Systems Inc. (Nasdaq: CSCO) had 59 percent of the market and Juniper Networks Inc. (Nasdaq: JNPR) 38 percent.
Recently, questions have arisen regarding Avici’s public offering last summer, which shot up over 200 percent in its first day of trading (see Avici and Corvis Make Stunning Debuts). A class-action lawsuit filed in New York against the company alleges that its prospectus filed with the Securities and Exchange Commission before its IPO misled investors. It accuses the company’s underwriter Morgan Stanley Dean Witter & Co. of failing to disclose certain investors that were provided significant amounts of restricted Avici shares in exchange for undisclosed commissions. The complaint also alleges that Morgan Stanley allocated shares in the IPO to customers in exchange for the customers' agreement to purchase Avici shares in the after-market at pre-determined prices.
In a statement issued back in April, Avici and its officers denied any liability in the litigation (see Avici Hit With Shareholder Suit). At midday, Avici was trading at $13.93, up about 1.68 percent from the day before.
- Marguerite Reardon, Senior Editor, Light Reading