DeNuccio Joins Redback
Redback Networks Inc. (Nasdaq: RBAK) announced Wednesday that it has hired former Cisco Systems Inc. (Nasdaq: CSCO) executive Kevin DeNuccio as its new president and CEO. DeNuccio also joins Redback's board of directors, while Sequoia Capital partner Pierre Lamond will stay put as the company's chairman (see Redback Hires DeNuccio).
Last week, Light Reading first reported that DeNuccio had resigned from Cisco and that he had been in job interviews with Redback's senior staff (see Cisco's DeNuccio Talks With Redback). Another former Cisco executive, Kevin Kennedy, had also been considered for the job, but talks broke down and Kennedy instead took a post at Openwave Systems Inc. (Nasdaq: OPWV) (see Kennedy Lands at Openwave).
Redback has been looking for a new CEO since late May, when Vivek Ragavan resigned.
DeNuccio spent six years at Cisco, where his last post was as the top sales boss in Cisco's service provider line of business. He was replaced at Cisco in February. Cisco has maintained that he was on a leave of absence, until last week when it acknowledged his resignation. Prior to Cisco, DeNuccio was president and CEO of Bell Atlantic Network Integration Inc., a Bell Atlantic (now Verizon Communications Inc. [NYSE: VZ]) subsidiary.
Of course, one man does not a turnaround make. Now that someone has accepted Redback's top job, Wall Street has turned its attention to Redback's forthcoming edge routing product, which many hope will rescue it from the doldrums it faces in the Sonet market.
"It's good to have permanent leadership, but the real issue is whether Redback can deliver a good edge router and build some revenue growth around that," says Stephen Kamman, an analyst at CIBC World Markets.
"[DeNuccio] will definitely help Redback build relationships with service providers, and he will help their sales efforts," says U.S. Bancorp Piper Jaffray analyst Conrad Liefur. "But the questions that remain are whether there will be real market demand for Redback's products or if there are too many players in its space."
In a conference call with analysts Wednesday afternoon, DeNuccio said the new product was finished and was in trials with more than 10 carriers. "One of the most exciting things we have in the company is the IP router coming to market right now... Cisco's virtually the only player in that space right now, and there's plenty of room for competition."
DeNuccio also commented briefly on how he views Redback's product after having helped sell Cisco's ONS 15400 next-generation Sonet add/drop multiplexer. "The [Redback SmartEdge] is a very competitive product in its space... It's a more intelligent platform, in my opinion."
Lately Redback's managers have been under pressure to turn the company around. In one year, the company's stock price has dropped from $132 a share to less than $5. Earlier this month, Redback asked its employees and executives to take a voluntary pay cut of as much as 25 percent in exchange for more stock options. The new stock option program was voluntary for employees but mandatory for executives.
DeNuccio didn't have any immediate plans for realigning Redback's management team. But he did say that one of the first positions he'll likely fill is a senior vice president of market and business development to help with the market entry of Redback's edge router.
- Phil Harvey, Senior Editor, Light Reading