Li Quits Procket

This week is a pivotal one for router maker Procket Networks Inc. The company announced a huge customer -- its largest product deployment to date. But the news was somewhat overshadowed by the loss of two top executives, including Procket founder Tony Li.

Procket today revealed the details of big core routing deployment with Australia's Academic and Research Network (AARNet), where Procket was chosen over chief rivals Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (Nasdaq: JNPR). On Monday, however, Light Reading sources say, the company told its employees that Chief Scientist Li has turned in his resignation.

Also at that Monday meeting, Procket brass announced that Vito Palermo, the company's chief operating officer, has left the company as well.

Procket spokesmen confirmed Palermo's departure, but declined to address Li's situation directly. "We don’t discuss personnel issues externally," says Cary Hayward, director of marketing for Procket.

"I can tell you that Vito has resigned his position here... and we're going to miss him," Hayward, then added, with apparently no intended irony.

Of course, it's no wonder Procket is hesitant to talk about Li's resignation now: He's still technically employed by the company and is working with AARNet right now to make sure their deployment goes smoothly.

It's that customer win -- and Li's work there -- that Procket's public relations team is keeping in front of the media as its management shakeup continues. "This is the largest award we've received to date," says Hayward.

"Despite strong bids from Cisco and Juniper, we've chosen relative newcomer Procket to power our network," George McLaughlin, AARNet's director for international developments told the tech publication Australian IT on Monday.

Meanwhile, evidence is piling up that Li is not long for Procket. "I will continue with my 'tour of duty' here in Australia, but will be leaving the company after that," Li wrote in a note to fellow Procket employees, according to one Light Reading source. "I do not like letting you down, but the alternative to doing so is far worse. I cannot go into it further, I just hope you will trust me when I say that there are some things that a man has to do if he wants to retain his basic ethics and morals."

Li could not be reached to elaborate on the note, its source, or his employment status.

Palermo left Procket because he had wanted to succeed Randall Kruep as Procket's CEO, according to a former Procket executive. Procket's board instead recruited Cisco VP Roland Acra for the top spot.

It's not clear whether Palermo's and Li's departures were at all connected. A call to Palermo at home was not returned.

What is clear is that there's no mistaking how influential Li is to Procket.

Procket was founded in 1999 as a network processor company created by William Lynch, lead architect for Sun Microsystems Inc.'s (Nasdaq: SUNW) UltraSparc 4 microprocessor, and invested in by the likes of Cisco.

Li, another Procket founder, came aboard to devise software to make the chips suitable for routers. Li provided the systems expertise chip companies crave, as he had worked on Juniper's M40 and Cisco's GSR 12000 core routers.

After Procket's board decided it should be a router company instead of a chip maker, the company faced loads of promising startups, including Charlotte's Web Networks, IronBridge Networks, and Pluris -- none of which are still around.

Procket's staying power always resided in its top-flight technology and technical talent, as well as its ability to constantly attract loads of funding. To date, Procket has raised more than $300 million, the most recent installment being a $30 million deal (see Procket Stuffing Its Pocket).

Procket lore surrounding Li always makes for a long day at the water cooler. He's been said to butt heads with Procket's previous CEOs and senior managers. He has also quit his past jobs after allegedly becoming dissatisfied, leaving millions of unvested stock options on the table at each place (see Procket CEO Resigns).

But there's no question Li put his stamp on Procket. Its first CEO was Sharad Mehrotra, who was replaced as CEO by Redback sales exec Randall Kruep in 2001. Kruep resigned last June, with Acra taking his place earlier this month (see Kruep Leaves Redback for Procket, Procket CEO Resigns, and Procket Gets Cisco Exec). Li had a hand in Kruep's undoing, as well as Acra's hiring, according to Light Reading sources close to Procket.

Now folks will question whether Procket is as viable a company if and when Tony Li acts on his resignation. Procket would argue it is, especially given today's customer announcement, an important one for Procket in its quest to be considered a serious contender for large carrier networks.

Others aren't so sure; Procket and Li are inextricably linked in their minds. "If this doesn't put the nail in the coffin, I'd be surprised," says Esmeralda Swartz, VP of marketing at Procket competitor Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7). "It's only one guy, but Tony Li sort of is Procket. The other folks don't have the same persona."

— Phil Harvey, News Editor, and Craig Matsumoto, Senior Editor, Light Reading

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Tony Li 12/5/2012 | 2:14:40 AM
re: Li Quits Procket Of course not! But the way people here talk about him and how he's portrayed in the press releases sure make it sound like he's devine. He is a great figurehead for getting press coverage and funding, but as far as being technical, there are many who are in the same league. Radia Perlman, Dave Katz, Paul Traina, Yakov Rekhter, John Moy, Ross Callon, just to name a few. There are many more unsung heroes who do are just as good as Li but do not get the publicity.

Tony, please chime in and give credit to the other folks where credit is due.

This one has been bugging me and I can now set the record straight. Yes, there are many other folks who deserve far more credit and publicity than I do. Your list above, plus some other names like Oran, Chiappa, and Halpern should be included. The list is quite long. The visibility that has been thrust upon me is neither deserved nor welcome and has simply been a convenient tool for others to further their own ends.

I am simply one honest and stubborn man trying to help build the Internet. My value is not in any particular technical area but in the fact that I am a perfectionist, trying to do a good job for my customers and my company. I share the original vision of the Internet as THE communcations infrastructure for the forseeable future and I do what I can to move the Internet forward. Unlike many others in the industry, I am unwilling to lead my customers down the garden path to make a sale and from that, I believe, I have a long standing relationship with Tier 1 network engineers.

To those that feel that there is some competition as to who is the "coolest", I'll point out that there is no real competition. Only one person on the above list is also an international name in rock n' roll. When it comes to cool, I'm not even in the running.

vr100 12/5/2012 | 2:30:10 AM
re: Li Quits Procket You got it in reverse.
opticalwatcher 12/5/2012 | 2:30:13 AM
re: Li Quits Procket "Perhaps I am naive...but at least I'm not trying to sell my products on a LR chat board"

Gee, you attack his router and he defends them point-by-point, and then you the accuse him of advertising.

Is it a requirement of the message board that all criticisms of products be one-sided? That would be very depressing! Maybe they can call it the "Lightreading Shootout" section.
Mezo 12/5/2012 | 2:30:19 AM
re: Li Quits Procket Perhaps I am naive...but at least I'm not trying to sell my products on a LR chat board...hardware maybe you can find new talent...but in software you've got to keep the coders to be consist & maintain quality of those features...you know that...or you don't.

...and do us all a favor and buy more banners from LR...it's better for your image...then byteme2 :]

See you at lunch...
byteme3 12/5/2012 | 2:30:31 AM
re: Li Quits Procket >The biggest problem Avici has is that it has >been bleeding talent for years and there is no >one left to enhance the box...I know because >many of my friends were there an have moved on...

If you think companies don't lose people and hire other people then you are naive. Since we continue to release new linecards and software features, we seem to have handled the downturn well. Avici, like every vendor out there, had layoffs during the lean years, which no one wanted. It is a horrible, horrible experience for all involved. But we have still been able to advance hardware and software even during the bad times, and have been hiring for the upturn since.
No one is irreplaceable - even Tony Li. :)
byteme3 12/5/2012 | 2:30:32 AM
re: Li Quits Procket >Avici has no advantage at all. Its an old, tired
>product with no particular postives.

Well, that's an interesting spin. Since avici has been releasing new linecards and software features continuously since our inception, you must be referring to the chassis as the "old" part. Actually we've been introducing new chassis sizes, too, but the architecture of them is similar. But yes you can still run the chassis from 4 years ago with today's newest linecards, but isn't that a good thing?
Or maybe you're referring to the fabric design, in that it's still toroidal? We have increased the speed of it for higher capacity cards, but you're right it still supports the older speed too. The funny thing is avici considers that one of their big advantages: you don't have to throw out the older linecards when you buy new capacity ones. They can work in the same system. We don't think replacing the whole box every 24 months is the right approach for a carrier. How is that wrong?
Belzebutt 12/5/2012 | 2:30:55 AM
re: Li Quits Procket They have now engaged a partner in nortel where
nobody except the CFO liked the deal and the
sales force is unmotivated to even try to sell
something they know nobody wants. And its not
because of cost. Its because the quality of the
product is poor, Avici support is horrible and
the company as a whole specializes in making
promises they can't keep.

You're obviously not an NT insider. :)
coreghost 12/5/2012 | 2:30:57 AM
re: Li Quits Procket
Avici has no advantage at all. Its an old, tired
product with no particular postives. Avici
has made the rounds of every carrier in the
business at least three times now with the
same product. And they keep getting told
"no" for bunches of reasons.

Their only real customer remains ATT. That
is, not counting fake customer announcements or
wishful thinking on their part.

They have now engaged a partner in nortel where
nobody except the CFO liked the deal and the
sales force is unmotivated to even try to sell
something they know nobody wants. And its not
because of cost. Its because the quality of the
product is poor, Avici support is horrible and
the company as a whole specializes in making
promises they can't keep.

Mezo 12/5/2012 | 2:31:11 AM
re: Li Quits Procket The biggest problem with Avici is not their box...although most service providers have looked at it already and passed on it...

The biggest problem Avici has is that it has been bleeding talent for years and there is no one left to enhance the box...I know because many of my friends were there an have moved on...

It does appear that Avici does have one last spin doctor on staff...well done byteme3

p.s. docs=bullshit like any routers 99.999% availability :]
muxbux 12/5/2012 | 2:31:26 AM
re: Li Quits Procket Avici Certainly has some superior advantages over the Cisco Juniper solutions. The issue is the ability to sell High cost cap ex gear in a slowly returning marketspace. the other guys have more product depth to carry them through these times. Avici has one of the best architectures in the business... IMHO
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