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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truelight 12/5/2012 | 2:35:24 AM
re: Li Quits Procket EOM
truelight 12/5/2012 | 2:35:24 AM
re: Li Quits Procket fw23

This is typical in a high tech startup going tho some rought times. The guy who wanted and or contributed to the most usually gets ousted by the suck up and VC and new management for fear of what he can do - Machiavelli.
Cybernetic_Ghost_Of_Chirstmas_ 12/5/2012 | 2:35:23 AM
re: Li Quits Procket
Thousands of years ago at the dawn of time there was a tarpit
known by the name Procket. The tarpit had a flaw in that it
was actually two types of tar that flowed together.
The "Proc" tar came from the sun and was full of bad ideas for
overly complex and expensive boards of hard wares. The "ket"
side came from the land of arrogance where the
Juniper trees grew.

The King of the tarpit came from the land of arrogance.
He thought that the juniper trees produced fruit that taisted
bad so he left to seek is fortune.

The king of the tarpit appointed a prince to oversee
the day-to-day operations of the pit. He was the smoking man.

The tarpit was a happy place during the dance of dollars,
but when the hard wares of the sun-apes failed to do what they promised,
the sun-apes were sent away. They had failed the

A hundred years later, the dance of dollars ended nd a blood sacrifice
was needed to summon the dollars again. So the king killed the
smoking man and all his followers. But there
was a warning.
The smoking prince cursed the king that should he ever attempt to spill
blood again, he would lose his kingdom.

The king had already executed everyone else of importance in the kingdom.
There was nobody left to blame but the king

And so the king of the tarpit fell. He fell deep into the dark places
of the earth to plot his revenge.

I have seen this all in future.

So says:

The Cybernetic Ghost of Christmas Past from the Future
Cybernetic_Ghost_Of_Chirstmas_ 12/5/2012 | 2:35:22 AM
re: Li Quits Procket
Thousands of years ago, Australia was run by apes who threw bones at
each other. One day, a magic man from the
tarpits of procket came to Australia and told
the apes that he would provide them with free
metal boxes to throw at each other and waste
upon. The apes agreed.

And so, the apes of australia took to throwing
metal boxes at each other and things were good.

But many were left to wonder how the tarpit could
do the dance of dollars if it gave away away
its metal boxes for free.

So says

The Ghost of Christmas Past From the Future
holden_caufield 12/5/2012 | 2:35:22 AM
re: Li Quits Procket Heard Tony might be leaving to join the illustrious Infinera team...

just a rumor -- but imagine...
Cybernetic_Ghost_Of_Chirstmas_ 12/5/2012 | 2:35:21 AM
re: Li Quits Procket No.

I do not see this in his future which is the
past to me. The King of the tarpit will have
total control over any new venture he chooses
to associate his name with.

So Says:

The Cybernetic Ghost of Christmas Past From the Future.
particle_man 12/5/2012 | 2:35:20 AM
re: Li Quits Procket Did he nail his resignation notice to the door?
DocGonzo 12/5/2012 | 2:35:20 AM
re: Li Quits Procket fw23:

Relax, it is not the end of the world. Maybe Tony decided to back away from it. In any case, go home early, take a few midol and crawl into bed with some heating pads. Tomorrow will bring another day of hope.

Cybernetic_Ghost_Of_Chirstmas_ 12/5/2012 | 2:35:17 AM
re: Li Quits Procket He did not nail it to the door. But he did write it in elf blood. And there were many robots at the quickening.

So says:

The Cybernetic Ghost of Christmas Past from the Future
willrouteforfood 12/5/2012 | 2:35:16 AM
re: Li Quits Procket fw,
is it 100 feet, or 100 meters on the restraining order?

(Nobody make any sudden moves) ;)

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