New Kid on the Cisco/Juniper Block
Is the networking industry’s IP router duopoly set to become a terabit
It will, if Tony Li gets his way. He’s the notorious IP routing maven who cut his teeth at Cisco Systems Inc. (Nasdaq: CSCO) designing the GSR 12000, then jumped ship to Juniper Networks Inc. (Nasdaq: JNPR), where he helped develop the industry-changing M40 Internet Backbone router.
Now, he’s at it again. Li recently moved from Juniper to the unfortunately named Procket Networks Inc., a startup based in San Jose, Calif. (see Procket Processes a Dream Team). While Procket flatly declines to reveal what it’s working on, Light Reading’s sources in Silicon Valley are considerably more forthcoming. And the facts behind Procket add up to one of the more interesting stories in optical networking this year.
First, the basics: Procket is working on a very high-performance IP routing platform. “It’s a very high-density OC192/768 box, with interfaces aggregated around a switch fabric, and it competes with the next-generation routers from Cisco and Juniper,” says one of Light Reading’s anonymous sources.
Talk about a change in plan. Procket was originally founded by two microprocessor experts and former employees of Sun Microsystems Inc. (Nasdaq: SUNW), Sharad Mehrotra and Bill Lynch, with the intention of developing OC192 and OC768 components -- not a system.
That all changed when U.S. Venture Partners, the lead VC investor in Procket, brought in Tony Li -– router developer extraordinaire. (The transfer was instigated by Stuart “Stu” Phillips, a general partner at USVP, and Li’s former boss at Cisco).
And where Li goes, talent seems to follow. He has reportedly already recruited two key engineers away from Cisco to help build the mondo routing platform: Dino Farinacci, a respected IP software engineer, and Bruce Wilford, a hardware-switching expert. (Cisco would not confirm that they had left, but both are now listed in Procket’s automated company phone directory). Li also is in the process of luring away at least one Juniper exec, Light Reading’s sources say.
In addition to losing staff to the startup, Cisco has another excellent reason to be miffed with its former employee. Along with USVP, Cisco was actually a lead investor in Procket. Light Reading sources say that it funded the company with an eye to using its OC192 (10 Gbit/s) and OC768 (40 Gbit/s) components in its high-performance routing platforms.
But now that Procket has pulled a strategy switcheroo, Cisco has not only acquired a potentially powerful new competitor (one that it funded, no less), it’s also lost a potential source of the high-speed interfaces that it so desperately needs to fill out its routing product line. Cisco has yet to ship an OC192 card; a spokesperson says it will plug the gap through in-house development and acquisitions. Last year, the vendor spent $435 million to buy StratumOne Communications, which was developing an OC192 packet-over-Sonet (POS) interface.
Cisco is not the only unhappy camper. Juniper also is said to have taken umbrage –- and not just with Li, its former employee, but also with the three VC firms that are funding Procket. That’s hardly surprising; they happen to be three of the same VCs that funded Juniper: USVP, New Enterprise Associates, and Redpoint Ventures. Juniper executives are said to have complained to the VCs that they are now funding a direct competitor.
Juniper declined to publicly comment on the VC’s actions.
The presence of Tony Li on staff adds significant bite to Procket's attempt to take on the big dogs of the routing industry. Li’s track record of building teams that create stable router software –- especially that all-important and gnarly BGP (border gateway protocol) code -– gives Procket a huge advantage over other core router wannabes, such as Lucent Technologies Inc. (NYSE: LU) (via its Nexabit acquisition), Charlotte’s Web Networks, and Pluris Inc.
“If you step back and look at the world today, there are only two companies that have a really stable BGP-4 product. And that’s Juniper and Cisco. And Tony Li is the common thread in both of them,” says Dave Schaeffer, CEO of Cogent Communications Inc., a service provider. Schaeffer declined to comment on other aspects of this story.
Then again, some observers suggest that Li’s personality could also be a liability.
“Li is brilliant. He’s probably the most gifted BGP implementation engineer in the world. But I understand that he has both an ego and a temper. The volatility of his personality may prove to be a problem for Procket,” says an executive at a service provider, who requested anonymity. “You can have the most brilliant person in the world, but if they can’t work with a team, the team won’t work.”
Li reportedly quit his jobs at both Cisco and Juniper -– leaving multiple millions in unvested stock options on the table at each. Industry legend has it that he nailed his Cisco resignation to his manager’s door. Li declined to comment.
In an interesting twist, that manager was none other than Stu Phillips, who went on to become a VC at USVP and lead the investment in Procket. “I guess those guys kissed and made up,” says a VC at another firm, speaking off the record.
-- Stephen Saunders, US Editor, Light Reading http://www.lightreading.com