Packet Design Reshuffled
Is there a method to this spinoff madness? It may have something to do with the fact that focused startups are more marketable and can raise funds more easily than amorphous research and development entities such as Packet Design LLC. Despite Estrin's and Carrico's preference to multitask, their experiences with three successful startup companies (Bridge Communications, NCD, and Precept Software) suggest they're making a judgment call as to how to make their companies more marketable.
"I'm a practical person," says Estrin, who now sits on the boards of seven companies, including The Walt Disney Company, FedEx Corp., and Sun Microsystems Inc. (Nasdaq: SUNW). "You want to build a company for the long-term, but you always need to realize there can be opportunities that, for the sake of your shareholders, you need to take."
All of the companies, despite their spore-like behavior, do have a common theme: managing and optimizing IP networks, especially through routing software.
The first new startup will be called Packet Design Inc. and it will focus on network appliances that tackle routing problems and improve IP networks. Route Explorer, a network troubleshooter, and BST, a new routing protocol, will be among the intellectual property transferred to this spinoff (see Packet Design Intros Routing Protocol and Packet Design's Routing 'Spy' ).
Packet Design CNS, a business unit that had been formed to sell and market Route Explorer, will be absorbed by Packet Design Inc. The new startup will be led by Douglas Brent, who became Packet Design LLC's chief operating officer in September (see Cisco's Wireless Wait). About 41 workers, or 25 percent of Packet Design LLC's employees, will move to Packet Design Inc.
Estrin says Packet Design Inc. is now seeking between $12 million and $15 million in new funding. [Ed. note: Oh, so that's why they're chatting up the press.]
The second spinoff, Precision I/O, is working on a high-speed networking architecture scheme that will be disclosed later this year. Estin says the new products will include components, hardware, and software products that allow servers to take advantage of faster networks, including 10-Gbit/s Ethernet, and higher, connections.
Precision I/O will get 11 of Packet Design LLC's workers, and Estrin will hold the CEO title until a permanent CEO can be found. [Ed. note: Oh, so that's why they're chatting up the press.]
Packet Design LLC, is seed-funding Precision I/O and, once the company finishes hammering out a business plan, it will start hunting for more funding to keep it afloat. [Ed. note: Oh, so... well, you get the picture.]
Estrin, who is chairman of both new spinoffs, says Packet Design LLC still has about $10 million left of its $29 million raised to date (see Sun Shines on Packet Design).
The fourth Packet Design-related company, WLAN management software vendor Vernier Networks Inc., was started in March 2001 and has raised about $33.7 million to date (see Packet Design Starts Spinning Out).
— Phil Harvey, Senior Editor, Light Reading