Procket Bulks Up
Stealthy startup Procket Networks Inc. is beefing up its management team with big names from public companies.
Although Procket won’t comment officially, Light Reading has confirmed from sources inside the company that Vito Palermo, former chief financial officer at Extreme Networks Inc. (Nasdaq: EXTR), is now CFO for Procket (see Finance Chief Exits Extreme). And Mark Showalter, a founding employee and former executive at CoSine Communications Inc. (Nasdaq: COSN), is now Procket's vice president of marketing.
The company has done well to recruit big names from public companies -- though the shellshocked stock market has certainly helped its cause. The new recruits also add to the buzz that Procket is now one of Silicon Valley's hottest networking startups. Executives with public-market experience could help build the case for a potential IPO.
In February, Procket snagged the head of sales at Redback Networks Inc. (Nasdaq: RBAK), Randall Kruep, for the chief executive officer seat (see Kruep Leaves Redback for Procket).
“They are definitely building an all-star team,” says Stephen Kamman, an analyst with CIBC World Markets. “From day one they were pulling together top technology expertise, and now they’re rounding out the management side of the company.”
From Procket’s earliest days, it was busy assembling a heavy-hitting team (see New Kid on the Cisco/Juniper Block). The founders, Sharad Mehrotra and William Lynch, both worked for Sun Microsystems Inc. (Nasdaq: SUNW), where they were integral in creating high-speed semiconductor technology. Then the company brought in IP routing guru, Tony Li, who helped design the GSR 12000 at Cisco Systems Inc. (Nasdaq: CSCO) and the M40 router at Juniper Networks Inc. (Nasdaq: JNPR). Li is serving as Procket's chief scientist and director of software engineering.
Since its inception in 1999, the company has remained tight-lipped about what it’s working on. Judging from the technical expertise, the general consensus is that it’s developing a next-generation IP core router. Despite two years of work, Procket isn’t expected to ship a product until at least July or August of 2002, says one source.
Of course, the current slumping market conditions have likely helped its recruiting efforts. For example, Extreme has seen its stock drop more than 80 percent since last year. Despite reporting decent quarterly earnings last week, the company still has a long way to go toward recovery (see Extreme Looks East).
Redback and CoSine have also seen stock prices tumble. CoSine is now trading at about $1.20 a share, down from its high of about $55 when it first went public in September of last year. Redback is trading around $5, down from its high of about $150 a share.
“I’m sure if they thought they were going to make more money at those other companies, they would have stayed,” says another analyst who didn’t want his name used. "I’m sure getting in early on something like this could have a big upside.”
- Marguerite Reardon, Senior Editor, Light Reading