Procket CEO Resigns
The news comes at a time when Procket is struggling to win business, especially with U.S. incumbent carriers. The company has announced a few deals in Japan, and it also supposedly has gotten some business from the federal government (see Procket Gets Unstealthy and Procket Makes a Splash in Japan). But it has not been able to crack any of the regional Bell operators. In an effort to get its foot in the door at these accounts, the company has been scrambling to find a partner.
Procket's said to have been talking to Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Lucent Technologies Inc. (NYSE: LU), Siemens AG (NYSE: SI; Frankfurt: SIE), and, most recently, Nortel Networks Corp. (NYSE/Toronto: NT) (see Procket Talk Turns Up and Will Nortel Pick Procket? ). But so far, nothing's come to pass.
Kruep joined Procket back in February 2001, after leaving his post as vice president of worldwide sales at Redback Networks Inc. (Nasdaq: RBAK) (see Kruep Leaves Redback for Procket). In the two and a half years he has been at Procket, he helped the company close its third round of funding, bringing the total amount raised to $272 million (see Li Named to Procket's Board).
Paul Matteucci, a partner with one of Procket’s investors, U.S. Venture Partners, will be acting as interim CEO, according to the company. Although Matteucci has not been on the board at Procket, he often takes on interim CEO roles, according to the U.S. Venture Partners’ Website. Prior to joining U.S. Venture Partners in 2001, he served as CEO of Hear Me for over five years and took the company public in April of 1998.
As word has leaked out about Kruep’s departure, there has been much speculation as to why he left. Some speculate that political tension between Kruep and Tony Li, one of the company’s founders and its chief scientist, came to a head. Li, who had worked at Juniper Networks Inc. (Nasdaq: JNPR) during its early days and also at Cisco Systems Inc. (Nasdaq: CSCO), has been viewed as an IP routing guru. Word in Silicon Valley is that Li has been unhappy with the direction of the company.
Li has been characterized by some who have worked with him in the past as "difficult." In a previous Light Reading story, it was noted that Li quit his jobs at both Cisco and Juniper -– leaving multiple millions in unvested stock options on the table at each (see New Kid on the Cisco/Juniper Block).
“It’s déjà vu,” says one source, who didn’t want to be named. “It’s the same thing that happened in the early days of Juniper. You’ve got the technology guy butting heads with the sales guy. It’s a classic situation when a company gets to this level.”
Procket would not comment on any alleged tension between the two executives. But Li made this statement:
“I’d like to thank Randall for the contributions and leadership at Procket. I am confident that the company is well positioned for ongoing success.”
Other folks in the industry say that Kruep had made promises to the board during the last funding round that he couldn’t keep. Procket officials deny that the board was unhappy with Kruep’s performance. In fact, a spokesman for the company gave Light Reading this statement from Geoff Yang, a board member of Procket and partner at Redpoint Ventures:
“We have reluctantly accepted Randall’s resignation, and want to thank him for his outstanding dedication and leadership at Procket Networks. Under Randall’s leadership, Procket has developed and delivered breakthrough innovations in IP routing systems, and with its strong customer traction, is ideally positioned for continued success.”
Regardless of the circumstances of Kruep's departure, the abrupt change raises more questions than it answers. The next few months will be crucial for Procket, as it seeks to build on existing customer deals and find a larger OEM partner.
— Marguerite Reardon, Senior Editor, Light Reading