DeNuccio Replaced at Redback
In announcing its fourth quarter and full year results today, Ericsson reported that Redback’s full year sales had grown only “slightly” in 2007: Revenues in 2006 were about $260 million. (See Ericsson Cuts Jobs as H2 Bites and Redback Bows Out With Shortfall .)
Those static sales were despite what Ericsson describes as “significant” international growth. (See Bezeq Deploys Redback, BSNL Picks Redback, PCCW Picks Redback, Redback Wins in China, Redback Wins in Germany, Redback, Ericsson Tout Deals, Redback Touts SmartEdge Wins, and Belgacom Picks Redback.)
That, though, was offset by “a decline in business from one major customer” that “impacted domestic [U.S.] sales.” BellSouth, now part of AT&T Inc. (NYSE: T), has been a major customer historically.
Despite that blow and the replacement of the long-term chief executive, Ericsson’s CEO Carl-Henric Svanberg told journalists during a webcast conference call early this morning that “nothing has gone wrong” at Redback. He said 2007 had been a transitional year for the edge IP routing business as it shifted from its legacy lines to its latest SmartEdge platform, and added that 90 percent of 2007 sales were related to the SmartEdge line. (See Redback Beefs Up Its Router.)
DeNuccio has not (yet) left Redback: He will be the full-time non-executive vice chairman, working alongside recently appointed chairman Bert Nordberg, a long-standing Ericsson heavy hitter who was, until recently, the Swedish firm’s head of sales and marketing. Nordberg, who begins his new role today, is charged with accelerating “Ericsson's activities in next generation IP networks” by boosting the performance of Ericsson’s Silicon Valley businesses, Redback and Entrisphere. (See Nordberg to Lead Companies.)
Nordberg is now based in San Jose, Calif., making him the first member of Ericsson’s senior management team to be based outside Sweden.
So Redback's new chairman faces a tough task. Redback is going head-to-head with Cisco Systems Inc. (Nasdaq: CSCO), Juniper Networks Inc. (NYSE: JNPR), and the shining light of Alcatel-Lucent (NYSE: ALU)’s portfolio, the IP division headed up by Basil Alwan. Redback, though, isn’t beyond beating such competition on their home turf. (See Redback Beats AlcaLu to French Deal.)
— Ray Le Maistre, International News Editor, Light Reading