tele.com article on ex-Cascade folks
[Some attractive IPOs if they don't get bought...]
teledotcom.com
Attractive Alumni
Cascade's former employees are in
high demand
By Jeremiah Caron. Jeremiah Caron is executive
industry editor for tele.com. He can be reached over the
Internet at jcaron@cmp.com.
Opportunism, drive and dedication. These are all traits shared
by entrepreneurs running the new batch of network equipment
companies flooding the communications services market. But, it
turns out, many also share a connection that reaches beyond
these fundamental characteristics. At least eight of the latest
helmsmen at new multiservice switch and router companies are
graduates of Cascade Communications Corp., the frame relay
and asynchronous transfer mode (ATM) gear builder that was
acquired by Ascend Communications Inc. (Alameda, Calif.) in
1997.
Indeed, the "Cascade Connection" is so thoroughly entrenched
in the industry it is spawning jokes among insiders. "I was
talking to the CEO of a startup the other day who said, 'We're
going to hire a Cascade janitor to double our valuation,'" says
analyst Joe Skuropa, director of switching and routing for
consultancy Ryan Hankin Kent Inc. (San Francisco).
Why are Cascade alumni having such a disproportionate impact
on the next-generation infrastructure market? It boils down to
technological expertise and trustworthiness, say service
providers and venture capitalists (VCs) alike. Cascade and its
managers had a reputation for delivering on promises, on time.
Also, the company combined the flexibility of software-based
switching and routing schemes with carrier-class sturdiness--all
important characteristics in today's service provider market.
The result, for service providers both old and new, is a bountiful
crop of important technology that helps integrate circuit- and
packet- or cell-switched networks. All of the startups run by the
ex-Cascade executives address the issue of convergence with
products that propose to lower capital costs and shorten the
time to market for services.
"We're looking for people who have proven they can succeed,"
says VC Todd Dagres, general partner at Battery Ventures
(Wellesley, Mass.), explaining the funding enthusiasm for
anything touched by ex-Cascaders. "We know how successful
Cascade was."
Wayne Price, director of architecture for Williams
Communications Group Inc. (Tulsa, Okla.), agrees. "We had a
great track record with Cascade. Everything they said, they
did."
That is why Price inked a deal last month worth $25 million to
purchase optical networking gear from startup Sycamore
Networks Inc. (Chelmsford, Mass.). The company was
founded last year by Sycamore's chairman, Gururaj Deshpande,
and its chief executive, Dan Smith, both of whom held their
same respective positions with Cascade before the Ascend
acquisition.
Smith is also on the board of directors of Unisphere Solutions
Inc. (Burlington, Mass.), the new U.S. company formed last
month by Siemens AG (Munich, Germany). Siemens is
launching Unisphere by folding in its previously acquired
multiservice edge- and access-switching startups, including
Argon Networks Inc. (Littleton, Mass.), Castle Networks Inc.
(Westford, Mass.) and Redstone Communications Inc.
(Westford, Mass.).
Castle chief executive Tom Burkhardt ran Cascade's digital
subscriber line (DSL) business, and Redstone chief executive
James Dolce was Cascade's remote access head. Dolce is
joined at Redstone by vice president of technology Kurt Melden,
who cofounded Cascade and directed its hardware
development.
Another highly regarded multiservice switch startup, Shasta
Networks Inc. (Sunnyvale, Calif.), was founded by Cisco
Systems Inc. (San Jose, Calif.) expatriates but has since
brought on Cascade cofounder and chief technology officer Wu
Fu Chen as chairman and chief executive officer (CEO).
Meanwhile, Michael Champra, Cascade's director of worldwide
sales, heads up optical access switch maker Omnia
Communications Inc. (Marlborough, Mass.), which last month
was acquired by Ciena Corp. (Linthicum, Md.) for $400 million.
Finally, Hassan Ahmed, who served as Cascade's vice
president of engineering and then briefly as executive vice
president of Ascend's core switching division after Smith left
that post to start Sycamore, is now heading up Sonus Networks
Inc. (Westford, Mass.), developing Internet protocol (IP)
gateway and switching systems. All of this is on the current
record, but in the wings wait new companies that will be
stocked with four former Cascade managers, such as
unannounced startup Convergent Networks Inc., which will
focus on ATM infrastructure.
This flurry of Cascade-driven startup activity begs the question:
Has Ascend been able to retain a critical mass of its acquired
talent pool?
Bob Machlin, vice president of marketing at Ascend and one of
the few original Cascade executives who remain with the
company, points out that hundreds of Cascade employees
remain at Ascend.
While that may be true, there's no denying that service
providers have ultimately benefited by the churn created by
acquisitions and subsequent executive departures, say industry
observers. The process creates a rich talent pool for startups,
feeding the rapid cycle of innovation demanded by service
providers. "I'm convinced that without the Cascade-Ascend
deal, we wouldn't have all these startups," says Paul Ferry,
general partner at Matrix Partners (Waltham, Mass.).
Copyright © 1999 tele.com
All Rights Reserved.
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