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Packet Design spin-offs take unusual steps

Posted: 21 Feb 2003 ?? ?Print Version ?Bookmark and Share

Keywords:packet design? precision i/o? router? control-plane software? vernier networks?

Packet Design LLC, the networking incubator founded by former Cisco Systems Inc. CTO Judy Estrin, has taken unusual steps with two spin-offs announced this week. Packet Design Inc. will take the name of the parent and be responsible for all commercial products related to router control-plane software. And a second spin-off, Precision I/O, will work on a high-speed networking architecture to optimize server performance.

Estrin said Precision I/O could offer a combination of pure software products, or possibly chip- and board-level products. In any event, Precision I/O's architecture will make no changes to networks at the physical, datalink, or network layer, but will enhance the performance of existing server links.

With the two spin-offs completed, Packet Design LLC will become a management organization that employs only five workers. The two spin-offs announced this week, along with the earlier 802.11 spin-off, Vernier Networks Inc., represent the likely total of spin-offs the incubator will create, Estrin said.

"We had to think very hard about giving Packet Design Inc. the name of the original company," she said. "I could be flippant and say it's just too hard to come up with two good new company names at once, but the real issue is that Packet Design Inc. is carrying on the routing and control-plane expertise that our entire development organization was known for. It became a market and branding issue, of sorts, to continue the Packet Design name with the routing product group."

Estrin will serve as chairman of both spin-offs, and will be the temporary CEO of Precision I/O until a permanent executive is found. Douglas Brendt is CEO of Packet Design Inc. Estrin said the latter company will roll out products that enhance the robustness, security, and scalability of Internet Protocol networks, but they will not be aimed solely at router and switch OEMs. Nor will it follow the business model of IP middleware companies like NetPlane Systems Inc. and Radlan Inc., both of which have been acquired in recent weeks.

"One of the business model limitations we had originally, which is a problem shared by most of the middleware vendors, is that the entire addressable number of companies you can license your technology to is not the same as it was a couple years ago," Estrin said. "We need to be able to offer products for equipment vendors, for service providers, and for enterprise applications."

Estrin had little to say about the business model of Precision I/O, because the company still is considering a variety of models for serving high-speed server interconnect markets. Unlike Packet Design Inc., which already is raising a new round of venture funding, Precision I/O will use a limited amount of seed funding from Packet Design LLC, and will wait until later this year to raise its first outside round of venture capital.

There are approximately 60 employees at Vernier, and Packet Design LLC retains a majority stake in that company. Of the 41 employees at Packet Design LLC today, 25 will go to Packet Design Inc., 11 will go to Precision I/O, and five will manage the continuing business of the holding company.

- Loring Wirbel

EE Times

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