NuSpeed Duo Departs Cisco

The two founders of NuSpeed Internet Systems, which Cisco Systems Inc. (Nasdaq: CSCO) bought two and a half years ago for $450 million, are leaving Cisco at the end of the month, Byte and Switch has learned.

On Monday, Mark Cree, general manager of what is now Cisco's storage router business unit, sent an email to the group announcing that he and Clint Jurgens, its business development manager, have given Cisco their two weeks' notice and will resign their positions effective Jan. 31. Byte and Switch obtained a copy of the email (see below for the full text).

Neither Cree nor Jurgens responded to email or phone messages. A Cisco spokesman says the company's policy is to "never comment on personnel issues."

Cree and Jurgens founded NuSpeed in December 1999. The company, based in the Minneapolis suburb of Maple Grove, was developing a router for sending Fibre Channel storage traffic over IP networks. Just seven months later, in July 2000, Cisco announced its intent to acquire the company for $450 million in stock -- and it's not clear whether NuSpeed even had an actual shipping product at the time (see Cisco to Acquire NuSpeed Internet).

While Cree didn't provide an explicit reason for their departure in his email message, he wrote: "It has been disappointing that the sales and marketing forces of Cisco have not matched our market development success with equal success in generating revenue." Cree did not indicate what, if anything, he and Jurgens may be doing next.Cisco, by many accounts, has not sold a significant number of the NuSpeed-based SN 5400 routers. (According to one industry source, Cisco has sold between 300 and 400 units each month; Cisco does not disclose sales figures for individual product lines.) What's especially hurt its prospects is that iSCSI, the IP protocol used to send block-level storage over Ethernet, has taken much longer to mature than was expected. Cisco has been one of the leaders of iSCSI's development since its inception (see Cisco Stalls on iSCSI).

Industry observers speculate that Cree and Jurgens are leaving now because the terms that required them to stay at Cisco for a certain period of time after the NuSpeed acquisition (a.k.a. "golden handcuffs") are expiring. Cisco completed its acquisition of NuSpeed in September 2000.

More to the point, the NuSpeed crew may have felt abandoned by Cisco to some extent. Around the same time Cisco bought NuSpeed, it was initiating a new project: Andiamo Systems Inc., whose charter was to develop a killer Fibre Channel switch (see Ciscos Secret SAN Strategies Revealed, Cisco Owns Up to Andiamo, Cisco Buys Andiamo, Cisco's Creative Andiamo Options, and IBM Tells Cisco: 'Let's Go!').

"They sort of got orphaned, especially after Luca [Cafiero] took over the storage group," says an industry insider, who did not want to be named.

Another wrinkle in this saga -- although it is most likely unrelated to the NuSpeed founders' departure from Cisco -- is that last year, stakeholders of defunct networking startup NeoNetworks Inc. filed a lawsuit against Cisco, Cree, Jurgens, and others alleging that they stole technology and business relationships developed by NeoNetworks. Prior to starting NuSpeed, Cree was NeoNetworks' VP of marketing and Jurgens was its VP of business development. Rich Ostlund, a partner at Minneapolis law firm Anthony Ostlund & Baer, which is representing the plaintiffs, says the matter is pending and is in the discovery phase (see Cisco Sued Over NuSpeed)."Yes, the iSCSI pioneers left the big machine a tad bummed out," says Steve Duplessie, senior analyst at Enterprise Storage Group Inc. "The good news is they have a ton of money to help them over the ordeal. They are great guys who will show up again."

Here's the full text of Cree's message bidding farewell to the Cisco storage router group.