Redback Networks CEO resigns

Administrative upheaval at Redback Networks continued yesterday, as the company announced the resignation of CEO Vivek Ragavan, who had been the company’s top officer for less than a year. Redback Chairman Pierre Lamond will act as interim CEO during the two-month search for a new chief executive.

“Redback is at a critical juncture in its evolution … and we need the best operational leadership at the top that we can find,” Lamond said. “We have commenced the search for a CEO with experience in bringing a first-class technology company forward.”

The statements were remarkably similar to those Ragavan gave to Telephony when explaining Redback’s flurry of high-level personnel changes during the last year. Since last July, Ragavan was named CEO, Dennis Wolf became chief financial officer, and Richard Bibb took over as senior vice president of worldwide sales.

“Some of the members of our management team were more interested in getting a company to a certain point, and then they have moved on to do other things in their life, which is totally understandable--this is not abnormal in the growth of companies,” Ragavan said in an interview last month. “We have brought in a new management team that can take the company to the next level.”

Lamond said the Redback board considered keeping Ragavan in the company through the transition period but decided that having a “lame duck” CEO in the organization was not in the best interests of shareholders.

A company press release indicated Ragavan resigned “to pursue other opportunities,” but no one indicated that the former CEO had any imminent job offers.

“The departure has been done in very amicable terms,” Lamond said. “Vivek, although disappointed certainly, will remain a friend of the company.”

Ragavan was CEO of Siara when Redback bought the optical start-up in November 1999 for stock that was worth more than $4 billion at the time of the deal. Although the Siara-based SmartEdge optical solution has been available for only a year, Ragavan had said he believes its sales will represent a majority of Redback’s business next year, eclipsing the company’s revenue from its trademark subscriber management system.

Lamond said Redback will remain focused during the CEO search, noting plans to “shelve” some projects to dedicate more resources to the company’s core performance. He also said Redback is not changing any of its financial or product guidance, although several analysts noted that the timetable for the company’s SmartEdge IP cards appears to have slowed by about three months. Redback expects the product to begin generating revenue in the fourth quarter.

News of Ragavan’s resignation generated a wave of speculation among investors that Redback--the subject of buyout rumors three months ago with Juniper and Cisco--again would be an acquisition target. While he stopped short of ruling out the possibility of a sale, Lamond said no such plans are on the horizon. “The company’s not for sale,” he said. “There’s nothing of that sort going on at this time.”