Cisco loses key technology executive

Judy Estrin, a veteran of Silicon Valley, plans to relinquish her duties as Cisco's chief technology officer at the end of this month to form a new firm to be launched in May. Mike Volpi, Cisco's current executive vice president of business development, has been promoted to chief strategy officer and will assume many of Estrin's responsibilities.

"My history prior to Cisco was building things," Estrin said in an interview. "Some habits are hard to break."

Estrin's departure highlights what could be an emerging issue for high-flying Cisco as it continues to grow: How does the company hold on to key personnel amid a boom in venture capital funding of start-up networking companies? Even Cisco's turbo-charged stock may not be enough for some executives who want to work for a smaller outfit where they can have more control.

Cisco may also face the same problems as Microsoft--retaining executives who reap such stock windfalls that they no longer need to work. That does not appear to be Estrin's motivation, given her previous successes in the industry and entrepreneurial background.

Mario Mazzola, who headed Cisco's business unit for big businesses, recently announced plans to retire in June.

Estrin, 45, and husband Bill Carrico have a long history in Silicon Valley. Estrin and Carrico joined Cisco two years ago when Cisco acquired Precept Software. Cisco's chief executive, John Chambers, has often joked in public appearances that he thought so much of Estrin that Cisco bought Precept.

Estrin's Silicon Valley history dates back to 1981, when she co-founded networking company Bridge Communications with her husband. That venture went public in 1985, then was acquired by 3Com. Estrin in 1988 co-founded "thin client" device maker Network Computing Devices with her husband, before leaving in 1994.

The duo started Precept in 1995.

Estrin said her latest venture would "not be competitive to Cisco," but would focus on how to "scale the Internet." Estrin will serve as chief executive of the as yet unnamed firm. Carrico, who left Cisco last year, will be chairman.

"I don't think it made sense within the confines of Cisco," Estrin said of her new venture.