In The Shadows: The Rise And Fall Of Torrey Point


TORREY POINT'S DEATH SENTENCE

In the summer of 2013 Juniper severed ties with Torrey Point and de-authorized the company as an official Juniper reseller. For Torrey Point, which made approximately 80 percent of its revenue from Juniper, the de-authorization effectively put it out of business. "It was a death sentence for the company," said one former Torrey Point employee, who wished to remain anonymous.

Juniper declined comment on Torrey Point's partner status or the solution provider's relationship with Cisco.

According to sources with direct knowledge of Juniper's deauthorization of Torrey Point, several factors beyond the Cisco sales contributed to Juniper's decision. Those factors include a systemic approach to deceive Juniper, from the alleged creation of fictitious customer accounts to the use of affiliated companies to move the Juniper equipment behind the vendor's back.

Baker's lawsuit and his allegations against Torrey Point, Fazio and Young characterize the PHW revenue generated by the sales to Cisco as "massive fraud" as well as gross violations of Torrey Point's reseller agreement, which put Torrey Point's business in danger. "Fazio and Young jeopardized the continued viability of Torrey Point for a mere short-term gain in breach of their fiduciary duty," the complaint states.

Baker settled the lawsuit with Torrey Point, Fazio and Young for an undisclosed amount last July, not long after Juniper had officially dropped Torrey Point as an authorized partner.

As a result of the de-authorization, Torrey Point was left with few options and was fast-tracked for an acquisition (sources say Juniper facilitated the process to ensure many of its large customer accounts were taken care of). Last fall, Torrey Point's assets were acquired by Juniper partner FishNet Security for an undisclosed sum. At the time, the deal was portrayed publicly as a major win for Torrey Point, with Fazio declaring in a press statement that the company was "excited about joining one of the industry's fastest-growing and most respected solution providers."

And according to former Torrey Point employees with direct knowledge of the situation, FishNet acquired the company's assets for a steep discount because of Juniper's de-authorization. Essentially, FishNet acquired a $70 million VAR and one of Juniper's biggest partners for pennies on the dollar, sources say. 
FishNet declined to comment on Torrey Point.

Stephen Shapiro, a former senior account manager at Torrey Point who joined FishNet following the acquisition, said most Torrey Point employees had no idea Fazio and Young were selling Juniper gear to its rivals, and only later heard rumors about the Juniper product sales to Cisco after Torrey Point was acquired.

"We had a company meeting a couple of months before the FishNet deal. That's when they broke the news about Juniper," Shapiro said. "It was a shock to a lot of people, and they were worried about the future of the company."

According to sources, Fazio and Young told employees they were contesting Juniper's decision to drop Torrey Point as a partner, but the two never explained what caused Juniper to take that action.

Former Torrey Point CTO Doug Marschke was also shocked by the Juniper news. In 2012, Marschke sold his company Proteus Networks — also a strong Juniper partner — to Torrey Point and joined the company as CTO, filling Baker's vacancy. But just over a year after the acquisition, the company was essentially out of business.

"I was surprised," Marschke said. "I didn't know anything was going on behind the scenes [with Cisco], and the company was doing extremely well, so it was a shock."

Juniper wasn't the only vendor to cut ties with Torrey Point. The official press release for the FishNet acquisition said Torrey Point also had "strong partnerships" with other key vendors including Arista. However, according to former Torrey Point employees, Arista de-authorized Torrey Point as a reseller partner—in 2012.

The documents from Baker's lawsuit against Torrey Point also show the company was selling Arista equipment as well as Alcatel-Lucent products to Cisco. The documents were produced for a deposition in the case in early 2012, and Baker's attorneys issued subpoenas to several officials at Cisco, Juniper, Alcatel-Lucent and Arista, exposing the relationship between Torrey Point and Cisco.

"Arista is a stand-up company, and they cut off Torrey Point right away," said a former Torrey Point employee, who wished to remain anonymous. "Why Juniper didn't do the same, I have no idea." Arista declined to comment.

NEXT: Torrey Point's Ties With Juniper