With its stock in the dumps and the potential for a sustained turnaround still looming as a large question, networking hardware player Cabletron Systems will use the fruits of its recent acquisition binge to get back into its core strength: corporate networks.
Two new hardware devices--one targeted at low-end local network connection points and the other at the potentially lucrative high-end, sophisticated switch market--will be rolled out following Labor Day, according to sources close to the company, likely framing an intense pricing and function comparison war between the major networking players and remaining start-ups that should set the tone for the fall.
The rollout comes at an important time for Cabletron. Despite posting a profit, the company's stock is trading near a 52-week low and is wallowing in the single digits. The company went through a tumultuous period this spring, which resulted in several executive departures and the subsequent resurgence of Craig Benson, a cofounder, as the hands-on leader of the firm.
Subsequently, former chief Don Reed--a telecommunications-focused outsider with a short-lived reign at Cabletron--left the firm entirely, even as company insiders insisted he would remain an important strategy contributor. Reed has since taken a position with Cable and Wireless Communications.
With the revolving door gathering dust--at least temporarily, new Yago-based switching products that incorporate a limited set of routing functions and include intelligence to recognize traffic from particular applications could provide the boost Cabletron needs, according to some.
"They're pushing real hard," noted John Armstrong, analyst with market researcher Dataquest. "One of the criticisms that was leveled against Cabletron a year ago was they were slow in getting into the switching market and adding routing capacity.
"That was a major gap they were able to fill with the purchase of Yago," he said.
"The biggest challenge that Cabletron has now is the way the market has changed," Armstrong observed. "It's become less and less about technology and more about focused marketing."
The additions, briefly disclosed in May, will hit the market at low price points. A new SmartSwitch Router 2000 with a base of 16 10/100-mbps ports and two gigabit-speed Ethernet links will roll out at $4,995, according to sources, a figure far below competitors', such as the Accelar line from Bay Networks.
A new high-end SmartSwitch Router 8600, intended to compete with the likes of the Catalyst 8500 from Cisco Systems, will debut at $495 per 10/100-mbps port and $2,995 per gigabit-speed port, according to sources, with a chassis that can take up to 120 10/100-mpbs Ethernet ports and 30 gigabit links. The 8600 can speed packets at rates of up to 30 million packets-per-second.
In related news, the company has centralized a West Coast engineering force in Sunnyvale, California, consisting of several hundred employees from a variety of acquisitions. The move represents a departure for Cabletron, a New Hampshire-based company that has historically not had a large presence in Silicon Valley.