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Cabletron moving forward

Cabletron president and CEO Don Reed discusses the future of the company's efforts in networking in the aftermath of the 3Com/U.S. Robotics merger.

ATLANTA--Cabletron Systems is facing challenges on many fronts in the networking industry. What was once a collection of four principle contenders for the networking infrastructure throne has been segmented into two camps in the aftermath of the merger of 3Com and U.S. Robotics.

There is now what one could call a top tier consisting of the merged 3Com--now more than a $5 billion firm--and perennial heavyweight Cisco Systems. A second tier consists of Cabletron, a revived Bay Networks, and, in some respects, Ascend Communications, due to its merger with wide-area switching power Cascade Communications. Furthermore, all these networking players have set their sights on the booming service provider markets to drive revenue through sales of gear that supports Net, data, voice, and video services. Strength in Europe is also now seen as a prerequisite for growth, due to the relative technological maturity in many domestic corporate networks.

CNET's NEWS.COM sat down with recently hired Cabletron president and CEO Don Reed here at Networld+Interop to discuss the Rochester, New Hampshire-based firm's role in the fast-moving industry and where his expertise in voice networks, via a long stint at New England Telephone and Nynex (now part of Bell Atlantic), fits into the company's strategy.

NEWS.COM: Cabletron recently had a down quarter. What are your plans for the company as it transitions into new markets?
REED: From a communications standpoint, there's no dispute internally--we need to be more forthcoming in our communications internally and externally. One of my key priorities right now is to unleash a message. Everyone is telling me we have great technology, we have great products, we solve a lot of problems for business, but we don't tell anybody about it. We're not good at telling our story. Specifically as it relates to the so-called infamous quarter where Cabletron lost a significant amount of its value literally overnight.

Whether it's real or perceived, there were some issues relative to product rollout, delivery, timing of all of that, manufacturing, distribution--and it caused some concern. Those issues are pretty much behind us now. Those aren't the front-burner issues now. We had a pretty good quarter this last quarter. We look to continue a positive trend going forward. The core strategy is to move into the service provider space, which really gets us to the strength of Cabletron, which is how we deal with integrating technologies.

When I say the service providers, I'm really talking about the telecommunications providers, the cellular business, and the cable television media business, and the computing business, as they all begin to converge. We're seeing examples, one after another, of appropriate applications at Cabletron and elsewhere of voice, data, and video. I think the time is right for that now.

NEWS.COM: Convergence seems to be the theme of this trade show. Coming from a telecommunications background, how do you see the combination of voice, video, and data over one network playing out?
We all believe at Cabletron that that's the space where we can move and provide some direction and leadership, particularly out of our convergence heritage we've had from day one. We've been able to converge and manage other people's technologies through our network management product. We need to refocus the business strategy so that we're able to move into this space with all the infrastructure to go along with it.

NEWS.COM: Cabletron has invested in start-ups such as Ipsilon Networks and Yago Systems, as well as entered partnerships with established players like Fore Systems. How will these relationships play out going forward?
There's a lot of rumors out there regarding what's going to happen to Ipsilon, what's going to happen to Yago, what's going to happen to some of these other companies we have made investments in. What we're doing right now is evaluating all of our technology product lines to find out where we can either develop it inside or get the technologies from these companies, and where do we need to make acquisitions vs. partnerships. It doesn't mean we won't continue to make investments in start-ups, small companies where we need to get the technology, or do some OEM [original equipment manufacturer] relationships like we have with Fore. Either we're going to have a strong, deep relationship with Fore or we aren't going to have any relationship. I met with the senior people at Fore last week and we agreed to move forward and strengthen that relationship all the way up to and including some consideration of some joint development. I'm excited about that.

NEWS.COM: As Cabletron evolves, who do you see as competitors as you take on new markets?
Obviously in the enterprise space, its Cisco, 3Com, and Bay. But as we move into the service provider space we will take leadership in that space, whether we're number one or number two. But we're not going to be anything less than number two. We'll do what we have to do. The competition, I would expect, will be at least those three players I mentioned on the enterprise side as well as some new players, whether it be a Hewlett-Packard or Compaq Computer or whoever.

NEWS.COM: Current Cabletron chairman Craig Benson said it took some coaxing to get you to take the post in August. What made you decide to join the company?
It was an appropriate time for me to at least consider. I had known of Cabletron for several years through my personal relationship with Craig. I had some impressions. Certainly, when you come into an organization and start to turn some rocks over you find some things as you go forward. But I haven't been disappointed in any of those issues since I've been there. Clearly, the reason I was brought in was because they had sort of run their string out taking Cabletron from nothing to a $1.5 billion company. I was coming the other way, having run organizations much larger than this. From that perspective, I see a lot of things that need to be done that they may not have been able to have seen. We have a lot of plans underway that will create some real change within Cabletron over the next several months and years.