Cabletron targets high-end networking

Classically corporate-oriented Cabletron Systems has laid out plans to deliver for testing by the end of 1999 a high-end routing device that can handle a variety of communications technologies, underscoring the company's reliance on technology from a start-up it bought early last year for about $215 million.

According to Cabletron executives, the device, tailored to the needs of Internet service providers (ISPs) and emerging communications companies, would be the one of the most ambitious development efforts in the company's history.

Numerous networking companies are looking at providing such technology to create a higher-speed Internet, lured by the large outlays of cash service providers are prepared to spend, based on the promise of more customers and a wider range of services made possible via upgraded network layouts. But given the technologies involved, the reliability required of the hardware, and the presence of formidable competitors like Cisco Systems, Ascend Communications (soon to be merged with Lucent Technologies), Cabletron will attempt to move on an opportunity foreign to a company known as a provider of equipment to corporate offices.

"It's something totally different," said Trent Waterhouse, senior technology architect at Cabletron, in a recent interview. "It's a new high-end platform, but it's completely focused on the service provider."

Cabletron has said it is interested in collecting a larger share of its sales from service providers as part of a rebound strategy. In its previous quarter, that niche accounted for about 10 percent of the company's revenues, according to executives, who have set a goal for the lucrative niche of 20 to 25 percent of total revenue.

Cabletron yesterday beat estimates for its most recent quarter.

Sneak peak
Earlier this month, Cabletron displayed what executives called a "prototype" version of the as-yet-unnamed device based on technology from its Yago Systems purchase at the Supercomm communications industry trade show in Atlanta.

With the device, Cabletron will enter a market littered with veterans of the ISP customer wars as well as a slew of well-funded start-ups looking for a technological edge. The company hopes to extend the use of its Yago technology from the less lucrative "edge" of a service provider network into the back-end Internet "core" of an ISP's connected sprawl.

There are rumors currently circulating that Lucent may take out one such start-up, Nexabit Networks, in order to keep pace in the high-speed race. Even after the company's proposed merger with Lucent, Ascend executives have also said they were working on their own internal technology. Lucent's strategy is expected to become clear upon the closing of the Ascend deal, expected at the end of the month.

Cisco has already shipped a version of its routing technology for the high end, called the 12000 series, into some of the largest next-generation networks being built, such as Qwest Communications' layout. But that has been eclipsed, from a speed standpoint, by start-ups such as Nexabit, Avici Systems, and Juniper Networks, among others.

Analysts said Cabletron's late arrival in the market to provide the back-end equipment for ISP networks could prove daunting. "ISPs have their incumbent manufacturers," said Michael Howard, principal analyst and founder of market researcher Infonetics Research. "It's hard to displace them."

Internet hopes
But Howard noted there is hope for Cabletron, since the firm is attempting to focus on certain niches of the communications services industry, in which entrenched equipment companies have less of a stranglehold. "I think they're serious about the service provider market," he said. "The challenge is to prove it."

Earlier this month, Cabletron's co-founder and chief executive Craig Benson resigned. The former chief executive of Yago Systems, Piyush Patel, replaced him, promoting his entrepreneurial skills.

Following the announcement of the company's most recent fiscal performance yesterday, Patel hinted at the company's plans for what he called a "multi-service aggregation platform." Executives have said the new Yago-based device will include a highly dense collection of links for older synchronous optical network (SONET) technology, high-speed networks based on asynchronous transfer mode (ATM), and T3 leased lines, among other features.

Cabletron executives said the new device has been in development for six months using a dedicated team of ISP-focused engineers and will be rolled out in more detail at this fall's Networld+Interop networking industry trade show.

"What's been surprising is how much of the new technology in the past year has been Yago-based," said Infonetic's Howard. "They'd really be hurting without that acquisition."