Cabletron switching gears
The company hopes to reinvigorate itself with a bevy of activity this spring, including the possible acquisition of a low-end switch company.
In the aftermath of the abrupt departure of CEO Don Reed and reemergence of cofounder Craig Benson at the helm last week, many in the industry were nonplused, noting the company's lingering product and sales channel concerns. To some, it seemed an odd time to make a midstream change.
Nevertheless, some pundits gave Benson the benefit of the doubt, given the executive's experience in delivering on the nuts and bolts of a strategy. At the time of the announcement, the new CEO promised a continued focus on acquisitions as a means to update the company's product portfolio.
In that vein, Cabletron is expected to announce plans to acquire low-end switchmaker NetVantage in the next few days, according to sources.
NetVantage executives refused to comment on the acquisition reports. Cabletron could not immediately be reached for comment.
"For Cabletron to get something that's low-cost, that's competitive, that they could get out to the channels...that would be good," said Craig Johnson, an independent industry analyst.
In addition, the company is slated to introduce next week a new version of its successful Spectrum set of network and systems management tools. Rumors abound that the company essentially will split the software unit from the company's hardware divisions so that it can operate independently of Cabletron-specific requirements.
Cabletron also is expected to announce plans to revamp its entire line of SmartSwitches, the flagship brand for the company's switch devices, at this spring's Networld+Interop networking industry trade show. Significant performance gains are expected for the SmartSwitch 2000, 6000, and 9000 lines with the introduction of new ASIC (application specific integrated circuit) technology.
The networking firm would gain access to a sales channel presence via a purchase or possible licensing arrangement with NetVantage, but some wonder where that deal would leave the hardware Cabletron gained via the recent acquisition of Digital Equipment's network business, since there would be significant overlap between the two companies' product lineups.
"There are several questions outstanding if they did a deal with them," noted Johnson, referring to NetVantage.
Cabletron's arrangement with Digital seems to be up in the air given the systems giant's recent merger with PC giant Compaq Computer. Compaq has made it clear that it will attempt to grow its networking business by a considerable sum and already has entered a relationship with Extreme Networks to license gigabit-speed technology.