Users Give Cabletron Split a Cautious Thumbs Up

ROCHESTER, N.H. (02/24/2000) - Cabletron Systems Inc. customers are generally upbeat about the company's plans to split up, noting that new products and technologies may now come to market sooner.

A few weeks ago, Cabletron announced that it will divide into four smaller companies that will be able to more effectively compete in a rapidly changing market and reignite investor interest in the firm. The plan was the culmination of an 8-month-long restructuring following the resignation of CEO and founder Craig Benson.

The new companies will be called Riverstone, Enterasys, Global Network Technology Services and Aprisma. Riverstone will focus on the service provider market. Enterasys will target large enterprises installing e-commerce networks.

Global Network Services will address professional services. And Aprisma will provide network management software for service providers and enterprises.

Cabletron will function as a holding company for the four companies until they are taken public or sold. Cabletron will strive to maintain the Cabletron name and brand, but company officials say the name may also be retired.

"I think it will be good for them," says Brandon Ross, director of network engineering for MindSpring Enterprises in Atlanta. "They'll be able to focus on the individual areas of the market that each of the four separate companies target with little distractions."

"[The breakup] will cut out some of the bureaucracy and make it so that the companies can be more aggressive in their market, be quicker to develop new products and get them out the door," says Ken Sorenson, director of networks and systems at Butler University in Indianapolis. "It kind of gets them into position to be able to react as the markets change, which they haven't done in the past."

Sorenson uses Cabletron's SmartSwitches and SmartSwitch Routers. It's unclear which company will assume development of these products - Enterasys, Riverstone or both - but Sorenson is confident that cross-licensing agreements between the new companies will keep the technology relevant for his use.

Even so, there is still caution and concern among certain Cabletron users. Some fear being lost in the shuffle; others wonder whether the divided Cabletron will be as strong as the whole.

"Always with these things you get mixed feelings," says Steve Dougherty, director of Internet operations at EarthLink in Pasadena, Calif. "There's the issue of critical mass and making sure the right players get into the right organizations. There's always the minor issues of disruptions while reorganizations occur. Everyone is well-intentioned, but obviously everything is up in the air."

Still, Dougherty says he believes the plan should make Cabletron more efficient and less bureaucratic.

Craig Timmons, director of university computing at the University of Charleston in West Virginia, agrees that the split could make Cabletron "light-footed."

But he also hopes the Cabletron companies can maintain the same level of support.

"I've always gotten good service from them and good response from them, and if that continues, I don't see it as a bad thing," Timmons says. "There's always the uncertainty of how that's going to pan out, but I think it's definitely a thing to take a look at and see how it comes out."

Analysts are adopting a wait-and-see attitude toward the divestiture. Current Analysis, for example, says the split is a necessary initial step for Cabletron to compete in next-generation markets, but the company has to say and do more.

"Unless this is the first of a series of new competitive strategies and decisive actions, we do not think the divestiture will be successful and may in fact do more harm than good," wrote analysts Fred McClimans and Tere Bracco in a report released two weeks ago. "More than a repackaging, Cabletron needs a new direction. Cabletron should have announced a move into a truly burgeoning market, perhaps with an acquisition of an optical company or a major initiative in converged services product development. We question their motives for choosing a reorganization rather than a rebirth."

Such skepticism cannot dampen the spirits of users though, who tend to like things the way they are.

"As far as I can tell, I don't see anything that's going to change," says Butler's Sorenson. "I don't foresee any major problems. I guess from my standpoint it's a plus."

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about AprismaCabletron SystemsEarthLinkGlobal Network ServicesMindSpringMindSpring EnterprisesRiverstone

Show Comments
[]