ARN: Why has Cabletron been divided into different companies?
Fewtrell: The break-up is all about unleashing shareholder value. Cabletron will continue to exist as a major shareholder in each of the four new companies, each of which will have an IPO later this year.
We are dealing with a market where single-product startups with less than 10 per cent market share have enormous capitalisation because of their share price. The reality of the markets is that these little guys have sex appeal and attract a high share price.
Cabletron had significant market share across a range of different products, no debts and a series of blue-chip clients. We have split into four separate companies to achieve a more representative valuation within the Cabletron shell. It is all about stripping back the Cabletron covers and showing what is underneath.
How are you promoting the new brands?
We have put a lot of effort into the Cabletron brand in this region, and I have no intention of distancing myself from the name.
We don't see rebranding as too much of a problem. It is just a matter of working under a different name, and getting the new names out there.
At this stage I carry two cards, my old Cabletron card and the Enterasys card. All of the new brands will be in some way related to the Cabletron name - each will be a "Cabletron company". The companies will be working together to a large extent.
People will be confused for a time but I have been through multiple rebrandings. Name changes in this industry are not uncommon, so I'm not phased if people get confused at first.
Ultimately however, the Enterasys brand will gain enormously because of its relationship to the new wireless offerings. Cabletron is well recognised in the enterprise sector because of our market share, but in the SOHO and retail sectors we are not a big name. Most people see their PCs at work, but they don't have any idea where they have come from or who put them together, let alone how the network is maintained. All that is going to change because our wireless offerings will be going into every level of the market and the Enterasys name will be highly visible on all the offerings.
How will the channel be affected by the changes?
For a long time Cabletron was not geared up to deal with the channel. However, over the last couple of years, our relationship with the channel has strengthened. The channel focus came from a realisation that there are basically two ways for a vendor to get its name out there. One involves working with the media and the other involves working closely with the channel to actually get feet on the street.
Cabletron now recognises the importance of the channel, and, if anything, the changes to the company structure will make that focus stronger. Enterasys is certainly looking at expanding into the SOHO and retail sector with our wireless offerings, and a large part of the channel will see the results of that push.
The structural changes to Cabletron will be a positive arrangement for our channel partners. They will benefit from a greater product focus, and faster access to each of the different divisions.
Initially however, our channel partners will not notice very much of a change. The new companies will form along the divisions that already existed here in Australia. We are not so much changing but enhancing our channel operations.
How are you planning to approach new channel partners in the SOHO and retail sectors?
We are in the process of signing with a volume distributor which has its own set of resellers, and has a lot more experience in dealing with that sector. Basically a lot of the new wireless offerings are so inexpensive that it isn't worth my while to sell them - I have to go through a volume distributor.
Wireless offerings are going to represent a fantastic opportunity for the channel. The applications are endless and it is at the right price point for anyone to be able to pick up on the technology straight away.
Will there by any changes to your dealings with enterprise-level partners?
Clearly Cabletron has had a lot more experience dealing with the channel at the enterprise level, and we do not have any plans to change the way we are working with our enterprise partners.
The companies which have emerged from Cabletron can only be a positive for the enterprise channel. The changes will allow us to provide our channel partners with more focus on specific products and areas.
At this level, our target markets haven't changed. We aim to continue to address the markets we have targeted up to this point. In many cases, we work very closely with our resellers and therefore very closely with their clients to help to manage the sale.
We try to make sure that we are visible in the industry our partners are targeting. We focus on actively going out there and creating opportunities for the enterprise channel, so we are working to create market need for the Enterasys offerings.
When it comes to the new wireless offerings, we have provided all the sales and presales guys with wireless connectivity, so they will actually use what they are selling.
Their clients will become more interested in the technology when they see it working in the field, so we have made a special effort to provide our partners with the equipment to make that happen.
What is the future of wireless technologies for the channel?
It will be a major area of growth because it is very cheap and has applications across the market.
While the benefits for the enterprise sector in terms of hot desking and productivity are enormous, there are also some fantastic home applications that are possible because of the entry price.
Wireless is going to affect the PC market at every level and that means that resellers at every level should be looking at getting a piece of the action.