Cabletron CEO: we need better marketing

  • Eileen Yu (Computerworld)
  • 27 August, 1999 12:01

Piyush Patel, Cabletron Systems' president and chief executive officer, frankly admits that the com-pany needs a more aggressive marketing strategy, and explains why the recently much talked about networking vendor still has a major place in the industry.

"Cabletron has superior technologies, but we have not done justice to it from a marketing point of view," Patel said.

"So we definitely have a lot of improvement on the marketing front."

Besides initiating a newly improved marketing plan, Cabletron's list of OEM (original equipment manufacturer) agreements with companies such as Compaq will help improve its "branding in the marketplace", he said.

Cabletron also re-engineered its marketing group "to make it more solution focused" in the enterprise and service provider markets, Patel added.

"My goal is to make sure Cabletron becomes the technology powerhouse and del-ivers solutions to the customer at affordable prices," he explained.

"What we see a lot of times is [that] networking giants like Cisco and Nortel don't cut prices, they tend to basically charge higher prices than smaller companies like Cabletron," he said. "The goal we have is to make sure the provider gives competitive advantage to customers."

Besides offering lower prices, Cabletron also has the upper hand in new "cutting-edge" technology over which these networking giants shy away from "because they have bigger things at stake", he added.

Patel noted that Cisco was late in bringing out Layer 3 switching because it was afraid of upsetting its customer base in its Catalyst 5000 LAN switches.

He said that Cabletron also has the competitive edge in providing for a sound network management platform, with its own Spectrum application.

The company recently announced plans to spin off its Spectrum unit, which will begin to operate independently from Cabletron in two months.

The company will kickstart a "very aggressive marketing campaign" to brand Spectrum as a separate independent entity from Cabletron, Patel revealed, adding that it made sense to do so because Spectrum is a multivendor platform which supports products from Cisco and Nortel.

Cabletron is likely to retain the Spectrum brand name which has already carved a place for itself over the years, he said.

The company will also roll out "a big partner program" which will involve more than 300 companies, and new applications that address issues such as service level agreements, he said, adding that the new release of Spectrum 5.2 is also in the pipeline.

Cabletron however, has no plans to compete with the likes of Lucent and Nortel in Asia's service provider core market because these players already have a strong foothold in this market, Patel noted.

The company plans to target new emerging segments which do not involve large telecommunication providers, he added, and singled out "fast-growing" segments such as the Web hosting or content hosting market, which will be "a $US14 billion market in 2003".

"We definitely are considering some acquisitions on the service provider side," he said. "The services business is manually intensive. So we are looking at several companies to beef up our offerings."

Cabletron is also looking to form alliances with services and consulting companies and telco companies "to leverage their expertise", he added.

But while Patel is keen to acquire companies relevant to its business strategies, he firmly dismissed a rumour that Cabletron is itself up for sale, a rumour that has been circulating for some time.

"My goal is not to dress up the company for sale. My goal is to grow the company, make it a stand-alone healthy company," he stressed.

"At the same time, there's a convergence of data networking companies teaming up with telco companies so we do have the intention to become strategic partners with some major telco companies in order to be successful."

Cabletron's goal is to grow at 30 to 40 per cent year on year, "so it's enough to refuel some of the profits we make back into research and development", he said.

"If we grow to a $US2 to $US3 billion company in the next two to three years, I'll be happy with that."