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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Trey McAtee who wrote (5671)	3/8/1999 8:50:00 PM
From: Jules V	Read Replies (2) \| Respond to of 8358

Cabletron Poised To Enter Services Market (03/08/99, 8:01 p.m. ET) By Kimberly Caisse, Computer Reseller News techweb.com Cabletron Systems Inc. is trying to stand out in the networking marketplace by embarking on a strategy that will get the company more involved in network software and professional services. Amidst competition that is driven by price per port, "what we're trying to do is carve out differentiation in two ways," said Mike Skubisz, Cabletron's chief technology officer. Cabletron's new software business unit is being built on the company's Spectrum network management software products, he said. It will focus on developing "value-added software" such as directory products, accounting and billing tools, asset management, virtual private network (VPN) service provisioning and policy administration tools. Cabletron also has launched a professional services organization that will work with the new crop of software, Skubisz said. "We want to have a practice in-house to sell [services] direct and outsource to partners." Executives would like to see Cabletron's services sales jump to $1 billion annually from today's $200 million in yearly revenue, which comes mostly from the Spectrum professional services group, he said. Cabletron VARs will have access to all the new products and services, Skubisz said. The company is especially interested in identifying partners that sell to specific vertical markets such as finance, health care, education and government, he said. The Rochester-based company is heading in a completely different direction with this strategy, analysts said. "I would say it's quite a change for them," said John Armstrong, principal analyst at Dataquest, San Jose. "It would not be unfair to say if Cabletron maintains its current direction-%96competing directly with Lucent [Technologies Inc.], Cisco [Systems Inc.], [Northern Telecom Ltd.] and 3Com [Corp.]--it is not a winning combination. Whatever they're doing, it has to be preferred to inaction." "Up to this point, they've stayed hardware-centric and never wavered from that," said Greg Cline, service director of enterprise market and channel strategies at Summit Strategies, Boston. "The circumstances have forced [Cabletron] to do this. The hardware-centric strategy is not going to fly." Cabletron, an enterprise-focused company, is banking on the hope that entry into these two areas will get it into the service provider market. It has established a service provider business unit to handle the feat. However, Cabletron executives have halfheartedly talked about getting into the service provider space for a few years, Cline said. "We want to start to leverage the service provider marketplace," Skubisz said. "We want to provide products that meet [at the] edge" of both enterprises and service providers, he said. In addition to the software products that will provide service offerings, Cabletron plans to introduce edge products such as a voice-over-IP gateway and IPsec-compliant VPN routers, Skubisz said. In the next month or two, Cabletron plans to release a family of voice-over-IP gateways, he said. One product will be an integrated gateway-router; the other will be a stand-alone gateway.