Cabletron Systems Inc.’s impending split into four operating units may prove beneficial to the firm’s shareholders, but it won’t do much for Cabletron customers, according to industry analysts.
“If you’re a Cabletron customer you’ve got to be pretty worried at this stage, because you haven’t got all the details fleshed out in terms of where the company’s going and what they hope to do with all these different business units,” said Dan McLean, an analyst with IDC Canada Ltd. in Toronto.
Enterprise users with installed Cabletron equipment have to be wondering about their gear’s future viability, McLean noted.
“People who are looking to upgrade from what they’ve got, if they’re Cabletron customers, a sizeable portion will probably be looking at other solutions besides Cabletron as a migration path,” he said.
Mike McConnell, an analyst with Infonetics Research Inc. in San Jose, Calif., said he doesn’t believe Cabletron customers will abandon the company because of the split.
“I think they’ve (Cabletron) always been really strong on their service and support and I’m sure…they’ll make the transition as painless as possible,” he explained.
But McConnell did note that customers may be confused about where to turn for support for specific products, now that there are four companies rather than one.
“What Cabletron needs to do is lay that out and make it clear so there’s no confusion, because customers won’t want to run around figuring out where they need to go for help,” he said.
The four Cabletron subsidiaries will each have a specific focus: Enterasys Networks will concentrate on enterprise customers; Riverstone Networks will target service providers; Global Network Technology Services will focus on professional services; and Aprisma Management Technologies will deliver Cabletron’s Spectrum network management software.
All of the companies will begin as subsidiaries of Cabletron, but Cabletron’s ultimate goal is to make each subsidiary a publicly traded company.
IDC’s McLean said Cabletron is likely hoping the individual pieces of the company will attract more investor support than the organization as a whole did.
McLean saw hope for the Aprisma and Global Network Technology Services units.
“If I was to guess, I’d say their best play would probably be with their old Spectrum (Aprisma) business,” he said. “I think the services one may do well, although that’s speaking not really knowing the presence they have in Canada. But Cabletron employed a fairly skilled, high-end set of consultants for its solutons.”
But McLean questioned the viability of the carrier and enterprise network units. Cabletron doesn’t have much of a service provider presence and the enterprise division will be hurt by Cabletron’s limited product set, he said.
“Cabletron hasn’t had a lot of innovation there…I would see that as a business that will be relegated to a niche,” he explained. “They seem to be specializing in Layer 3, Layer 4 switching and that will probably be where that business unit will put its focus.”
