Cabletron moves on

Co-founder Benson hands over CEO reins in an effort to refocus the firm.

By Jim Duffy
Network World, 06/07/99

Craig Benson, the embattled chairman, president and CEO of Cabletron Systems, resigned last week from the company he co-founded in a New England garage more than 15 years ago.

Benson is passing the CEO torch over to Piyush Patel, Cabletron's senior vice president of worldwide engineering and former CEO of YAGO Systems, a router start-up that Cabletron acquired last year.

Benson shares some departing thoughts with Network World Senior Editor Jim Duffy.

What prompted your resignation?

Three things: Piyush is extremely capable and has had tremendous success in his past life at Cabletron, YAGO, Sun and Intel. And the network world ischanging. It's now more toward the service provider marketplace.

That's not to say we're abandoning the enterprise, but a lot of our enterprise customers are trying to use service providers to augment their networks. So we've got to move in that direction. Piyush is more comfortable in that market.

Another thing is, in the Layer 3 space, we're No. 1. So we've come from a position where no one would consider us as a routing vendor, to being first place in that space in a year. That's pretty awesome, and that's what Piyush did.

The third reason is this company is still stigmatized by one person: Me. And that's not right.

There are 5,000 people that work hard here every day, and Cabletron should be given credit as an organization.

So it's time to make this company's image change from that of a one-person organization to that of [a company] of 5,000 people.

Did your board of directors think you were holding Cabletron back?

No. This is all my idea.

Three years ago, Cabletron was notorious for bashing routers. Do you find it ironic that you're now handing the reins to a former CEO of a router company?

We hated routers because . . . we like to give customers products that last more than two years. To us, software-based routers were not able to handle voice and data. Hardware-based routers fix that.

You seemed resistant to selling the company when Wall Street thought a sale would be good. Did you actually turn away any potential suitors?

Wall Street has a quarter-to-quarter mentality. I founded this company. Selling the company is certainly one opportunity, but it's not the only opportunity. I try not to do anything for the short term, but what's best in the long run - what's best for our customers, our employees and our shareholders, in that order. What I believe is best for Cabletron in the long run may or may not include an acquisition, but certainly, you don't marry every single person you ever met.

As you look back, what are you most proud of?

Bob [Levine] and I started this without venture capital, and we did it as a cable business.

No one ever thought we could be a high-tech manufacturer. No one thought we could be successful selling against SynOptics in the late 1980s.

Then everybody thought we were crazy to do network management. We've got 450 patents; Cisco has 55. Patents by themselves aren't proof of innovation, but you have to develop it first in order to get a patent.

The [current thinking of many people] is that we can only be successful if we get acquired.

But I actually think it's a detriment to be a large company. Certainly you have deep pockets, but if you take three years to develop a product, you've lost the market opportunity. That's why all of these start-up companies are very successful. Cabletron is going to be intensely focused under Piyush's direction.

We've got $200 million invested in research and development, $600 million in the bank, no debt. . . . We're perfectly positioned to be innovative, fast-moving and able to take advantage of these opportunities that Internet speed has created.

What would you do over?

What I used to say was I was too young and stupid to know any better than I couldn't be successful at Cabletron. No venture capital, no business plan, a cable company - [there were] 10,000 manufacturers of cable back then and we were successful.

If I looked at the same set of circumstances now with the knowledge I have, I never would have started Cabletron.

What are you planning on doing now?

I was thinking of running for senator in New York against Hillary Clinton. I've never had more than one week off. I'm looking forward to spending some time with my family.

I'm still going to be a board member here. If Piyush wants any help, he has my phone number.

My old buddy Bob Levine is looking for a golf partner occasionally, so I can go hang with him. I'll find things to do.