The new face of Cabletron Systems

Former YAGO Systems CEO looks beyond enterprise networks to emerging markets.

By Jim Duffy
Network World, 06/14/99

Piyush Patel, Cabletron Systems' new CEO, has an aggressive game plan to stimulate revenue growth and keep the beleaguered company on the cutting edge of new markets and technologies. The former CEO of YAGO Systems, a router company acquired by Cabletron last year, has replaced Cabletron co-founder Craig Benson. Patel shared his thoughts about his new job with Network World Senior Editor Jim Duffy.

What are your priorities?

Our basic focus is going to be on emerging growth markets - service providers, multiservice cable operators, digital subscriber line, content hosting and server load balancing.

There's also another market - we call it multidwelling units. It's small, intelligent malls and apartments. In the last couple of months, we've been bringing out products [including WAN products introduced last week at SuperComm '99 in Atlanta] and building the relationships in those areas. This includes not only hardware products with Layer 3 and 4 features over the WAN links, but also Spectrum [network management] and professional services.

Another thing that is doing very well is the outsourcing model - more leasing-type options from service providers. We've been talking to a couple of service providers about leasing options in which we charge per port, and they turn around and charge whatever we charge per port and then something else.

Also, we've been pretty strong in the enterprise market, and we intend to keep fueling that marketplace with new products.

What's been holding Cabletron back up to now?

We used to be in the hub market. We've transitioned. Ninety-five percent of our revenue is from completely new products that came out over [a one-year period].

That's the reason the revenue growth doesn't look as big as it should.

We've also been more enterprise-focused and haven't done a very good job of focusing on the service provider marketplace.

As you know, the enterprise market is growing only 8% year-to-year vs. the service provider market, which is growing over 40% year-to-year. The service provider market is a huge opportunity. We are going to focus a lot of our effort at going after that market.

What are Cabletron's challenges going forward?

We need to expand our customer base going into the service provider market or any new emerging market. Also, we need to stay open to all the different possibilities - either partnership with a [group of telecommunications firms] or investment from them to work on some joint projects.

What's the likelihood that Cabletron will remain independent?

Right now the focus is on expanding the customer base and continuing as a smaller, fast-moving company, and to keep attacking the service provider marketplace.

As you know, consolidation is go-ing on in the marketplace with the rapid growth in voice and data. Right now, none of the companies have any revenue coming out of voice/data convergence.

So there's no dominant player in that market right now. We are working hard on the voice strategy and have some products that are doing very well in the market.

We'll continue to do partnerships with telco companies, and if they fan out [into more than that] we'll be open about that. So we're not ruling out any possibilities.

What prospects do you give Cabletron for success going forward, given that Cisco is approaching $15 billion in annual revenue, 3Com is teetering at the edge of being acquired, and Bay has been swallowed up by Nortel Networks?

Cisco's definitely made big inroads into a lot of markets, but the overall marketplace is huge - hundreds of billions of dollars if you put all of the data communications businesses together. We want our fair share of the marketplace.

We have good product technology and a loyal customer base that we need to expand on. In the last two quarters we've been hitting the expectations that we set for ourselves, and I think we'll continue to hit them.