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Channel touted as Cabletron's saviour

Channel touted as Cabletron's saviour

Cabletron Systems' recently appointed CEO, Piyush Patel, is on the lookout for Australian acquisition targets and believes the company's local performance is not up to scratch.

Patel told Asia-Pacific journalists on a teleconference call last week the company is looking to invest in professional services, support and startup technology companies. "In the beginning, our plan is to go after some medium-sized companies," he said.

Patel is also looking to improve the company's long-term viability by seeking better performance from Cabletron's Asia-Pacific business.

According to Patel, Cabletron Australia achieves annual revenues of between $US20 million and $30 million, but it can still do a lot better in the face of competition from the likes of Alcatel, Nortel Networks, Cisco and Lucent.

"We definitely can do a lot better that what we are doing," he said.

However, Cabletron's Australian managing director, Ian Fewtrell, has refuted what otherwise might be interpreted as a wake-up call.

"Of course we can do better, but I'm not sure he has the correct information to make that statement," he said.

Fewtrell told ARN that Patel's local revenue figures were wrong. "The numbers are substantially more than that," he said.

Cabletron achieved 192 per cent growth in revenues last year, he reported.

Fewtrell said he would e-mail Patel to clarify the situation.

During the conference call, Patel hinted at the possibility of undertaking a management reshuffle throughout the region. "We are always looking at restructuring our offices," he said.

Fewtrell said he has no knowledge of a local restructure.

Patel explained the Asia-Pacific market remains strategically important to the company, particularly in the service provider and enterprise arenas.

The company is moving to address the challenges by pouring more resources into marketing and its channel partners. It is also moving to strengthen partnerships with such companies as KPMG, Arthur Andersen and Lucent.

"We have not done justice to our technology from a marketing point of view," he said.

Patel said the company receives around 60 per cent of worldwide revenues from the channel, with the remaining 40 per cent from direct sales.

"We are in the beginning phase of this channel program," he said.

In the future, he would like to see this rise, primarily through "solutions focused" marketing in the service provider and enterprise markets.

Meanwhile, Patel said he is not preparing the company for sale and renewed his commitment to making it a financially strong stand-alone company, which he observed has $US500 million cash in the bank.

"This quarter our expectation is to break even, so to speak," he said. "I think things have already started to turn around. "Our goal is to grow at 30 to 40 per cent per year."

Patel said Cabletron is worth $1.4 billion and said he would be "happy" if it grew to hit the $2 billion mark over the next few years. Meanwhile, he said the company's future R&D efforts will focus on Terabit routers, edge routers, network management and integrated voice and data products.

The company is also looking forward to making a splash at next month's Networld+Interop show in Atlanta, which will see a new release of Cabletron's enterprise network management offering, Spectrum 5.2.


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