If Don Reed, left, the new president and CEO of Cabletron Systems, was asked to characterise his leadership, the first two words out of his mouth would be mature and aggressive. Reed describes Cabletron as a vendor on the brink of major expansion, with numerous new business opportunities and cash in the bank just waiting to be invested. IDG editor Peter Wolchak spoke recently with Reed about his plans and about the changes he sees for his companyIDG: At one time, there was a sense that Cabletron was an aggressive, in-your-face company. Now it seems that has been toned down somewhat, and that maybe there's an edge that has been lost.
Reed: To me there's a difference between being aggressive and some of the anecdotal reputational-issues around Cabletron. Bob Levine (Cabletron's former CEO) has done some things that I guess would be categorised as rather bizarre. But this was a company that needed to get up and wave its arms to get attention, and it was successful.
So I don't see a shift towards being less aggressive. There is a need to be seen as a mature business moving forward, especially as we move into strategic relationships with larger users.
As you deal with telcos and major financial institutions that are spending millions of dollars on your product, they want a sense that there is stability.
In the last two months, I've spoken to some larger users who feel a higher degree of comfort knowing there is someone in charge who has a serious, mature approach to the business. I'm not suggesting Bob wasn't serious, but the reputation around the business had to change.
IDG: What are you hearing from users? What is their number one concern?
Reed: I've spoken to a lot of users. What I hear from them is that we have good products, good services and competitive prices, but we're not very well known, and they're nervous about that.
Because people outside of the data centre don't know who we are, they are worried about our viability, about whether we're going to be purchased.
So we're going to do a lot more advertising, a lot more marketing and a lot more support through our VARs and integrators. You're going to hear a lot more about Cabletron.
Also, we're going to look at our name. We might change it. Cabletron does not say what we do, it says what we did.
We'll also look at branding names. As soon as I came to the company, I said: guess who named MMAC? Do you think it was a marketing person or an engineer?
IDG: Do you plan to overtake Cisco, and if so, how?
Reed: First of all, I don't try to catch anybody. This is a business with great potential, great technology and wonderful people, so our task is to find the right strategy for Cabletron, put our heads down and then go like the devil.
IDG: So what is the right strategy?
Reed: First, we will look at acquisitions and partnerships differently than Bob did - I will be much more aggressive. We're looking at some significant opportunities as we speak.
We're looking at acquisitions rather than doing all the software development ourselves.
I have a rule: if you tell me we're going to roll out the product in March, then I'm not going to the press and people on the street and tell them we're going to be late. So if you tell me you only think you can do it, I'm going to go and acquire a company, but if you tell me you can absolutely do it, then I'm with you.
But nothing kills you more in this business than not meeting dates.
IDG: What is the time frame for the acquisitions?
Reed: The next month or two, at the latest. It all depends on whether I can close the deals. But we're looking at significant acquisitions that can put us over the $US2 billion mark and move us towards $US3 billion. I will be very aggressive.
IDG: What else will you do to strengthen Cabletron?
Reed: Another area is to look at the enterprise and our product line. Where are some of our holes and where do we need a better focus to provide an end-to-end solution? What do we need to attain leadership in the service providers' space?
Leadership means being number one or two. I'd like to be arrogant and say number one, but after two months on the job I don't want to be arrogant. But I come from a telco and I know what is necessary to get into those accounts and be a prime vendor.
IDG: When you talk about moving into the service provider space, do you mean that Cabletron will supply access or you will supply products for access providers?
Reed: My definition of that space is the ISPs, telcos, cellular business and the cable television business. We want to supply the hardware and the software for those industries.
IDG: How does Spectrum, your network management product, fit in?
Reed: Spectrum is the jewel in the crown. We have used it in the past as a push strategy - we sell the hardware and then we sell Spectrum. I'm reversing that. We will use Spectrum as the pull strategy.
We have the baseline product, and we want to enhance that on the application side and make it the premier product for total network man- agement. If we can get in there and become one of the prime vendors, there is a 10- or 15-fold opportunity to sell hardware.
IDG: A lot of hardware vendors are increasingly seeing software as the more lucrative end of the business. Did you look at Spectrum and see your best product or did you decide you needed to concentrate on software margins?
Reed: It's a combination. This is a company that was born and bred on hardware. So when I came in I said: folks, we have to adjust our thinking, and we have to begin to be more aggressive in using Spectrum as an entrée to users rather than as an add-on to hardware. This can be a $US1 billion product, rather than a $US200 million product, in the next year or year and a half.
IDG: I'm surprised you haven't talked more about routers, considering Cabletron has recently invested in router-vendor Yago Systems. Will routers be more of a major focus?
Reed: I think the answer is yes, but that says you're almost competing with yourself. If you have a flat network that can replace the router, then why are you getting into routing? It's all about making sure the sales force has as many options as possible to sell products to users. Does that mean we're going to make a major move to compete with Cisco on routing? No.
IDG: If Cisco has its way, it will perpetuate routing until the end of time, so if a company wants to move into the space Cisco is now in you're going to have to win some hearts and minds with respect to a different way of moving traffic, a way that is not routing. How will you do that?
Reed: Some of the acquisitions we're looking at have technology that will do just that. Some of the technology that's out there - that can take some of the latency out of the traditional router and move stuff along faster than it can move today - is a killer against a company like Cisco. That's the next generation, call it routing or call it what you want. Someone is going to come up with that, and we're moving as quickly as we can to figure out what that is.
IDG: How important is the price point for that type of technology?
Reed: We're looking at some companies that have very exciting technology that operate at a fourth of the price point per port, compared to Cisco routers. We have it in our labs now, we're kicking it and testing it to make sure it's what some folks say it is. And if it is, we will move quickly to take advantage of that opportunity.
IDG: Before Cisco buys it?
Reed: Yeah. So if I have to buy it next week instead of a week and a half from now, I'll do that. There's no reason for us to get beaten by anybody in the market place.