The merger between Bay and Nortel is good news for Cabletron and will. not impact its relationship with Nortel, according to Cabletron's UK managing director Ray Sangster. Nortel had a loose alliance with Cabletron for the development of Lan products.
Sangster also believes that Cabletron's OEM deal with Fore will be unaffected by Fore's alliance with Intel to marry ATM and Gigabit Ethernet. "Even if that relationship finished now there is a clause to provide products and support for five years," said Sangster.
However, he conceded Cabletron has begun investing in the development of its own ATM products. The company launched its 10Gbps Smart Switch 6500 ATM switching chassis at the Networks telecom show last week.
Cabletron has also changed its strategy to focus more on growth through acquisitions than organically. It has announced it will acquire NetVantage, a provider of Ethernet workgroup switching equipment in a stock swap valued at about $100m. With the acquisition, Cabletron hopes to expand its presence in the indirect sales channels and in the 10/100Mbps Lan switching market.
The company has also announced plans to enter the Digital Subscriber Line (DSL) market with two more acquisitions. It will pay $25m (#15.2m) in cash and stock for the remainder of FlowPoint, maker of xDSL and ISDN equipment, and $33.5m (#20.3m) for Ariel, which offers ADSL-to-ATM equipment.
Sangster said convergence meant that the big would get bigger and the small would disappear. Cabletron has always rebuffed overtures for acquisition but Sangster described a take-over of the networking giant by Compaq as "not beyond the bounds of possibility".
Cabletron has announced a first-quarter loss of $152.3m (#92.3m) on sales of $365.7m (#221.6m).
Cabletron attributed the losses to its March acquisition of router and switch maker Yago Systems. Excluding that, its profits hit $6m for the quarter ending 31 May.
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