By Jo Maitland
In a move that analysts agree is further testimony to its confused and direction-less networking strategy, Compaq Computer Corp said this week it would re-brand hardware from Cabletron Systems Inc in a bid to raise its profile in the market. Compaq’s partnership with Cabletron began in October 1998; an obvious choice following Cabletron’s acquisition of Digital Equipment Corp’s networking division the year before. At the time, Compaq said it would use the links between Digital’s existing network services unit, which Compaq then owned, and Cabletron’s product range as a way of hoisting itself into the mainstream networking market. However, since then, the PC and services giant has not been able to work out that strategy. As well as reselling Cabletron and Digital equipment, Compaq also said it would co- develop products with Cabletron. But the first offering, a GIGAswitch/Router backbone routing switch, is still yet to materialize, eight months down the line.
Under this week’s announcement, Compaq said it was changing its agreement with Cabletron from reselling to re-branding the networking vendor’s products. In addition, it also promised to optimize Cabletron’s gear on Compaq servers and to continue the joint development work the two started eight months before. Yet speaking to ComputerWire yesterday, John Ardini, VP of network and access products, was unable to give any more details about the new alliance; the optimization of products or any new hardware to come out of the partnership. Apart from a fleeting mention to a high-end Gigabit Ethernet switch and a load- balancing switch, which he said would appear at some point, Ardini appeared to have little knowledge of the alliance at all.
At the beginning of this year, Compaq announced it wanted to take on the top network players including Cisco Systems, Nortel Networks Inc and Lucent Technologies Inc and restructured its networking business in line with this strategy. The company dissolved its networking division and farmed out its products to the corresponding server divisions. Gigabit NICs with high end servers, remote access devices with the remote access server and so on, in an effort to use its incumbent position in the PC market to build up its network business.
Compaq is marketing this week’s Cabletron announcement as its big leg up into the electronic commerce market, echoing a similar story from the likes of rivals HP and IBM, which have both announced e-commerce strategies on the back of their own networking technology. The key difference being that both IBM and HP have developed their own networking hardware and have well- established units through which to sell their products. Compaq does manufacture some of its own low-end equipment but it relies on Cabletron and other partners for the lion’s share of its offerings. Nonetheless, Ardini insists the Compaq-branded products from Digital and Cabletron, will meet the critical demands of Compaq’s Nonstop eBusiness customers.
Moreover, while Compaq is ready to trumpet its partnership with Cabletron at the OEM level, it’s apparently not interested in putting its money where its mouth is and backing the struggling networking vendor financially. Cabletron is one of our technology suppliers, we are a customer of theirs and that’s it, said Ardini. A Goldman Sachs analyst said that Compaq will have to move beyond mere partnerships in order to realize its goal of becoming one of the top networking players. This boils down to a need to make acquisitions, he said. A combination of organic growth and research and development are unlikely to give it the breadth of technology it needs quickly enough, especially in the area of voice, where it has no expertise. In the meantime, Compaq has teamed up with yet another vendor, this time Nortel Networks, to add PBX functionality to its NT servers.
