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October 14, 1998

COMPAQ OEMs CABLETRON FOR NETWORKING

By CBR Staff Writer

Compaq Corp has struck an OEM deal with Cabletron Systems Inc to bring on board higher-end networking equipment for large corporate users, as it tries to achieve its stated goal of becoming a major networking company. Through the deal Compaq will put its name on both ordinary Cabletron products as well as equipment that has been tweaked to meet specific Compaq designs. Cabletron’s acquisition last November of Digital’s networking division in November last year, makes the partnership an obvious choice for Compaq as there are links between Digital’s existing network services unit and Cabletron’s product range, said Ian Whiting, director of Compaq’s Network Access and Communications Division in Europe. As for whether Compaq would consider acquiring Cabletron, which Whiting acknowledged is one of the few independent datacom companies left on the market, Whiting said it is too early for Compaq to swallow another large acquisition. Compaq, however, does not rule out the possibility of Cabletron being snapped up by another company. Were Lucent Technologies Inc to step in and buy Cabletron, a far from impossible turn of events, then Compaq would most likely maintain the OEM relationship, Whiting said, especially as Compaq has a history of working with Lucent on Prominet. Even if Compaq has no stomach for further large acquisitions in the short term, Whiting admitted that the company will have to move beyond mere partnerships in order to realize its goal of becoming one of the top networking players. A combination of organic growth and research and development are unlikely to give Compaq the breadth of technology it needs quickly enough, especially in the area of voice, where Compaq has no expertise. This, Whiting acceded, boils down to a need to make acquisitions. In the meantime Compaq’s initial forays into voice will involve working on adding PBX functionality to its NT servers for small and medium enterprises. The first products to come from the OEM relationship with Cabletron include the GIGAswitch/Router 10/100/1000 layer 3, layer 4 enterprise backbone routing switch. With up to 56 10/100 Mbs Ethernet ports or Gigabit Ethernet ports, the switch is designed for use on a collapsed backbone. Other products include the Compaq Multiswitch 700, layer 2 switch for aggregating up to 240 Fast Ethernet and Ethernet departmental users ad the Compaq NC3131 10/100Gigabit Ethernet Server NIC.

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