Sep 13, 2013
Millions of years ago, huge dinosaurs walked the land. These were massive creatures that dominated the Earth and all that stood in their way. Dinosaurs today, though, are the things of myth, only to be found in books and pictures. About 15 years ago, the network industry had its own giants — Cabletron, Wellfleet, Synoptics, Marconi, Nortel, 3Com, Cisco, and Bay Networks all went toe to toe with one another for dominance in the network industry. Like the dinosaurs, almost all of them are now extinct, with Cisco being the only company to have survived. Cisco has remained in a dominant position by continually moving into new markets that add value to the Cisco network instead of relying solely on network infrastructure.
I remember looking at an old Yankee Group report (when Yankee Group covered networking) on switching technology, and reading that the market had become a three horse race, with 3Com, Cisco and Cabletron running neck and neck for market leadership. 3Com was taken out by HP a few years ago, and on Thursday September 12th, Extreme Networks acquired the last remnant of the old Cabletron company, Enterasys Networks for $180M — a number I think is a bargain considering it’s just over half of Enterasys’ revenue. Back in 2006, the Gore Group acquired Enterasys for over $300M with the plan of integrating the company into Siemens Enterprise and creating an end-to-end UC-data vendor that could go toe to toe with Cisco. Siemens is of course going through its own changes, as the company plans to rebrand itself later this year and it looks like networking won’t be part of the new company.
The end of Cabletron ends the run of one of the great, innovative companies of the Internet era. At its peak, Cabletron was about 6,600 employees and had over a billion dollars in revenue. Then, in 2006, the company reorganized itself, spawning not only Enterasys, but the following three companies:
Global Network Technology Services. GTNS was once one of the great network integrators in a time of many great integrators, including Lucent’s INS (International Network Systems). I actually worked for a company, Greenwich Technology Partners (GTP) that used INS as a model for its business. I guess the model was fitting, as GTP’s business wound up failing — as did INS and GTNS — as the dot-com bubble burst and the need for network integration services rapidly faded. As an interesting aside, I worked with Nemertes Founder, Johna Til Johnson, at GTP. Small world indeed.
Riverstone Networks. Santa Clara-based Riverstone was based on the technology from the YAGO acquisition, and was building switched Ethernet products in an attempt to compete in high-end networking with Juniper and Cisco. Despite having some good products, the company could never gain any real traction, and in 2006 went into Chapter 11. Shortly after that, CEO Oscar Rodriguez, who also spent time as Extreme’s CEO, convinced (suckered) Lucent to buy the remaining assets. Shortly after that, Alcatel bought Lucent and the Riverstone technology remains buried somewhere in AlcaLu.
Aprisma Management Technologies. The SPECTRUM products from Cabletron became the company we all knew as Aprisma and provided some of the best root cause tools available at the time. Make no mistake, Aprisma was a powerful root cause system that should have made it a market leader. The problem was the product was very complicated with a steep learning curve. CIOs used to complain that it would take months, even a year, for engineers to come up to speed and then if the person quit, no one would have any idea how to change the rules or use the tools. Aprisma was acquired by Marlborough, MA-based Concord Communications, which was then later acquired by Computer Associates. Like CA likes to do, it took a once-great technology and made it a mediocre feature in a mediocre management suite.
I like the acquisition of Enterasys by Extreme for a number of reasons. The combined entity is over $600M in revenue, making it the #4 enterprise network vendor behind Cisco, Huawei, and HP. The gap between 3 and 4 is about as big as the gap between 1 and 2 but it still makes Extreme a much more credible vendor. The assets of Enterasys fit nicely with Extreme as well. Enterasys has good security products and campus products, where Extreme has focused more on data center and higher-end campus. However, the product that I think makes this an absolute steal for Extreme is the wireless LAN suite. Enterasys has quietly been having success with its WLAN offering, winning Gillette Stadium (home of the Patriots) and Lincoln Field (home of the Eagles), as well as many schools. Given the fact that Cisco recently paid over a billion for Meraki, a price tag of $180M for the wireless LAN products and the rest of company seems like a bargain. Extreme had been OEMing Motorola, which isn’t optimal, so now it has its own WLAN products. Clearly there is some product overlap but very little customer overlap so the merger shouldn’t be too disruptive to the business.
This should be a win-win for both organizations but it’s still sad to see the end of the once great company known as Cabletron. The NH tech community just won’t be the same.
Image credit: Wikimedia Commons