Cabletron Systems

» see cabletron.com as it lived, on the wayback machine

~ the last words ~

Cabletron started in 1983 in a Massachusetts garage and ended as the company that could not grow past $1.4 billion. The first real product was an Ethernet transceiver with diagnostic lights on it, the ST-500, which sounds like nothing until you remember what 10BASE5 was: a thick yellow coaxial run with vampire taps punched into it, where one bad tap took down the whole segment and nothing on the network would tell you which tap it was. Cabletron sold the box that told you.

From there it built the MMAC, a modular hub you could fill with 24 and then 48 ports to a slot, and priced the cost per port down to where a whole office could go on twisted pair. By 1996 it was past a billion dollars in sales. Its routing story was stranger: it partnered with Cisco first, so that a Cisco router card could sit inside a Cabletron hub, and then went and built its own. Holding the price line at the cheap end while funding high-end routing meant running two businesses off one balance sheet.

In February 2000 it announced it would become a holding company over four operating subsidiaries, and on 6 August 2001 that plan finished. Riverstone Networks was spun out to shareholders at about 0.51 Riverstone shares per Cabletron share, roughly 99.2 million shares distributed in total, and the parent renamed itself Enterasys Networks and took the NYSE ticker ETS. The 8-K filed that day is signed by Enterasys and explains, in its first sentence, that it used to be Cabletron.

~ the record ~

~ one point four billion, four times ~

The selected financial data in the last annual report filed under the Cabletron name is the whole story in five columns. Net revenues were $1,406.6 million in the year to February 1997, then $1,377.3 million, then $1,411.3 million, then $1,459.6 million to February 2000, and then $1,071.5 million in the year the company stopped existing. That is four years of a company standing still, and then a fall of more than a quarter in the last one.

The profit line underneath is worse. Fiscal 1997 produced $326.3 million of operating income. Every year after that is a loss from operations, down to $198.2 million lost in the final year, and the net figure for that year, once $541 million of other losses had gone through, was a loss of $606 million. The 1999 and 1998 years each carried more than $200 million of special charges, which is the accounting for a company reorganizing itself over and over while sales hold flat.

~ four companies out of one ~

The four pieces went four ways and none of them is alive under its own name. Riverstone, the metro Ethernet half, was sold to Lucent and found itself redundant once Lucent merged with Alcatel. It finished in Chapter 11 and was liquidated. Aprisma held SPECTRUM, the network management suite the company had built for its own hubs, and was sold on to Concord Communications, which Computer Associates then bought for $350 million. Global Network Technology Services, the installation arm with more than 800 people in Texas, was dissolved inside 2001 as demand for network services collapsed.

Enterasys itself, the part that was the original Cabletron, was taken private by the Gores Group in 2006, merged with Siemens Enterprise Communications in 2008, and sold to Extreme Networks for $180 million in September 2013, against the $1.4 billion a year the business had once taken in. Both old domains land on Extreme's homepage now, cabletron.com and enterasys.com alike, two dead names pointing at the same live one.

~ the garage and the governor ~

Craig Benson, who co-founded the company and ran it, was elected Governor of New Hampshire in 2002 and served a term. That detail is usually told as trivia and it is worth more than that. Rochester is a small New Hampshire city and Cabletron at its height employed 6,600 people there, making equipment that almost none of its neighbors would ever see working.

That is the reason this one leaves so little behind. Everything Cabletron built lived in locked rooms, on racks, behind doors marked no entry, and the people who met it met it at work. A consumer brand that size would leave twenty years of objects in attics and photographs of shop fronts. Six thousand six hundred people made hubs for a decade and the surviving trace is a redirect and a stack of filings.

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