Cabletron CEO resigns
Internetworking vendor Cabletron Systems Inc. today announced the resignation of
co-founder and CEO Craig Benson. The company claimed the move was designed to help it
focus on more technology-intensive markets.
Benson, whose resignation is effective immediately, is being replaced by Piyush
Patel, senior vice president of worldwide research and engineering. Patel will also
become chairman of Cabletron's board, while Benson will retain his seat on the board.
Before joining Cabletron, Patel was CEO of Yago Systems Inc., a routing switch start-up
that Cabletron bought in January of last year.
Benson said the time has come for him to step down. "I rejoined Cabletron in 1998 to
bring focus to the company," he said in a prepared statement. "Now that we've reached
this goal, I believe it's time for me to step aside and turn the reins over to someone
who can lead the company into the new millennium."
In an analyst teleconference this morning, Benson said that with Patel's technology
knowledge, he's better suited to do the job. "He can drive this the way no one else
can," Benson said.
Although he intends to maintain the company's commitment to enterprise products such
as LAN switches, Patel said he will focus increasingly on the service provider
equipment market, which he said offers the greatest potential for growth. He also cited
convergence and network management as growth areas.
Asked what an increased focus on the service provider market means to the company's
enterprise customers, Patel said that "one trend we're starting to see" is that these
customers are outsourcing their networks to service providers. He added, "we continue
to focus on the enterprise customer."
Patel is the fourth CEO of Cabletron in the past few years. Co-founder Robert Levine
resigned the post in the fall of 1997 to be replaced by Nynex executive Don Reed, who
lasted less than a year and was replaced by Benson last year. Benson resigned
to "pursue personal interests" but didn't say anything more about what kind of a post
or company he might be looking into.
The Rochester, N.H., vendor was founded in 1983 and made its name in hubs, growing
to $1.4 billion in sales for fiscal year 1998.
"I think it's good for Craig to step aside because he took the position after the
Reed fiasco and failed to execute," said Craig Johnson, president of the PITA Group, a
Portland, Ore., consultancy. "Only time will tell if Patel is the right man for the
job." Further, he said, it's not uncommon for top management to be replaced after a
company reaches the $1 billion mark in sales.
As far as Cabletron's future is concerned, Johnson said that Benson had been averse
to selling the company. So now "the real question" is: "Will the company be put up for
sale or will they really hunker down on the networking business and try to become a
successful player? I don't know the answer," Johnson said.