Cabletron pledges to stay in channel

Networking Buyout of Digital division will not affect sales policy.

Cabletron has reassured the industry that it will continue to use the channel, in spite of recent direct sales following its acquisition of Digital's networking product division.

As predicted in PC Dealer (26 November), Cabletron acquired the division for a total of $430 million in cash, stock and product credits. Cabletron retains up to 60 per cent of its business through direct sales.

Nick Gosshawk, marketing manager of the acquired division, said: 'Only Cabletron's direct outsource operation can sell Digital products but this must be done in conjunction with an accredited reseller.'

He added: 'Cabletron had a bad reputation with the channel but its chairman and CEO Don Reed has said that is the old company image.'

Joe Solari, VP of international operations at Cabletron, commented that the vendor was hoping to increase its UK channel reliance to 100 per cent.

But, he said: 'We have a 90 per cent strategy with the channel in Europe but this has been slower in the UK.'

'I have been trying to fix the negative perception we have had with the channel,' he added.

Under the terms of the Digital purchase, Cabletron resellers will have access to Digital products, which should increase sales, and all products will be jointly branded under both company names.

Commenting on the acquisition, Gosshawk said: 'I understand that partners have been unhappy with the brand recognition of Digital's networking products.

This will help to address the matter.'

However, he revealed that while certain Digital products would be available to resellers, Digital would only resell Cabletron's SmartSwitch products.

Cabletron US has been hit by a lawsuit alleging fraud and deceptive business practices. The lawsuit stated that Cabletron allowed certain defendants to sell stock at artificially inflated prices.