Compaq sets sights on bid for Cabletron

Networks NetVantage expected to be bought by struggling vendor.

Cabletron was preparing for the acquisition of workgroup switch manufacturer NetVantage last week, amid speculation that the networking vendor is being targeted for takeover by Compaq.

Craig Benson, Cabletron chief executive, indicated in an internal newsletter last week that the company would make an acquisition, but refused to give details.

US sources claimed the NetVantage deal would be announced this week, giving Cabletron access to workgroup switches for the OEM market and competing against products by Cisco, Bay and Intel.

NetVantage was founded in 1991 and went public in 1995. In 1997, it made sales of $16.9 million and a net loss of $18 million.

Cabletron executives declined to give details on Benson's announcement, but analysts believe it faces a bid from Compaq.

Camiel Camps, senior network analyst at IDC Europe, said: 'It would make sense. Compaq missed out on Digital's networking business due to Cabletron buying it.'

In an attempt to expand business, because its core network hardware operations come under competitive pressure, Cabletron will target the Spectrum network management tool at the multivendor market via start-up partner company, Opticom.

Opticom will adapt Spectrum to support other network suppliers' hardware and will sell and support the open version. Set up eight months ago by former Cabletron executive Ed Flannery, Opticom was in discussion with Bay, 3Com and Ascend to develop Spectrum modules that support its products.

But Larry Benson, Opticom VP of sales, refuted claims that the company has closer links to the larger operation than the Spectrum deal. 'There are no hooks between us. There are no financial or management links between Opticom and Cisco,' he said. See analysis, page 24.