Cabletron and Compaq Enhance and Refocus Relationship; Compaq To Make Equity Investment in Cabletron's Spectrum Business Unit - Company Business and Marketing

Cambridge Telcom Report, Sept 27, 1999

Cabletron Systems Tuesday announced that it has reached preliminary agreement with Compaq to enhance and refocus its networking partnership.

Cabletron and Compaq will pursue a joint initiative focusing on Cabletron's SPECTRUM network management products and services. Supporting this initiative, Compaq has agreed to make an equity investment in Cabletron's SPECTRUM business and to make a multi-year purchase of SPECTRUM products and services.

"We are extremely excited to have Compaq as a SPECTRUM partner," said Mike Skubisz, President of the SPECTRUM Business. "They bring worldwide reach, and an extensive professional services organization to the table. We are looking forward to working with them."

Further, Cabletron and Compaq have agreed to modify their existing relationship to more effectively serve their customers. As part of this relationship, Cabletron and Compaq have agreed to replace the existing agreements between the two companies, including all pre-existing purchase and other obligations, with agreements reflecting their new relationship.

Under the new agreements, Compaq will continue to purchase Cabletron product for internal use, and for resale by Compaq's Professional Services (formerly NSIS). These products will carry the Cabletron brand as Compaq has decided not to introduce a Compaq-branded version of Cabletron networking equipment. Sale of the Digital-branded networking product line will also continue; it is expected that customers will transition their purchases of Digital-branded networking products to Cabletron and its resellers rather than through Compaq.

"Cabletron has historically been one of our strongest networking technology partners," said William "BJ" Johnson, Compaq vice president and general manager, NonStop eBusiness Solutions Division, "and we expect it to remain so as we move forward with our next-generation enterprise solutions."

Cabletron Systems, a premier provider of world-class networking solutions, delivers reliable network access and communications to millions of people worldwide. With scaleable products designed for Global 1000 enterprise networks, service providers and small businesses, Cabletron is the e-business communications specialist in the Internet economy. Listed on the New York Stock Exchange for more than a decade under the symbol CS, Cabletron is an S&P 500 index company.Cabletron's web site can be reached on the Internet at http://www.cabletron.com.