Upcoming Events

Where the Cloud Touches Down: Simplifying Data Center Infrastructure Management

Thursday, July 25, 2013
10:00 AM PT/1:00 PM ET

In most data centers, DCIM rests on a shaky foundation of manual record keeping and scattered documentation. OpManager replaces data center documentation with a single repository for data, QRCodes for asset tracking, accurate 3D mapping of asset locations, and a configuration management database (CMDB). In this webcast, sponsored by ManageEngine, you will see how a real-world datacenter mapping stored in racktables gets imported into OpManager, which then provides a 3D visualization of where assets actually are. You'll also see how the QR Code generator helps you make the link between real assets and the monitoring world, and how the layered CMDB provides a single point of view for all your configuration data.

Register Now!

A Network Computing Webinar:
SDN First Steps

Thursday, August 8, 2013
11:00 AM PT / 2:00 PM ET

This webinar will help attendees understand the overall concept of SDN and its benefits, describe the different conceptual approaches to SDN, and examine the various technologies, both proprietary and open source, that are emerging. It will also help users decide whether SDN makes sense in their environment, and outline the first steps IT can take for testing SDN technologies.

Register Now!

More Events »

Subscribe to Newsletter

  • Keep up with all of the latest news and analysis on the fast-moving IT industry with Network Computing newsletters.
Sign Up

Extreme Networks Buys Enterasys For $180 Million

Extreme Networks said on Thursday that it's acquiring Enterasys Networks. The deal, in which Extreme is acquiring all outstanding shares of Enterasys for $180 million in cash, appears to be intended to extend both companies’ viability in a market dominated by Cisco and Hewlett-Packard.

“The combination brings together two leaders and long-time players in the Ethernet networking space,” Extreme CEO Chuck Berger said during a conference call with analysts and media. “We will be the largest company focused on Ethernet switching.”

More Insights

Webcasts

More >>

White Papers

More >>

Reports

More >>

Meanwhile, Chris Crowell, CEO of Enterasys, was more direct: “Scale matters in this business.”

By effectively doubling in size, the new Extreme will now find itself fighting with Dell and Juniper for the third, fourth and fifth spots in a market led by Cisco Systems and HP, Mark Fabbi, a distinguished analyst with Gartner, said in an email interview.

Fabbi said the acquisition increases both companies’ odds of survival in a market in which they had been fringe players.

“Without doing something, I could only see a long, slow death spiral as they slowly lost customers and the ability to innovate,” he said. “And it would be a very slow death as both players still had basic financial viability and access to cash.”

Extreme reported a net profit of $16.2 million on revenue of $299.3 million during the fiscal year ended June 30, down from a net profit of $21.7 million on revenue of $322.7 million the previous year. The company reported cash and investments worth $205 million.

Enterasys, which is a private company and thus has not reported profit or cash reserves, claims $330 in annual revenue. It employs about 900 people, compared with 750 at Extreme.

[ Read how Cisco's acquisition of solid-state array vendor Whiptail edges it closer to becoming a one-stop IT shop for the enterprise in "Cisco Buys Whiptail, Plants Flag in New Territory."]

Fabbi said Extreme should benefit from adding Enterasys’ wireless and network management technologies, while the combined companies will also be able to improve their operating margins by eliminating redundant administrative functions such as HR and finance.

Enterasys' customers include the Philadelphia Eagles, which recently rolled out Wi-Fi at Lincoln Financial Field.

Berger told those on the conference call that there was another important motivation for the deal: tapping into Enterasys’ established infrastructure for demand and lead generation, an area in which he acknowledged Extreme has been lacking.

“It would take us years and significant expense to get to this level of sophistication and effectiveness,” said Berger. Despite the clear advantages the deal provides for Extreme, Fabbi said the company still faces an uncertain future in a market that’s hardly bursting.

“The campus switch market is at best flat, and, like other legacy businesses, will be prone to price erosion over time,” he said. “While having Cisco selling at premium prices helps the small players maintain margin, it’s inevitable that prices and likely margins will come down.”

But Berger said Extreme’s customers should feel more confident in the company’s future--and in the continued value of their Ethernet switching investments--as a result of the acquisition.

“We will support the full product roadmap of each company going forward,” he said."

Executive promises aside, Mike Fratto, principal analyst at Current Analysis, said via email that it will take time to put Enterasys' devoted client base at ease.

"Learning a new product will take time and training," said Fratto. "Enterasys customers should get a clear understanding of the roadmap once the deal closes."

[Get deep insight into the technology foundation of the data center network for the next decade in Greg Ferro's workshop "Building Your Network For the Next 10 Years" at Interop New York Sept. 30-Oct. 4. Register today!]


Related Reading


Network Computing encourages readers to engage in spirited, healthy debate, including taking us to task. However, Network Computing moderates all comments posted to our site, and reserves the right to modify or remove any content that it determines to be derogatory, offensive, inflammatory, vulgar, irrelevant/off-topic, racist or obvious marketing/SPAM. Network Computing further reserves the right to disable the profile of any commenter participating in said activities.

 
Disqus Tips To upload an avatar photo, first complete your Disqus profile. | Please read our commenting policy.
 
Vendor Comparisons
Network Computing’s Vendor Comparisons provide extensive details on products and services, including downloadable feature matrices. Our categories include:

Research and Reports

Network Computing: April 2013



TechWeb Careers