Extreme Networks buying Enterasys for US$180 million

Two small network infrastructure companies are coming together to better position themselves against bigger competitors.

Extreme Networks Inc. is buying Enterasys Networks Inc. for US$180 million, in a deal they say will combine their wired and wireless products and technologies to provide customers high performance and open solutions, including the ability to create software defined networks.

“I think that both companies looked at this as an opportunity to better compete by combining resources — especially R&D and engineering talent,” said Bob Laliberte, an industry analyst at the Enterprise Strategy Group. “Clearly they will have to do some rationalization of products but would expect Enterasys’ wireless solutions and Extreme’s data center devices to eventually win out.”

In a statement the two companies said they will continue to support all products.

Enterasys makes the K-series and S-series chassis switches, the 800-series and D-series standalone switches and the identiFi line of Wi-Fi access points and controllers.

Extreme makes the BlackDiamond X-series and 8800 series of chassis-based switches, an extensive line of Summit stackable switches line and the Altitude line of wireless access points.

Extreme expects that within two years its ExtremeXOS network operating system will fully support Enterasys’ hardware.  The operating system has a Linux abstraction layer so it is relatively easy to make it compatible with other hardware, the company said.

“We believe customers will benefit by having a single network operating system that delivers functionality across both product lines and is designed to allow customers to   seamlessly choose which hardware platform best meets their deployment needs,” it said in a statement.

The deal, expected to close later this year, will double Extreme’s revenue. Privately-held

Enterasys, based in New Hampshire, has approximately 900 employees and US$330 million in annual revenues.  CEO Chris Crowell will stay with the merged company.

Enterasys had been a public company but in 2005 went private after being taken over by two private equity firms.

Publicly-traded Extreme Networks [Nasdaq: EXTR] is based in San Jose and had revenue of just under US$300 million and a profit of $9.7 million for the fiscal year ending June 30.

Recently it announced a partnership with Lenovo, which will sell converged server/networking solutions.

For the time being, the channel partners of the two firms won’t be able to sell the others’ products. Eventually the partner programs will be merged.

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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