Extreme Networks Amplifies Its Team

Extreme Networks Amplifies Its Team

By Dave Michels September 13, 2013 Leave a Comment
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Extreme Networks Amplifies Its Team by Dave Michels

This week Siemens Enterprise Communications sold its Enterasys networking division to Extreme Networks. It is an all cash deal valued at $180 million – estimated to be around 55 percent of the unit’s revenue.

It is a fairly strategic deal for Extreme. The company expands its portfolio and R&D, doubles its revenue, expands its channel, and eliminates a competitor. Extreme will pick up 900 employees and some critical technologies in SDN and fabric switching. The announcement was made by Extreme Networks.

Enterasys was born in 1983 as CableTron. In 2000, prior to its IPO, Cabletron changed its name to Enterasys. The Gores Group took the firm private when it acquired Enterasys in 2006. In 2008, Gores entered a joint venture with Siemens AG and created the Siemens Enterprise Communications Group resulting in UC and networking units.

UC and networking together, a one-two punch, positioned Siemens Enterprise Communications to deliver more comprehensives. Evidently, the synergies of the two divisions didn’t live-up to expectations. The two divisions remained largely independent.  

Last June, Siemens Enterprise Group hosted an analyst and consultant event and Enterasys was noticeably missing. The event was focused on OpenScape and the newly previewed Project Ansible. It was a bit strange as several UC vendors are beginning to talk-up UC and Networking with SDN. It was pretty clear that neither Enterasys nor SDN was a priority at the time.

Upon inquiry, I heard the Siemens team said something about a different buyer which was either referring to the different customer footprints of the networking and UC divisions, or the fact Enterasys was secretly for sale.  

The acquisition is clearly good for Extreme, what about Siemens-Enterprise?

It’s probably pretty good for them, too. SDN and UC are still pretty young, but realistically focussing/favoring on Enterasys probably wasn’t that valuable to OpenScape. Now that Siemens-Enterprise is network independent, it must address SDN objectively and via open standards such as OpenFlow and OpenStack. However, Avaya, Cisco, Alcatel-Lucent, Microsoft/HP, and NEC will likely be going to market with integrated UC/network solutions.

The company has a very aggressive roadmap. Siemens can now focus more directly on its Project Ansible vision which includes anywhere workers and efficient collaboration.

It also creates an opportunity for simplified messaging around UC, or potentially even beyond “traditional” UC. This could explain the long delay between Siemens announcing its intent to rebrand and the actual new brand. Typically, once a firm decides to rebrand, it does so quickly to minimize additional confusion during the interim. Siemens-Enterprise announced in June its intent to change its name in October. Perhaps this explains what seems like a low sale price for Enterasys; perhaps Siemens-Enterprise was up against a timetable where it loses rights to the Siemens name.

Regardless of motivation, it will be interesting to watch what becomes of Siemens-Enterprise. Next month a new brand – and soon the release of Project Ansible. Siemens-Enterprise will be a radically different company a year from today.

 

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