Ethernet vendors Turin Networks and Force10 Networks said Jan. 5 they are merging their operations in what is widely viewed as a defensive maneuver in tough economic times.
Turin President and CEO Henry Wasik will become the president and CEO of the combined entity, while current Force10 Networks President and CEO James Hanley will assume the role of president, field operations, with responsibility for sales, marketing, services and business development.
Pending the completion of legal and regulatory filings, the merger should be finalized by March. The new combined entity company will be headquartered in San Jose, Calif., with sales offices worldwide and research centers in Chennai, India, and Shanghai, China. Terms of the transaction were not disclosed.
Turin, based in Petaluma, Calif., which focuses on the carrier Ethernet, wireless backhaul and converged access equipment markets, claims its solutions have been deployed by more than 600 customers worldwide, including the top five wireless network operators in the United States, as well as 11 of the top 17 broadband Internet providers. According to the Dell'Oro Group, Force10 Networks has the industry's second highest revenue share for total 10 Gigabit Ethernet networks.
"Strategically, the merged company will be the only private networking company that is a leading player in three of the fastest growing segments of the networking market," Wasik said in a statement. "High capacity system architecture and reliable modular software are essential for the next-generation data center, and we see similar requirements to facilitate the transition from legacy networks to a more cost-effective, packet-optimized infrastructure for wireless backhaul and metro Ethernet service delivery."
Industry analyst firm IDC projects 2 million 10 Gigabit Ethernet ports will be deployed in data centers worldwide next year, while data center Ethernet switching revenue will grow at 8 percent annually to reach $6.4 billion in 2012. Industry analyst firm Ovum RHK expects the market for pseudowire and Ethernet backhaul transport equipment to grow by more than a factor of 10 by 2012, reaching more than $5 billion in 2012.
"This merger creates both operational efficiencies and market focus in two high-growth, high-performance networking segments," Hanley said. "The new company will also be positioned over time to deliver innovative new product solutions through the integration of Turin Networks' wireless backhaul, metro service edge and converged access products and Force10 Networks' access switches."