Strategic Partners or Merger on the Horizon?
Duhaime -May 8, 2000
In March 3Com Corporation and Extreme Networks announced they would be
entering into a strategic alliance for all existing 3Com customers to
migrate away from the now debunked CoreBuilder 9000 to the more robust
BlackDiamond 6800. For existing 3Com customers, this migration path will
not only allow them to obtain up to a 70 percent discount on a new BlackDiamond
chassis, but also to enhance their current core network.
with the migration path that is being offered to existing 3Com customers,
Extreme is bringing on board more than 200 sales, engineering, and marketing
personnel from 3Com. In many cases, this will mean that existing 3Com
customers will actually see no change in their existing account team.
The only major change will be that they will now be selling an enhanced
Enterprise switching product.
The exit of 3Com from the Enterprise marketplace will create a void in
the Tier 1 vendor market that no vendor can currently fill. In essence,
the enterprise market is narrowing from three vendors to two - Cisco and
though Extreme offers a full range of Layer 3 switching devices, it has
no WAN routing products, and is not ready to step into the void created
by 3Com. However, we still expect Extreme to increase their market share
in the switching space. With the migration plan Extreme has outlined for
existing 3Com customers, we believe Extreme is well positioned to become
the number one vendor in Layer 3 ports shipped in 2000.
feel that the combination of Extreme's migration plan with the addition
of 200 qualified sales, engineering, and marketing personnel from 3Com
should allow it to retain a minimum of 60% of 3Com's customer base. This
will more than likely be a rapid growth spurt, as Extreme's discount program
has an end date of September 2000, but one that we believe has staying
Another benefit that users should factor into their decision is the interoperability
testing that the two companies have performed to ensure all existing features
function properly on both platforms. This will cut down on the learning
curve for Network Engineers on the new platform.
If you are a network manager faced with telling your boss that your network
backbone is obsolete and no longer supported, but the core can be replaced
with something that's 60% faster for less than $30,000.00 USD, most CIO's
will jump right on board. This will be just one of the enhancements that
can be leveraged compared to the existing CoreBuilder.
migration plan that Extreme Networking is offering is 70% off list price
for a BlackDiamond 6800 that is comparably sized to your existing CoreBuilder
9000. While all of the vendors in this space are offering similar plans,
none can match this offer. With the combination of Extreme's technology
enhancements and migration plan, all of the other vendors fall short.
only remaining question we at TechnologyEvaluation.com have is: Is this
a strategic partnership or the beginnings of a merger between the two