Force10 Networks Inc. and Turin Networks Inc. don't seem the most obvious pairing, but the companies argue they're preparing for a market where data center and service provider needs are going to overlap more and more.

The pair announced their merger agreement yesterday: Turin chief executive Henry Wasik will be CEO of the combined company, which will carry the Force10 name. (See Force10, Turin to Merge.)

It could be considered an anticlimactic turn for Force10, which raised more than $400 million and spent years on the IPO radar. (See Force10 Round Hits $113M , LR Reshuffles Private Companies List, and Force10 Networks Inc.)

But Force10's current CEO, James Hanley, says the company isn't going into this deal out of desperation. Force10 set a 2008 target of 30 percent revenue growth and got 90 percent of the way there, he notes.

Hanley also says the companies' combined non-GAAP revenues will exceed $200 million a year, well north of estimates from Zoominfo and other sources.

Turin, meanwhile, is coming out of a multiyear turnaround process, focusing on a few areas including carrier Ethernet, converged access, and wireless backhaul. (See Turin Turns Up the Volume.)

Backhaul, in particular, has potential for Force10, Wasik says, because the increased wireless speeds that come with enhanced 3G, such as high speed packet access (HSPA), and so-called 4G technologies, such as Long Term Evolution (LTE), will up the ante for the required Ethernet capabilities.

"Even though LTE may be out a ways, when the carriers look at your portfolio, it's a harder story for me to sell" without that big-iron Ethernet, Wasik says.

Even so, the merger looks defensive, considering ongoing consolidation in the industry and the fact that the companies have been serving different markets. Force10's equipment is built to be carrier grade, but it's best known for its work in data center and supercomputing environments. Turin has always targeted service providers.

The companies' executives don't consider themselves to be playing defense, though. As with the merger of Brocade Communications Systems Inc. (Nasdaq: BRCD) and Foundry Networks Inc. (Nasdaq: FDRY), albeit on a smaller scale, they expect their respective markets to converge. (See Brocade Takes Aim at Cisco (& Juniper).)

Large data centers -- Google (Nasdaq: GOOG) types -- are having to be built with the kind of reliability found in carrier networks, while service providers are beginning to look at hosted data centers as a possible revenue-generating service. "This sets us up for that long-term trend," Hanley says.

This also means Force10 and Turin expect to keep two sales forces -- one for the enterprise/data center world, and another to face service providers.

Layoffs are still inevitable, though. Not all 900 combined employees would be retained after the merger, Hanley and Wasik admit.

By getting pulled into Force10's world, Turin would be setting itself up against some big-name competition. Brocade, Juniper Networks Inc. (NYSE: JNPR), and, of course, Cisco Systems Inc. (Nasdaq: CSCO) are all putting heavy resources into new data center products and initiatives. (See Juniper Storms Into Ethernet Switching and Cisco's Nexus Targets Data Center's Future.)

Force10 has also had to contend with competition from Woven Systems Inc. and from newer entry Arista Networks Inc. , a company that includes former Cisco and Sun Microsystems Inc. executives Jayshree Ullal and Andy Bechtolsheim. (See Woven Weaves 10-Gig and Ullal Lands in the Cloud.) Hanley contends that Force10 has shown it "can compete very well" against the big guns, particularly Cisco. "We also have a next-generation product in the works similar to their Nexus announcement," he says.

Hanley also says the company has more plans in the area of virtualization, which is the hottest thing in data centers these days. (See Force10 Gets a View.)

— Craig Matsumoto, West Coast Editor, Light Reading