Enterasys Taps Tenor Assets
Today, the company announced that it has acquired the intellectual property of Tenor Networks, a startup once focused on building a Multiprotocol Label Switching (MPLS) box for the service provider core. Tenor officially shut down at the end of February (see Tenor Goes Silent).
The company also announced it would be adding two of Tenor’s founders to its management roster and is actively recruiting many more from the Tenor team. Leon K. Woo, founder and CTO of Tenor, has joined Enterasys as executive vice president of engineering. And Robert Ryan, founder and VP of research and development, will head Enterasys's advanced core routing group.
This acquisition, coupled with the addition of Woo and Ryan, is a clear indication that Enterasys is beefing up its IP routing resources, in particular its MPLS capabilities. But the big question is: What does it intend to do with these new capabilities? The company still claims it’s focused on the enterprise market. But Tenor’s software and hardware were designed to sit in the service provider network. More recently, the startup had changed its focus, and it was in the midst of developing a metro Ethernet product to provide virtual private LAN service.
Some people in the industry speculate that these assets could allow Enterasys to join a large group of switching equipment providers targeting the service-provider network. Other Ethernet switching players that have been dabbling in the service provider edge include: Cisco Systems Inc. (Nasdaq: CSCO), Extreme Networks Inc. (Nasdaq: EXTR), Foundry Networks Inc. (Nasdaq: FDRY), and Riverstone Networks Inc. (Nasdaq: RSTN).
While Enterasys denies having designs on the service provider market, it may be gearing up for larger companies that are building their own metro networks.
“We are absolutely focused on the enterprise networking segment,” says John Roese, CTO of Enterasys. “We have no intention of going after service provider business. But some of our larger customers build their own metro networks, and with the Tenor technology we will have a leg up over our competitors.”
Roese says he doesn’t see many enterprise customers needing MPLS anytime soon, but he says that eventually these larger customers will want to deploy it. He says Enterasys was impressed with Tenor’s architecture, especially the programmability of the platform.
“If they truly want to compete for high-end enterprise and/or eventually expand into the service provider edge, they need a high-end router capability,” says Alex Henderson, an analyst with Salomon Smith Barney. “To date they have lacked this offering.”
While Enterasys will clearly be going after Cisco, Extreme, and Foundry with this new strategy, the strangest twist is that it will be pitting itself against its former relative, Cabletron Systems Inc. (NYSE: CS) spinoff Riverstone. Back in 2000, Cabletron split the company up into different pieces, forming Enterasys and Riverstone (see Cabletron Floats Riverstone ). Enterasys has been focused on the enterprise, while Riverstone has, until recently, been exclusively focused on the service provider market. The idea behind the split was that the Cabletron products would do better if separate companies were formed to develop and market them.
Slowly, the two companies have been encroaching on each other’s territories, and their offerings are overlapping in many ways. Riverstone has recently announced a 10-Gbit/s Layer 2/3 switching platform, which competes head-to-head with Enterasys’s switching products (see Riverstone Fuels 10GigE Price War). Riverstone has also shifted its sales strategy to go after enterprise customers that are building their own metro networks. These are the same customers Enterasys hopes to address with the addition of the Tenor technology.
But Roese insists that the two companies will retain their focuses on their core businesses.
“Riverstone is definitely a metro provider, but it has drifted into the enterprise,” says Roese. “And we are an enterprise company that is addressing some service provider-like applications. If you look at our sales channels and expertise that is still clear.”
— Marguerite Reardon, Senior Editor, Light Reading