Extreme Hatches Switch Surprise
The company is expected to make an official announcement of its 802.11 wireless LAN products in late April or early May, around the time of the NetWorld+Interop trade show in Las Vegas. That event is expected to provide a venue for a blizzard of 802.11 announcements from startup vendors, including Airespace Inc., Aruba Networks Inc., Trapeze Networks Inc. and Vivato Inc., among others.
Extreme’s wireless products are being developed by a "stealth department" within the company. Even other employees at Extreme have been kept in the dark about its activities, sources say.
The department is being headed by one Vipin Jain. Although not listed on Extreme’s Website or in its directory, Jain has been working in stealth mode as VP and general manager for Extreme’s "LAN Access Business" for over a year, Unstrung has learned. Prior to that, he was cofounder of Telseon Inc., an ill-fated metro Ethernet service provider (see OnFiber Takes Over Telseon).
Jain also is a well-known Institute of Electrical and Electronics Engineers Inc. (IEEE) maven and inventor of the IEEE 802.1x authentication protocol used in wireline and wireless Ethernet networks. He could not be reached for comment on this article.
Details of Extreme’s 802.11 wireless product are fuzzy, but most sources agree that it is an 802.11 "switch" – basically, an Ethernet hub or switch that can be used to link up, manage, and apply security and QOS policies to wireless LAN access points sprinkled across an enterprise. (For more on the debate over what exactly comprises a wireless LAN switch, see Vivato's Switch Bitch.) Extreme’s product "emphasizes security and management," says one source close the company.
Extreme is not the only incumbent systems vendor moving into the crowded 802.11 space, which is both big (see WLAN Worth $1.6B in 2002) and busy (see WLAN Switch Shakeout Looms?). This week Nortel Networks Corp. announced a "security switch," which is expected to ship in June (see Nortel Preps 'Security Switch'). Cisco Systems Inc. (Nasdaq: CSCO) has not announced any plans for a WLAN switch, but observers reckon it's only a matter of time (see Cisco’s LAN Switch: Build or Buy?). Cisco has also invested in a WLAN switch startup called Bandspeed Inc., which is working on technology that enhances the range of 802.11 radios (see Startups Add to Switch Mix).
“I think that longer-term it makes sense for the incumbent switch vendors to... converge wireless and wireline switching,” says Chris Kozup, senior research analyst for global networking strategies at Meta Group Inc.. “It puts them in a better position to win overall. If I’m an IT network manager, I’m sure I’d rather go with an incumbent than a startup who’s not necessarily tried or true in my environment.”
But the trend Extreme is joining is bad news for smaller 802.11 outfits. Incumbent players entering the market have two significant advantages over startups. First, on the business side, they can sell through existing channels and to an installed customer base. Second, on the technology side, they have spent years developing management capabilities. Startups are working from scratch in both regards.
The management angle is particularly important. Part of the 802.11 switch startups' pitch is that they make management simpler by allowing access points to be administered from a single location. But what if the 802.11 switch can’t be managed by the same console that a company uses for the rest of its equipment? Network managers could end up with YAMC (yet another management console) – something of a bitter irony. Buying an 802.11 switch from an incumbent vendor eliminates this risk, because it can be managed using the same console already installed to deal with the vendor's other gear. The incumbent's 802.11 manager is then JANN (just another network node).
In addition to developing a wireless LAN offering, sources say Extreme is also working on new high-speed Ethernet products designed for installation at the core of enterprise and service provider networks. Even fewer details are available on the core products than on the 802.11 offering, and sources had no information about an availability date.
But indications are that Extreme is working not only on a new 10-Gbit/s Ethernet platform, but also a 40-Gbit/s solution. Given that there is currently no standard for 40-Gbit/s Ethernet, it's likely Extreme's new gear will invoke some inverse multiplexing smarts to combine four 10-Gbit/s Ethernet connections into what would be, for now, the ultimate in fat pipes.
Extreme's core developments are clearly part of a strategy to leapfrog its competitors, which are currently fighting it out for 10-Gbit/s Ethernet business. Extreme is facing increasingly bold competition from Cisco and Foundry in the 10-Gbit/s market -– which has of late seen several significant new product announcements, as well as rampant price cutting (see Cisco Takes On 10 GigE Competition and Force10 Slashes 10-GigE Pricing). Riverstone Networks Inc. (Nasdaq: RSTN) is expected to make its own 10-Gbit/s announcement Monday, so keep an eye out.
At least one analyst says she's not surprised to see Extreme eyeing the high-speed core switch market, but predicts challenges. "Demand for bandwidth is not going away, but we won't see much activity [in 40-gig] until the service providers shake themselves out," says Deb Mielke, managing director of Treillage Network Strategies Inc., a consultancy. She doesn't think that will happen until at least the middle of 2004.
Mielke says Extreme's position as an incumbent systems vendor may not help it in the core switch market -- at least among service providers, many of whom still view Extreme as an enterprise play despite its carrier contracts. Indeed, she thinks Extreme risks competition from emerging core startups promising 40-Gbit/s wares, such as PhotonEx Corp. (Providing, of course, the startups survive long enough to compete – see What's Cookin' at Core Startups?)
Extreme could use the financial and market share boosts that sales of new 802.11 and 10/40-Gbit/s technologies would provide. It recently has reported slower demand and falling revenue from sales of its enterprise products, and it’s rumored to be getting set to terminate its content switch line after poor sales (see In Search of... Enterprise Rebound and Extreme to Dump Layer 4-7 Switching?). Expanding its product lines outward (to the edge of enterprise networks) and inward (to the core of enterprise and service provider networks) gives it two ways in which to rally.
— Dan Jones, Senior Editor, Unstrung and Mary Jander, Senior Editor, Light Reading