Is Woven Systems Coming Unraveled?

Now that Force10 Networks Inc. has found its exit -- merging with Turin Networks Inc. -- what's in the cards for 10-Gbit/s Ethernet rival Woven Systems Inc. ?

The world might find out soon. One source tells Light Reading that Woven is in a do-or-die hunt for funding and that it could shut down quickly if no deal emerges. Another source, close to the company, says Woven has informed its employees they will only be on the payroll until Friday.

Woven CEO Jeff Thermond declined to comment when contacted by Light Reading yesterday.

Aside from the obvious money pressures (you know, that whole recession thing), Woven is facing increased competition from the other vendors in the Ethernet camp. Force10, for example, is preparing a higher-density push with its ExaScale product line, announced in March. (See Force10 Thinks 'Exa'.)

Life's no picnic for Force10, either. Anyone shipping data center switches has to contend with Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR), which are pitching architectures that, respectively, put the Nexus and the mysterious "Stratus" at the data center core. (See Cisco Intros Unified Service Delivery, Cisco Dreams of Data Center Unity, Juniper Strikes at the Data Center, and Juniper Storms Into Ethernet Switching.)

Other competitors include Brocade Communications Systems Inc. (Nasdaq: BRCD), now that it has acquired Foundry Networks, and Extreme Networks Inc. (Nasdaq: EXTR). (See Brocade Takes Aim at Cisco (& Juniper).)

Even Nortel Networks Ltd. is upping its data center game, with the Virtual Services Platform (VSP) 9000 announced yesterday, although it won't ship until next year.

Woven, founded in 2003, had raised $35 million as of 2007, from investors including Goldman Sachs & Co. , Palomar Ventures , and Mohr Davidow Ventures .

By contrast, Force10 -- which grew up in a more extravagant era for tech startups -- raised at least $400 million. After years of IPO speculation, the company announced the Turin deal in January. (See Force10 Networks Inc. and Force10, Turin Play Convergence Card.)

Woven's EFX 1000 came out in 2007, sporting 144 nonblocking 10-Gbit/s Ethernet ports in a box 10 rack-units high. Multiple chassis can be meshed together to form an even bigger fabric. (See Woven Weaves 10-Gig.)

Woven talks a good technology story, but with companies like Cisco trying to absorb more of the data center, it's difficult for a relative newcomer to get a spot in the network, says Ray Mota, an analyst with Synergy Research Group Inc. (Mota, by the way, was just commenting on market conditions; he had heard nothing about Woven being in trouble.)

"If I was them, I would be looking for an IBM Corp. (NYSE: IBM) or an Electronic Data Systems Corp. (EDS) (NYSE: EDS)" as a business partner, and a large company like Alcatel-Lucent (NYSE: ALU) as a technology partner, Mota says. "You've got to get the army out." Mota expects the larger, established players to have the upper hand when it comes to big data centers. Woven might be better suited pursuing small to mid-sized jobs, he says -- "but I think they want to compete with the big guys."

— Craig Matsumoto, West Coast Editor, Light Reading

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alandal 12/5/2012 | 4:04:21 PM
re: Is Woven Systems Coming Unraveled?

Know any one to pick up pieces?

Pete Baldwin 12/5/2012 | 4:04:21 PM
re: Is Woven Systems Coming Unraveled?

It's looking pretty definite that they're closed down -- we're getting told it became official yesterday morning.

askjeevs 12/5/2012 | 4:04:20 PM
re: Is Woven Systems Coming Unraveled?

Yes they turned off the lights yesterday... Its quite a regular thing CEO doesn't want to comment.

 It will take another couple of months for the pieces to be picked up...



Switch Guy 12/5/2012 | 4:04:19 PM
re: Is Woven Systems Coming Unraveled?

Other than the questionable VSCALE, what pieces are left to pick up?

Woven didn't build their own silicon, nor did they write their own software (porting the LVL7 stack doesn't count!), or have a huge installed base/list of customers...

Oh, and their hardware/system/chassis design was pretty mediocre, too. Just look at the pictures of the EFX-1000 on their website (especially the rear view). They claimed to have "front-to-back" airflow... I guess technically, that's true: there is an air intake vent on the front right of their chassis, and then air flows across the cards, and then out the back... puhleaze...


BTW, Craig, the EFX-1000 was announced in May 2007, not 2005, as your article states.


Sooo... any bets on when Force10 folds? The merger of Force10 and Turin tried to create a startup "too big to fail"

bollocks187 12/5/2012 | 4:04:17 PM
re: Is Woven Systems Coming Unraveled?

Woven sales got hit by the financing sector downturn. They also expand too quickly with headcount that was not jiustified. Senior management decisions or lack of decision making contributed significantly to their demise. It is sad to see another vendor go down the tubes - but a lesson to be learned by employees and investors.  Too many start ups have leaderhsip that have far too much "politician leadership styles " which never result in a  succesful outcome.



As for FORCE10 they needed the monies badly or else they would have gone away. Turin saving them might result in a boat anchor to heavy to bear.  Once again the same leasson to be learnt they have a "management team" and a "leadership approach" that that has not not delivered anything to the industry simply read the bios its a lot of hot air. 

They are simply playing out events like  Govt.  "Politicians"... no change agents, nobody trying to make the company succesfull, just hiding and pointing fingers, and of course getting millions in stock and a fat check :-).

Employees and VC beware or false leaders !



askjeevs 12/5/2012 | 4:04:16 PM
re: Is Woven Systems Coming Unraveled?

BTW, Craig, the EFX-1000 was announced in May 2007, not 2005, as your article states.

Infact the company didn't get funded(tier 1 VCs) until 2006 and they released the product in 2007. The product is mediocre and no differentiator , other than trying to pitch price/performance.


          That pitch only works if you have a great marketing and sales and you need to be a big brand, not as a startup.


       Ofcourse releasing a ethernet switch from scratch in short time is a decent achievement, but who needs it ? The same product in a crowded environment.

Pete Baldwin 12/5/2012 | 4:04:15 PM
re: Is Woven Systems Coming Unraveled?

Thanks for the clarification, guys.  Yes, the product came out in 2007; 2005 is when the *company* was introduced to us.


Correcting the story now.

okekai 12/5/2012 | 4:03:32 PM
re: Is Woven Systems Coming Unraveled?

If this is the case and Woven has gone belly up,  how will the vScale packet processor continue unless brocade or another silicon vendor acquires the IP and continues development and support.

chalon 12/5/2012 | 4:03:32 PM
re: Is Woven Systems Coming Unraveled?

Did Woven OEM or sell it's TRX200 to Brocade?  I just saw Brocade's website which shows it's new Turbo Iron 24X switch which many characteristics read exactly like the Woven TRX200.  The latency's are both 1.5usec putting a bump ahead of the Fulcrum for vScale it that is the case.  If this is true, this is how Brocade will work out their L2 multipathing strategy for DC.

Brocade TurboIron 24X

Woven TRX200

chalon 12/5/2012 | 4:03:24 PM
re: Is Woven Systems Coming Unraveled?

The vScale Asic could easily continue to be manufactured as it was created by Arrow Electronics Custom Logic Solutions group.  Not in-house by Woven themselves even though it is a proprietary multi-pathing technology.  But considering that new Brocade switch is called a "Net Iron" product.  It must have been an OEM between Woven and Foundry prior to the Brocade acquisition.  Brocade now competes against the Arista 7124S, BNT G8124, and the Juniper EX2524 all basically being the same switch.

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