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Optical/IP

Trapeze's Partner Mania

Wireless LAN switch startup Trapeze Networks Inc. has wrapped up yet another enterprise OEM deal, this time with wired networking player Enterasys Networks Inc. (NYSE: ETS).

This is the startup's third large enterprise OEM partner: As well as Enterasys, Nortel Networks Ltd. (NYSE/Toronto: NT) and 3Com Corp. (Nasdaq: COMS) are offering customers some or all of the Trapeze product line. The firm also recently announced that D-Link Systems Inc. will use Trapeze technology to develop a switch for the small to medium-sized business market.

So what's with all the deals?

"We see several opportunities with partners to expand distribution either geographically or within a particular vertical," a company spokeswoman writes in an email to Unstrung. "What you’ll see next are joint development efforts where the system vendors take our software and use it in their platforms -- so we can integrate wired and wireless by embedding WLAN software in partner devices."

And -- seemingly untroubled by the notion of having too many partners to service -- Trapeze says that more are in the pipeline.

"There are several more partnerships in the works... Going forward we are going to diversify even more with partners -- going after partners that have expertise with a particular application."

Of course, Nortel used to partner with Airespace, before that particular switch startup was bought by Cisco Systems Inc. (Nasdaq: CSCO). And some may see echoes of Airespace's approach in Trapeze's current zeal for new partners.

Craig Mathias, principal at the Farpoint Group thinks that acquisition is certainly one potential outcome for Trapeze.

"It makes a lot of sense," he says. "It's certainly a lot easier than going public right now."

He also takes the partnerships as a sign of continued growth in the enterprise wireless LAN market. "Even if you take away Cisco's half of the market, there's still an enormous opportunity out there," he says.

— Dan Jones, Site Editor, Unstrung

belikejones 12/5/2012 | 3:15:51 AM
re: Trapeze's Partner Mania Trapeze is turning into a wlan software stack vendor. No different from Next Hop or the other vendors out there like Level7 or DeviceScape. Legra didn't have a choice in having its assets sold to Next Hop, but they didn't adopt a braindead strategy on purpose. The difference that I see between the 2 players standing is that Trapeze is driving the bus down the mountain without brakes, while Aruba is asleep at the wheel. The wlan switch is getting commoditized very quickly. Both Trapeze and Aruba would be smart to sell. In 12 months it may not matter.
whatupwireless 12/5/2012 | 3:15:46 AM
re: Trapeze's Partner Mania Who would they sell to? This is a joke really. Nortel isn't going to be burned twice so any Int Prop'y that Trapeze may have had they'll make sure they have rights to which basically makes them worthless in an acquisition sense.

Problem with so-called "switch" vendors (or remaining two as you call them) is they have no real, defensible position. They just engineered a little faster than the big guys. Airespace did one thing right - with no real IP to speak of (just a little quicker on the draw than the big guys and used duct tape with some third party software to bolt it on) they got into Cisco accounts and brought Nortel and Alcatel to the party with them. IP or no IP, you can't let that happen if you're Cisco. What /is/ all the hoopla about here? If an acquisition is going to be made its going to be to leap /ahead/ of Cisco, not catch up. Wellfleet/Synoptics learned that lesson long ago!
freetoair 12/5/2012 | 3:15:44 AM
re: Trapeze's Partner Mania Interesting post. It is so easy for people to focus on technology only. Sometimes you cannot see your hand in front of you. I agree with your asseretion that there really was no IP with Airespace, nor is there with Aruba or Trapeze. Airespace deal was unique and your bottom line summary makes sense. Thanks.
lrmobile_kanjanie 12/5/2012 | 3:15:43 AM
re: Trapeze's Partner Mania The only one with any IP was Chantry and they took the silver. I like the bus analogy but typically with the driver asleep and the bus going too fast it is a big crash with the investors out to lunch
whatupwireless 12/5/2012 | 3:15:41 AM
re: Trapeze's Partner Mania IP is something that someone can't replicate. In this day and age of "build a better mouse trap" people think engineering something quicker makes it IP. Chantry had nothing but the good sense to get out early and you can attribute that to a smart Board of Directors.
belikejones 12/5/2012 | 3:15:39 AM
re: Trapeze's Partner Mania I would not go so far as to say that these firms have 'nothing'. Clearly they are selling product in large enterprises, and a bunch of other startups went under. So, there must be 'something'. We can argue about what that is, or isn't. Its not the past or even the present that matters for these guys though. Its the NEAR future. I don't believe that either juniper, nortel, foundry, extreme, etc could build a product and beat trapeze & aruba in a magazine bakeoff in the next 12 months. The real question though is: if they just do 70% of that, is it good enough for their customers. Customers will prefer to go with an incumbent that solves most of their problems even if they don't have the best product on the market.

But the view from an acquisition perspective tells a different story. Even though Cisco had the benefit of years of 802.11 experience via the Aironet acquisition, they failed in their attempts to build an Airespace killer box. So they bought 'em. If the junipers/nortels go with in-house development, it is likely that they will lose to cisco/airespace in customer bakeoffs. Which is why I think its still a smart idea for juniper, nortel, et al to buy one of these vendors.
whatupwireless 12/5/2012 | 3:15:33 AM
re: Trapeze's Partner Mania Fair enough. They had something (defensible only with time-to-market) and they had it faster than the big guys (who are slow on the uptake/bureaucratic).

The reason acquisition is ill-advised is with all these OEM deals its not reasonable to think that they will ALL make the same mistake the Airespace OEMs made and leave their fates in the hands of another vendor. So either their a bunch of knuckle-heads and are willing to take the chance that someone else won't purchase Trapeze or they have rights to Trapeze's stuff, which makes Trapeze's value to any potential acquirer ZIP! (because with others having the rights to their stuff the acquirer gains no advantage - thats M&A101 right there). Which do you think it is? What value can you put on a company handing out its software to all your competitors with some rights of survivorship?
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