Enterasys Has a Switch Pitch

Incumbent Ethernet vendor readies assault on wireless LAN switch market

December 4, 2003

2 Min Read
Enterasys Has a Switch Pitch

Enterprise network equipment vendor Enterasys Networks Inc. (NYSE: ETS) has confirmed speculation it is to follow rivals Extreme Networks Inc. (Nasdaq: EXTR), Nortel Networks Corp. (NYSE/Toronto: NT), and Foundry Networks Inc. (Nasdaq: FDRY) into the wireless LAN switch market.

In April, Enterasys's wireless LAN marketing manager, Jeff Manning, told Unstrung he didn’t see the need for his firm to sell a wireless switch at that moment in time (see Enterasys Mulls Switch Switch ).

A few months on and opinion has altered. “We are moving into this space. It is rational and obvious for us to do so,” he admits. “We are looking at it very strongly.”

Manning declined to put a timescale on any launch plans, but stated that the company would be unlikely to enter into partnerships for production of the switch. “It will be done in-house.”

The problem with this plan, however, is that Enterasys has a late start. The company lags earlier efforts from wireline switch rivals, as well as a host of startup offerings from the likes of Aruba Wireless Networks, Airespace Inc., Trapeze Networks Inc., and Vivato Inc. (See Extreme Ships WLAN Kit, Foundry Makes Its Switch Pitch, Nortel 'Reveals' WLAN Offerings, and Startups Add to Switch Mix.)

Manning is convinced the company’s relatively late entry to the market will have little impact on future success, in light of slow early demand for wireless LAN switch equipment. “At present, customers are asking about it, but not for it,” he claims. “Activity is high in this space but shipments are low... Users are waiting for a shakeout before deciding on suppliers. The window on the startup community is also closing rapidly.” (See WLAN Switch Shakeout Looms?.)

Wireless LAN switches typically sit in the wiring closet between a management console and wireless access points; they handle tasks such as determining how much of the available bandwidth will be allocated to each user and which users should be allowed on the network, as well as implementing security features like data encryption.

Analysts are already predicting a bright future for the market. Infonetics Research Inc. forecasts healthy quarterly revenue growth in the double-digit percentages through 2004, and annual revenue growth in the double-to-triple-digit percentages through 2006, at which time worldwide revenues for wireless LAN switches will supposedly reach $169 million (see It's Alive: 802.11 Switches On and 2005: A Switch Odyssey?).

— Justin Springham, Senior Editor, Europe, Unstrung

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