Avaya Inc. and Extreme Networks Inc. this week announced a partnership where Avaya will sell and support Extreme's LAN switches, while the two firms will jointly develop technologies for converged Internet Protocol (IP) networks.
The move strengthens Avaya's Ethernet switch offerings over its existing Cajun product line, which has been a non-factor in the market. The deal also puts Avaya's US$2 billion services arm to work for Extreme, giving the switch company an army of 8,500 Avaya service professionals for installing and maintaining its Ethernet gear.
As part of the agreement, Avaya will receive a warrant to purchase up to 2.6 million shares of Extreme Networks' common stock, as a price of US$0.01 per share.
With Avaya selling and supporting Extreme's BlackDiamond, Alpine and Summit products, the voice company has strengthened its datacom product portfolio over its now flagging Cajun LAN switches. Avaya over the last year had pulled back on development and marketing of its Cajun switch line, which accounts for less than 2 percent of worldwide LAN switch market share, according to IDC. Avaya says it will continue to sell and support he Cajun line, in addition to selling Extreme's gear. Extreme will continue to sell its products through its existing channel partners.
The two companies said they will also work to co-develop new technologies in the areas of management and provisioning, QoS and security for converged IP networks. Avaya and Extreme pointed to the Session Initiation Protocol -- an emerging convergence standard backed by Microsoft Corp.'s -- as a technology area both vendors will focus on in future joint product development efforts.
Observers say the Avaya-Extreme alliance is a tag-team effort to challenge Cisco Systems Inc., which leads the LAN switch and IP telephony markets. Avaya and Extreme are billing their combined product offerings as a standards-based alternative to "proprietary" convergence products, namely Cisco's AVVID product line. (Avaya uses proprietary protocols in its own Multivantage voice over IP products, as do most vendors in the market). Extreme is considered by some industry analysts and users to be a leader in Layer 3 and Gigabit Ethernet LAN switching, although its installed base is one tenth the size of Cisco's.