Data center switching vendor Force 10 Networks this week says it is merging with Turin Networks, a provider of wireless backhaul, Carrier Ethernet and converged access systems for service providers.

Both companies are privately held.

The agreement is another example of consolidation in the Ethernet switching marketplace as Cisco maintains its dominance and Juniper ramps up its presence in the market. Last year saw Foundry Networks merge with Brocade, and Enterasys Networks link up with Siemens Enterprise Communications.

(View a slidehow on the hottest tech M&A deals of 2008.)

The combined companies will have more than 1,300 customers worldwide and a product portfolio they say will serve both the enterprise and service provider markets through existing sales channels. The merged company will carry the Force 10 Networks name.

Henry Wasik, president and CEO of Turin Networks, will become the president and CEO of the combined entity. Current Force10 Networks President and CEO James Hanley will assume the role of president, field operations, with responsibility for sales, marketing, services and business development.

According to Force 10, the merger creates operational efficiencies and market focus in two high-growth networking segments. Over time, the new company will deliver products through the integration of Turin's wireless backhaul, metro service edge and converged access platforms with Force10's access switches.

Turin's wireless backhaul products are deployed in more than 60,000 North American cell sites. Force 10 has less than a 1% share of the overall US$18 billion Ethernet switch market, but a much more significant share of the total 10 Gigabit Ethernet market, according to Dell'Oro Group.

Citing data from market research firms IDC and Ovum RHK, the companies say 2 million 10 Gigabit Ethernet ports will be deployed in data centers worldwide next year, while data center Ethernet switching revenue will grow at a compound annual rate of 8% to reach $6.4 billion in 2012.

Meanwhile, the market for pseudowire and Ethernet backhaul transport equipment is expected to grow by more than a factor of 10 between 2008 and 2012, reaching more than $5 billion in 2012, the companies say.

The merger is expected to be finalized by March 2009, pending the completion of legal and regulatory filings. The combined company will be headquartered in San Jose.

» posted by ITworld staff

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