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Extreme Networks' purchase of Broadcom's Brocade data center business is the latest step in an acquisition-fueled strategy that has left the vendor with the difficult task of unifying a diverse product portfolio.
Extreme announced this week that it reached an agreement to buy Brocade switches and routers and network automation and analytics software for $55 million in cash. Extreme and chipmaker Broadcom, which acquired Brocade late last year only for its storage area networking business, expect to close the transaction in 60 days.
The acquisition comes roughly two weeks after Extreme agreed to pay $100 million for Avaya's networking business, which includes switches, software for network management and access-control, and the software-defined networking (SDN) portfolio Fabric Connect. Five months before the Avaya deal, Extreme completed the $55 million acquisition of Zebra Technologies Corp.'s wireless LAN business.
Altogether, the mixture of technologies will require lots of integration and consolidation to produce the coherent, unified product line promised by Extreme. "There is definitely some uncertainty in the near future whether or not Extreme can execute on all these fronts," said Mark Hung, an analyst at Gartner.
Indeed, users of the acquired products are likely to add to the pressure. "There will be integration and assimilation challenges, and customers will be looking for direction and clarity," said Brad Casemore, an analyst at IDC.
Extreme seems confident that it can hold onto the customers that came with the acquisitions. The company expects the Brocade portfolio to add $230 million in annual revenue while Avaya's networking business contributes another $200 million a year. Extreme predicts $115 million a year in sales from Zebra's WLAN business.
"Their number one goal has to be retaining the current customers," said John Burke, an analyst at Nemertes Research based in Mokena, Ill. "It is strongly in their interest to make the transitions as smooth as possible."
Brocade data center hardware, software
Brocade data center software heading to Extreme includes Flow Optimizer, which improves packet traffic, and Workflow Composer, a network automation platform. Other software includes Brocade's network packet broker technology.
On the hardware side, Extreme gets the SLX and VDX switches and the SLX and MLX routers.
As a whole, the Brocade applications bolster software-driven networking but do not fall into the category of SDN, which typically lets administrators shape traffic from a centralized control console without having to touch individual switches.
"Strictly speaking, this is not an SD (software-defined) related acquisition," Casemore said.
Extreme passed on Brocade's SDN products. The software portfolio includes the Vyatta Controller, a virtual application delivery controller (vADC) and network functions virtualization (NFV) technology. Broadcom is searching for a buyer for those products.
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