Telecom Ramblings

Ethernet equipment makers Force10 Networks and Turin Networks are joining forces, according to media reports.  This news follows on last month’s purchase of Ceterus by Overture, and of course Nortel is still shopping its Ethernet unit.  It certainly seems as if the the Carrier Ethernet equipment market is undergoing a bit of a consolidation frenzy.  Smaller players are seeking safety in numbers and in the cost savings they can eek out of the synergies there.  Of course that means layoffs, but then that’s par for the course nowadays.

In this case, Force10 and Turin are of roughly the same size with mostly complementary product sets.  While the two companies are private and no financials are likely to be given out, it looks something like a merger of equals with both CEOs even staying on in some form.  Both companies have long had big dreams, and I doubt that will change when combined.  One might suggest that at least the endless will-they-or-won’t-they IPO drama is over for Force10, however I don’t see why that talk doesn’t carry over to the new company.  But for now, they are obviously playing defense as carriers cut back on capex.