Cabletron has acquired a 20% stake in Ipsilon Networks and announced a technology collaboration agreement with the IP switching company.
The stake is worth around $20 million (#12.2 million) and makes Cabletron the largest single investor in the privately held company. Founded in 1995, Ipsilon claims to have invented IP switching and introduced the industry's first IP switch in March 1996.
Under the deal, Cabletron will license Ipsilon's IP switching technology with a view to linking it to Cabletron's SecureFast architecture and SmartSwitch systems, ensuring interoperability between the architectures. The partners claim the collaboration will offer customers a solution for building enterprise-wide switched networks, replacing slower, routed networks.
Ipsilon will also integrate its IP switching with Cabletron's Spectrum Enterprise Management system, allowing network administrators to manage their switched networks. The companies said this will allow customers to pinpoint areas of the network where high bandwidth is required, rather than increasing bandwidth across the whole network infrastructure.
"We will be the first partnership in the industry capable of delivering an enterprise-wide, end-to-end Layer 3 switching solution across the LAN and WAN," claimed Chris Gabriel, product marketing manager for virtual technology at Cabletron UK. He added: "Although we are investing in Ipsilon, in terms of technology it's a two-way linkup."
He denied Cabletron's investment was the prelude to a takeover bid. "There are no corporate plans for a takeover," he stated. "The Cabletron philosophy is to bring on partners."
Although Ipsilon is widely known in the US, the company has yet to make much impact on the European market. Gabriel said this was largely because Ipsilon specialises in ATM technology, which has gained much wider acceptance in the US than over here.
As the deal also allows the two companies to resell each others' products, it opens doors for Ipsilon in Europe where Cabletron has a much larger base.
"We are opening up markets for each other," said Gabriel. "We will help them get more exposure in the European market and in the LAN market in general."
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