Avaya, Extreme Form Sales Pact

As part of the deal, Avaya will resell Extreme's data networking products, including its BlackDiamond and Alpine chassis switches, and promote Extreme's offerings through its qualified indirect channel partners, said Mike Thurk, group vice president for the enterprise communications group at Avaya, Basking Ridge, N.J., during a conference call.

"We're taking into account our existing channels as well as potential future channels for opening up [to] Extreme," Thurk said.

Avaya will also receive a warrant to purchase up to 2.6 million shares of Extreme's common stock for a penny per share.

Through the new alliance, Avaya will act as a single point of contact for joint customers by providing both sales and services, a move that should increase customers' comfort level with the technology, said Gordon Stitt, president and CEO of Extreme, Santa Clara, Calif.

The companies will also jointly develop technology aimed at speeding the adoption rate of IP telephony, Stitt said.

"[We're] making sure that when you deploy IP telephony as an application on the network that it's easy and quick to implement and [it] will result in lower total cost of ownership," Stitt said.

Development areas the companies plan to focus on include network resiliency and self-healing capabilities, simplicity of design to further drive total cost of ownership, implementation and management, and enabling emerging applications that use advanced protocols such as Session Initiation Protocol, he said.

Avaya will continue to offer its own line of Cajun data networking products to existing customers, and Extreme will continue to sell its switches through its own distribution channels.

The deal could open up new channel partners to Extreme's data networking technology.

Mountain West Telecom, an Avaya IP telephony partner, will evaluate Extreme's product line, which it does not currently represent, said Todd Wyatt, senior account executive at the Murray, Utah-based solution provider.

"I've got a couple of data engineers that we'll have look at these products, but we have to find out what Avaya's plan is with Cajun going forward," Wyatt said.

Avaya said it plans to offer maintenance, support and other services for Extreme's networking products through its Global Services unit. Avaya last week moved to bolster its services capabilities via the acquisition of Expanets, one of its largest resellers, a deal that raised channel conflict concerns for some partners. The $152 million deal, expected to close this quarter, closely followed Avaya's acquisition last month of the professional and managed services business units from Vista Information Technologies.