Nemertes Impact Analysis:

The recent announcement by Extreme Networks (NASDAQ: EXTR) that it will base its next-generation data center architecture on the emerging IEEE Virtual Ethernet Port Aggregation (VEPA) specification highlights the ongoing performance and scalability requirements for increasingly-consolidated data centers. The IEEE began work on VEPA last month; the idea is to enable massive performance and scalability increases by pushing virtual machine switching to the switching hardware. This is in contrast to the approach taken by Cisco and others, which involves adding virtualization software to switching hardware. Regardless of whether VEPA proves to be the correct approach, all major vendors are planning significant performance improvements for 2010.

Impacts::

Enterprises: Keep an eye on VEPA. Assess the performance of data-center networking gear in 2010.

Vendors: Data center performance and scalability will continue to be issues through 2010. However you do it, make sure your gear is up to snuff.

Investors: Watch for significant market changes in 2010, as the upcoming paradigm shifts open new opportunities.

By Johna Till Johnson, President and Sr. Founding Partner

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