Extreme Networks Sharpens Its Focus on Solutions, Partners, Midmarket
In the quarter that closed in September 2015, about 10 percent of Extreme's sales came from solutions, he said. A quarter later, that grew to 15 percent, and in the most recent quarter, 18 percent of sales were solutions sales. The Enterasys acquisition has been a key part of the solutions effort, Meyercord and Rice said. Other vendors also are looking to boost their wireless capabilities—such as HPE's $3 billion acquisition of Aruba Networks last year and Brocade's recent $1.2 bid for Ruckus Wireless—but Enterasys gave Extreme a time-to-market advantage. "We were early as far as the convergence of wired and wireless," he said. It's an advantage the company wants to push. According to Meyercord, a year ago, about 30 percent of Extreme's sales reps sold wireless solutions. Now 100 percent do, and the company often leads with its wireless story. Extreme also is eyeing five particular verticals: education, health care, manufacturing, government and hospitality, including sports stadiums. That focus has given the vendor deep expertise in addressing the particular needs of organizations in these industries and an expanding roster of customers that can be referenced, according to Rice. Those include household names including Intel, Samsung and Volkswagen, as well as Baylor University, Dallas Area Rapid Transit, the police and fire departments in New York City and Los Angeles, and the NFL and many of its football teams."They're spread out there and we're very focused," he said. Channel partners will play an increasingly important role in Extreme's efforts in its targeted verticals. The vendor has about 500 partners in the United States and 2,100 worldwide, and Extreme is looking to support them in a variety of ways, from training and incentives to tools and certification programs. Going forward, Meyercord said the company will continue to broaden its technology portfolio and solutions offerings. Most recently, Extreme last week unveiled ExtremeCloud, a cloud-based management platform for managing both wired and wireless switches and access points. The offering was an example of both Extreme's focus on solutions and its push to streamline its marketing and branding efforts. The company at one point had multiple products with multiple names, Rice said. Now the company has streamlined its products under names such as ExtremeSwitching, ExtremeWireless, ExtremeAnalytics and ExtremeSecurity. It also helps company officials better tell Extreme's story, according to the executives. The vendor in the past had not done a good job getting its message out to the market or the media, which the company plans to focus on as well in the months and years ahead. Indeed, the trip last week to the Boston area to talk with analysts and journalists was part of the effort to increase Extreme's exposure and define itself and its market. Over the rest of year and into 2017, the company plans to continue expanding its partner programs and is projecting that financial growth to continue, Meyercord said. What the company won't be doing is looking for a buyer, the CEO said. After communications technology vendor Mitel announced last month that it is buying Polycom for $1.96 billion, Zeus Kerravala, principal analyst with ZK Research, posited that Mitel may want to now acquire a networking company to expand its competition with Cisco and others, and mentioned Extreme as an attractive possibility. "We're not for sale, especially today," Meyercord said. "We see way too many opportunities to be distracted by M&A discussions." If anything, Rice said, Extreme is now in a better position to be a "consolidator" rather than a "consolidatee."
Meyercord said the total addressable market for Extreme is about $8 billion, which makes it attractive for other vendors. However, most competitors also are trying to woo server enterprises and hyperscale customers, which can distract them from their midmarket efforts.