Extreme Networks CEO: ‘We’re Calling For Double-Digit Growth’ In Enterprise Cloud Networking
‘It’s an exciting opportunity for Extreme to leapfrog some of the older technologies that are out there … We’re calling for double-digit growth in enterprise in the first half of this calendar year. If you compare us to other vendors, I’m not sure you’re seeing that with other providers in the industry,’ Extreme Networks CEO Ed Meyercord tells CRN.
“Leapfrogging” The Competition
Extreme Networks saw its cloud networking sales shoot through the roof over the past year. In Q2 2021, the provider’s new cloud subscription bookings grew a whopping 140 percent year over year as cloud-based services emerged as a critical technology for schools, governments, healthcare organizations and businesses now faced with a distributed workforce.
But the San Jose, Calif.-based networking giant is not just growing within its own large base of customers, it’s stealing market share away from the competition. Extreme Networks this month scored a deal as the official Wi-Fi solutions provider of Major League Baseball (MLB), which means that the company will deliver in-stadium Wi-Fi and Wi-Fi analytics in 16 MLB ballparks to improve the fan and media experience beginning this year, with installations scheduled through 2026. And Extreme took the coveted MLB account out from under another competing wireless giant. Also this month, Extreme was the official Wi-Fi Solutions Provider of the Super Bowl for the eighth year in a row, delivering an entirely Wi-Fi-dependent mobile ticketing and touchless payments to the 22,000 fans in attendance, in accordance with COVID-19 restrictions.
While Extreme Networks’ President and CEO Ed Meyercord said that COVID-19 has been an accelerant in the company’s impressive growth, Extreme’s cloud-managed Wi-Fi experience — coupled with analytics, insights and intelligence — is turning heads. Meyercord talked with CRN about the company’s own transformation, flipping customers over to Extreme from the competition, new services on the horizon, and how partners – the provider’s primary focus -- are a big contributor to Extreme’s success.
Here’s what Meyercord had to say.
How is Extreme’s substantial growth in cloud giving the competition a run for their money?
This is our third sequential quarter of growth in both topline and earnings and a lot of the energy and fuel behind that is what happened with cloud. This quarter, we saw 40 percent sequential growth come from cloud subscriptions and then year over year, 140 percent growth. So, it’s really putting the stamp on us as the fastest-growing cloud out there and I would say that’s driving the enterprise interest in Extreme. Given the environment that we’re in today and what is going on with the enterprise becoming more distributed, the cloud is a natural platform to simplify the management of a more complex environment. Our cloud brings simplicity, insights, and we talk about delivering on effortless user experience. The cloud can make it much easier to manage that network experience if you’re running an enterprise. The other thing it brings is AI and machine learning, and these will help companies drive efficiencies and down the total cost of ownership in running a network.
At the end of the day it’s all about simplicity. We have competitive differentiation in cloud and are bringing some things to the game our competitors can’t bring. As a result, that’s creating more turns at the bat for Extreme and the conversion ratio is higher. That’s bringing a lot of energy to our partners, which is our primary focus.
In speaking about the conversation ratio, does this mean that customers are leaving competing vendors and coming to Extreme?
Yes! An example being Major League Baseball [MLB] – [a deal] we just announced -- we took that from the largest industry competitor because [the MLB] is interested in having that complete, cloud-managed stadium experience and having the intelligence that comes from that. It becomes more about the analytics, insights and intelligence. We have unique capability as it relates to delivering data and a unique vision on how to leverage data in the environment to change the customer experience and impact the business outcome, and that’s true across different verticals that have different [customer] outcomes.
An example of that was the Superbowl -- it was the first cash-free Superbowl. You hear everyone talk about the acceleration of digital transformation but that was a case and point -- they were looking at digital ticketing and a cash-free experience out a couple of seasons, but now they rolled that out into the Superbowl and you’ll see that accelerated deployment roll out to the rest of the league. It’s easier if [Wi-Fi] is managed through the cloud. It opens up the door to a lot of other possibilities. One thing we are talking about is having non-Extreme devices being managed from the cloud, which is another opportunity for new services and new capabilities that don’t exist today.
New cloud subscription bookings jumped 140 percent year over year. How much of this is coming from the channel?
Eighty-five percent of our busines comes from the channel, so there’s a big opportunity for us to attract channel partners and then to get increased wallet share with partners because of the differentiation we have in the cloud. One of the things we’ve done that’s helped drive our growth and [financial] results is drive our own digital transformation by automating a lot of our own systems and processes. We created a platform called Channel Self-Service, which basically makes it a lot easier to flow touchless orders through Extreme and I think we will see a lot of that. The simplicity of our licensing is also very attractive. With combination of things we’ve done to be easier to do business with and then the differentiator in cloud, I think we’re attracting a lot of interest in the channel. If you’re a partner with a cloud strategy, you have to take a look at Extreme.
Do you think we’ll see cloud subscription growth even out in 2021 as customers may have secured what they needed to support their remote working environments?
We see the opportunity really growing on a few fronts. If we think about our own install base of customers, most of them are still managing networks on-prem. We have a big opportunity to go beyond the over 5 million devices we have just with our install base as far as networking potential. But then you go beyond that and our management platform [will] have the ability to manage non-Extreme devices. As we introduce that into the cloud, that will further growth opportunities to further cloudify what’s out there. Then, with IoT, we have a unique cloud architecture and we’re driving multi-domain cloud, which means we can manage third-party devices from our cloud. Now, you’re opening up IoT and 100 billion devices that you have the potential to manage in the cloud. A lot of people are creating edge devices don’t necessarily have a cloud platform. We can make it easy to introduce ExtremeCloud IQ as the manager. That then creates new revenue opportunities both for us from a licensing perspective and new opportunities for our customers that now have greater easy of management with deploying IoT devices.
There is absolutely a big area of opportunity [for partners]. We’re in the early stages of third-party device management, but we will be creating specialized teams focused on how we introduce new technologies into our cloud. In addition to Extreme technology and our capabilities, we have something called Co-Pilot which is introducing automation, machine learning, and AI into the platform.
What do you think are the biggest areas of growth for the channel?
The way we look at this is [we consider] what COVID has done and everyone going remote. It’s changed the way people are looking at traditional networking. People are starting to think differently and are looking at different options or new solutions. We see that happening in cloud. Industry research is saying that … our serviceable market is a $15 billion market. The fastest growing segment in that market is cloud. That is projected to go from $2.7 billion to $7 billion in 2023. That reflects the enterprise rethinking how they manage the network and now being open to cloud -- not just cloud for wireless or the edge, but more holistically, the benefits of cloud end to end. Extreme can offer more flexibility in terms of cloud choice, we bring more security -- we have the only ISO-certified cloud -- and we’re offering unlimited data. It’s all about unlocking data and we want to partner with the channel and the customers on how we do that and how we make it easy to collect and leverage data either from our network or other devices. We’re excited about it because we have that differentiation relative to the competitors in this space. It’s an exciting opportunity for Extreme to leapfrog some of the older technologies that are out there that represented the old connectivity.
From a channel perspective, I think growth and taking market share means we have industry-leading solutions by definition. We’re calling for double-digit growth in enterprise in the first half of this calendar year. If you compare us to other vendors, I’m not sure you’re seeing that with other providers in the industry, and that velocity speaks for itself.