Extreme Networks CEO Talks M&A Strategy, Revamping The Company And 'Significant' New Channel Investment

Meyercord On The Record

Extreme Networks is pushing itself into the enterprise market unlike ever before through its M&A strategy and focus on becoming the largest pure-play networking vendor in the world.

"If I rewind a few years ago, I think Extreme had lost its way," said Extreme CEO Ed Meyercord, in an interview with CRN. "There were a lot of questions about, 'Will Extreme be around in the future?'"

Over the past several years, Meyercord has revamped the company with a new team dedicated to networking, while also acquiring strategic network assets from the likes of Avaya and Zebra Technologies. Meyercord talks to CRN about his M&A strategy, new channel investments and how its relationship with the NFL is "only getting stronger."

There's been a lot of consolidation in the networking market: Why and how has Extreme remained independent?

If I rewind a few years ago, I think Extreme had lost its way. There were a lot of questions about, 'Will Extreme be around in the future?' We put together a new, very experienced team dedicated to networking. We are a pure-play networking company. If you look around at our competitors, most of them are focused on other things. We feel like we're the best positioned player to provide an alternative to Cisco or HPE. We're exclusively focused on networking and delivering network solutions. So we got very focused. We started executing and it created opportunities.

How did you execute to create new opportunities?

So Avaya came along, and we were able to be opportunistic and strengthen our portfolio, our team, our technology, and our partner and customer base. The same thing is true with Zebra [Technologies]. The same thing with Brocade Communications. The strategy hasn't changed, we're growing our addressable market because we're covering more of the enterprise space – both from extending into the large-scale data center as well as expanding our vertical presence.

Are you getting into bigger accounts now?

Yes, definitely. We acquired Zebra, for example, and picked up a lot of the Fortune 100 [as] customers ... FedEx, UPS and Walmart ... We also picked up new technologies to better serve them. So if we look at this expansion of customers, partners, technology and markets, it creates new growth opportunities for Extreme. We're growing organically, which means we're taking share from the other players, and our exclusive focus on networking we think will allow us to win.

Should we expect Extreme to make another acquisition before 2017 ends?

Could there be an opportunity that could expand our target markets beyond the $16 billion that we're going after today? Potentially. But it has to fit within our strategy, and we're driven by our customers and partners. We are going to be opportunistic. We're going to stay focused on where we're focused today. So we'll look at new companies or companies that are potentially available.

Some of your competitors are acquiring startups. Is that an option for Extreme?

We are not going to pay a high price for shiny object startup – we're not going to do that. But we are going to take a business that has got good partner and customer relationships, interesting technology that fits into our overall solution portfolio and add that to the mix.

With the additions of Brocade, Avaya and Zebra, what channel investments are you making to drive partner sales enablement?

We are going to get a lot better in getting more prescriptive in helping partners position Extreme. Because if you’re a partner covering the enterprise space, you can literally position Extreme anywhere now. We're making a big investment in our product marketing teams, our go-to-market field teams to help partners and educate partners in understanding how to take all these pieces that we're putting together and how to leverage that to their advantage to be more competitive in the market place.

Can you give us any dollar figures around the investment?

We're making a five-fold increase in our product marketing teams and in our product development teams. That's a significant increase. It's a big investment.

You just closed your Avaya acquisition. How much revenue are you expecting to pull in annually from that?

About $200 million a year. We're trying to set what we think is a reasonable business level. We're about a month into closing that deal, we're really happy about a few things: the technology is terrific, the fabric technology and new modular switch that provides us a new path forward. We're excited about the partners and customers. There's a huge base of customers that we're picking up that really love the Avaya technology who are excited about our software and our wireless and where we're filling product gaps. And we're also bringing in really good employees.

W hat are the product synergies between Avaya, Extreme and Brocade?

The Extreme and Brocade portfolios compliment the Avaya solutions. It's very complementary. In the large-scale data center we have Brocade with Avaya. The campus technology is very strong – people are excited about the fabric. We're attaching our access points to the fabric. So we are extending the fabric to the wireless network with Extreme access points – that's happening in real-time. We can go to market with that now. Then our software, ExtremeManagement, it’s this control analytics that sits over the top of the network that the Avaya partners are really excited about. All of this coming together with a full end-to-end wired, wireless software-driven networking strategy is really coming to life. The pieces are coming together and strengthening.

What do you mean by Extreme's 'software-driven' strategy?

You can be very prescriptive in defining a solution for customers with software. Our management capabilities, the control capabilities, control on devices at the edge of the network, the policy that we bring – and then the analytics over it all to understand what's going on in the network and having control over the network. If it's healthcare, if it's manufacturing, if it's a government account – regardless of the vertical we're targeting, you can use our software to customize unique solutions for any given vertical.

How is that helping your partners?

From a partner perceptive, you get a lot of flexibility. You have a lot more tools and we're a lot more competitive in places in the network – from all the way out on the edge, wireless, then our Edge Switching platform, all the way to the core of the network with our new fabric that sits over the top, our new data center capability that we'll pick up with Brocade. Now the Extreme software, ExtremeManagment Center – which is our control platform – we have analytics in there as well sitting over the top giving you full visibility over the entire network.

Extreme is the official Wi-Fi and analytics provider for the NFL , which gives you huge brand awareness. Where does that relationship stand?

Our relationship with the NFL is only getting stronger. We just won the Tampa Bay Buccaneers. So we now have 22 of the 32 teams as customers, which is pretty good. It's been a huge help to us to have this exclusive status with the NFL. They're a huge fan of Extreme.

The NFL has realized that our solutions work. And not only does it work, but you have the high-quality performance and also tools to allow you to do some creative things. So the network becomes more strategic.

What about the college stadium market? Are these schools underserved as far as networking?

They are. You go to so many stadiums where you have a bad experience. I think there's an educational process that goes along with it. There's a lot of people that will sell a solution. The New England Patriots and the Kraft family owners get it. They're all about their fans and their experience – looking at ways to leverage the network to enhance the fan experience. This is available to college and universities.

Do you think colleges are starting to invest more in 2017?

We're starting to branch out more and more into college stadiums. In the college world, we just won BYU – Brigham Young University -- a division one program. Baylor [University] is another example of a school that's embraced our wireless technology in their stadium and arena in basketball. We are starting to see more of an investment taking place.

If I'm an Extreme partner and want to get into the stadium market, what's your advice?

Partners need to reach out to Extreme and let us know. There's a lot of different projects that are going on and a lot of different venues that are being developed today and it's a function of having relationships. We have great relationships with companies like Verizon for example, where they can save a lot of money from offloading cellular into the Wi-Fi environment. So there's funding options that are available that people not may be aware of.

If a solution provider is aware of an opportunity or a project, they should reach out to Extreme because there isn’t a better company to partner with because of our demonstrated track record with the NFL and many other sport franchises.

What's your message to solution providers heading into 2018?

There's never been a better time to partner with Extreme. We're more focused than we've ever been. In our target market, we're the only player focused on networking solutions alone. There's a lot of larger players that aren't focused solely on networking that are doing a lot of other things that are distracting. It gives us an opportunity to provide better solutions in each place of the network – end-to-end, the full enterprise solution. We can differentiate and we can provide a competitive advantage for partners looking to break into new accounts.