ExtraHop CEO: We're Disrupting The Performance Management Space And 'Taking Share' From NetScout, Riverbed, CA

The 'Next Generation'

Arif Kareem, president and CEO of ExtraHop Networks, said the Seattle-based is disrupting "legacy players" like NetScout, Riverbed and CA Technologies in the performance management market.

"There are the legacy players, then the next-generation players like us who are taking a more data-centric approach," said Kareem in an interview with CRN. "If a channel partner wants to solve their customers' problems in this new world – which is becoming more complex, data-driven, and security is becoming a big issue – then we are one of the best partners they can have. It's as simple as that."

Kareem holds decades of IT leadership experience including a recent six-year stint as president of Fluke Networks, where he helped the vendor increase revenue to more than $350 million. In an interview with CRN, Kareem talks about competition, ExtraHop's partnership with Cisco Tetration and AppDynamics, his channel strategy and investments in artificial intelligence.

Where is ExtraHop gaining steam in the market in 2017?

Where we are disrupting and where we are gaining share is from the legacy guys who take the whole approach from more of the packet perspective. Whereas we are looking at it from the data side of everything. It is the NetScouts, the Riverbeds, the Viavis, it is the CAs of the world we are taking share away from.

At the same time, because we are also a network traffic analysis company … we are mostly running into startups in that space. But our advantage is we're able to correlate what's happening on the performance side of the IT infrastructure as well as what's happening from breach and intrusion and all of that – then we correlate everything and provide a very powerful insight to our customers, which many of our competitors can't.

How is ExtraHop differentiating itself?

We are already disrupting the whole performance management space because of our big data platform approach and providing insights first, rather than focusing on packets. Because on a real-time basis we grab traffic and are able to develop insights, it has also helped us with the investments, which really differentiates us from many competitors in the space of machine learning and AI. We can look at anomalous behavior in the network and figure out what is creating this anomalous behavior, then how to eventually learn and remediate through an anomaly workflow. That is the direction the company is going. We're a next-generation performance management company with movement into network security because they are both intertwined.

So what type of investments have you made in machine learning and AI?

We realized about three years ago that while one can simplify dashboards and create configurations, which are very customer and end-user-friendly, there is a way to further automate this whole performance management process. We invested in data scientists about three years ago and worked on our anomalous behavior detection and anomalous workflow. We introduced a SaaS-based service that runs in AWS, which leverages our virtual appliances as well as on-premise appliances and is able to detect anomalous behavior. The service, the AI, tells you automatically what has changed from the normal. Then alerts you. It improves the productivity for the IT guys.

Let's talk channel. How much of your revenue comes from indirect versus direct?

Just shy of 90 percent of revenues flow through channel partners. It's 100 percent in EMEA and in Asia. A very large chunk, close to 85 [percent] to 90 percent in North America. This includes both the fulfillment as well as the opportunities that channel partners bring to us. Channel is very, very critical for us today as well as in the future.

How are partners becoming profitable selling ExtraHop?

If you look at it from the channel partner perspective, their main initiatives these days are cloud, security and digital transformation. ExtraHop has got those solutions because we are not only on-premise, but we also have virtualized appliances which can enable a virtualized environment. We also have solutions for AWS and [Microsoft] Azure, so channel partners can help customers' cloud migration strategy. We are very much aligned with the strategic initiatives that the channel partners have because of our real-time visibility and insights, and looking at anomalous behavior and all of that.

Describe your partnership with Cisco Tetration.

Tetration is a sophisticated policy management system and we decorate that with our real-time data to be able to have it do even a more comprehensive solution for customers.

Many times, a security breach happens and the endpoint security is not sufficient -- people can still sneak past, then the perimeter is also sometimes not good. So we also provide very strong capabilities on a real-time basis of breach detection and then a path to instant response and remediation with our integration with Cisco Tetration and with ServiceNow.

On the ServiceNow side, we have an integration with them on instant response. We also have many use cases where we co-exist with Splunk and AppDynamics.

Give me a use case with AppDynamics.

So where the customer is using AppDynamics for more application performance and for app development, they also use us for the overall [solution]. We are the first tool which people are preferring to use both for network application and IT infrastructure. So channel partners who are selling Splunk or AppDynamics, there are many use cases where we co-exist and integrate [and] that's an opportunity for partners to provide a more comprehensive solution for customers.

What is your primary target market?

Our focus is primarily enterprise -- the global 2,000, Fortune 1,000. We are not an SMB player. It goes a little bit into the midmarket, that's where channel partners help us a lot.

What verticals are you focused on?

We are a horizontal play. It's suited very well [to] health care, financials, as well as in the retail segment for branch office or remote site visibility. Those are the three areas where we have the most success, but that doesn't mean that we are not winning in other verticals as well. A slow network is now the new downtime.

Why are you winning more market share?

IT is less about speed and feed now and more about managing the data, which is growing exponentially. We approach it differently from the way legacy [players] did, which said, 'Hey, you've got packets. You capture them and store them, then retroactively look at them.' Our approach is we build a big data platform which immediately takes unstructured data into a structured form, and from the metadata we are able to develop insights and metrics and alerts. We also have the forensic capability because eventually people still would like to see packets.

Talk about your new ExtraHop version 7.0 software.

7.0 is really breaking us apart from the rest because there's a lot more machine learning around anomalous behavior and detecting it and creating instant response and alerts. … Now the customer is going to have a pretty broad visibility of the network in terms of what is happening. We are also providing performance and visibility into more decryption because if the data is encrypted and you can't provide visibility, then that is a shortcoming. We have added that capability. This big data platform is becoming very comprehensive and critical for both the IT people and the security team.

Why should a solution provider bet on ExtraHop over your competitors?

The whole IT space is going through transformation. There are the legacy players, then the next-generation players like us who are taking a more data-centric approach. If a channel partner wants to solve their customers' problems in this new world – which is becoming complex, data-driven, and security is becoming a big issue – then we are one of the best partners they can have. It's as simple as that. We are a next-generation company.

Why did you join ExtraHop 15 months ago?

This was one of the most exciting opportunities I've ever had. We have a very innovative culture and a very customer-success-based culture. Then the market opportunity is going through big changes from speeds and feeds, to data and digital transformation. We have this big data platform that we can leverage to solve our customers' problems from visibility, mapping the network activity, application dependency, cloud migration as well as the security. So I'm really very excited where the company sits today and what the future holds for us.