Extreme Networks’ Ed Meyercord On Hitting $1B In Revenue And Battling Cisco For Cloud Networking Dominance

Extreme Networks is the number two cloud in networking today. That’s because they’re winning deals and ‘raising their batting average’ against the likes of Cisco, as evidenced by record-breaking cloud and revenue growth, according to the company’s CEO Ed Meyercord.

Raising The Bar

Since its acquisition of Aerohive Networks in 2019, Extreme Networks has climbed its way to the second-place spot in the cloud networking space, a segment that’s only been on the rise over the last two years, especially as a result of the COVID-19 pandemic and businesses around the globe rethinking their IT needs.

Year over year, Extreme’s cloud growth has been explosive, and it’s been largely driven by channel partners, Ed Meyercord, Extreme Networks’ president and CEO, told CRN. In fact, the San Jose, Calif.-based networking giant reported 111 percent growth in cloud year over year during its Q4 2021 earnings call, with 29 percent overall revenue growth and 36 percent year over year bookings growth during its fiscal fourth quarter. For the entire fiscal year, Extreme posted record-setting revenue of more than $1 billion.

That’s all thanks to Extreme’s cloud-managed Wi-Fi experience, along with its analytics, location-based services, and security offerings. Meyercord talked with CRN about how the company is stealing wallet share from its competitors, how its growth rate is more than ten times that of Cisco and that its Aerohive acquisition is the best deal the company has ever made, and the opportunity around next-generation networking and Wi-Fi solutions, including the “game-changing” Wi-Fi 6E, for Extreme’s channel partners.

Here’s what Meyercord had to say.

How is cloud contributing to your earnings successes?

We’re very pleased with the earnings results in terms of the momentum that’s building in the business. We’re taking market share. Last year, we were impacted significantly by COVID. But despite that, we’re up 29 percent year over year in overall revenue growth and with that kind of revenue growth in the quarter, it put us over the billion mark. We’ve had quarters over $250 million, but in terms of the print for the year, is a major milestone for Extreme to officially, in our public filings, report over a billion dollars in revenue for our fiscal 2021. We’re very pleased about that.

Momentum has really been building up through the course of the year, and it’s spilling over into this quarter. What’s been driving it is our positioning in cloud [and] what’s happening in the macro environment and where we see enterprise going. We feel like we’re at the right place at the right time, in terms of the solutions that we’re bringing to market. All of this is really hinged around cloud. Cloud is where we saw triple-digit growth again, so 111 percent growth year over year in cloud. The Aerohive acquisition is a slam dunk — it’s the most successful acquisition that we’ve made, really driven by how we’re migrating our portfolio in the cloud because the cloud will really tie together the future of work in terms of how we see enterprise customers in the now-normal environment. [Our] record growth was fueled by bookings growth, which was even higher than revenue growth — about 36 percent. It’s been for us a really nice way to finish off to finish off the fiscal year.

How much are partners contributing to the growth?

We’re a partner-driven company, so partners are a huge part of it. Eighty-five percent of our business flows through our partners. What we’ve seen is the momentum this year with our partners embracing our cloud and the technology platform that we have today with the solutions that we’re bringing. We have a very cohesive story and I think it’s much easier today for people to position Extreme. I think for partners in the channel now, our brand has been up leveled, because we’re clearly the number two cloud and we’re the fastest growing cloud. As people are contemplating their work environments and they’re contemplating the role of networking, networking is really never been more strategic. I think our channel partners are echoing the sentiments that they’re hearing directly from customers. As people are reimagining work and reimagining a hybrid workforce, they’re thinking about cloud. And as people think about cloud, they want to hear from Extreme. Now more than ever before, we’re getting more swings at the bat. Partners are positioning us, and our batting average is higher. When we’re winning in the market, I think it makes partners more inclined to position Extreme. We’re getting more wallet share this year.

Does that growth signal to the market that you’re taking on Cisco and winning?

Let’s put it this way. Our growth rate is 10 times that of Cisco. I have a feeling it means we are taking share. We have structural advantages and competitive advantages to our cloud solution. Just the way we have cloud-native architecture, our cloud is architected in a very different way. This is going to open up the door for more services and our ability to deliver more services at the edge of the network in a way that is scalable and in a way that’s secure. I think the velocity of what we can bring to market will be quicker, in terms of speed, that our than all of our competitors, not just Cisco.

The other thing I would add to that is that we’ve invested a lot in our back office and a lot of what we’re seeing in the channel is higher transaction volumes and we’re making it easier for our channel partners do business with Extreme. We have a touchless order ordering system that we’ve been putting in place where there’s direct flow through of orders and operational processes that are just making it really easy. We’re attracting a lot of new partners — over 2,000 new partners over the course of the year — and then those partners who are coming on to Extreme, we’re making it easier for them to transact, so we’re seeing a higher percentage of these new partners come in and transact right away.

What are the most sought-after Extreme solutions right now?

In our case, the cloud is the fastest growing segment in networking. Clearly, I think we’re all about the effortless and bringing simplicity to complexity. With everyone going home, their networks got a lot more complex. The cloud became an important glue, if you will, to have complete visibility of all connection points in the network and of all the devices that are running the network, and application performance, etcetera, from one centralized location. Then, with CoPilot [a subscription within the ExtremeCloud IQ platform that uses AI to help enterprises identify and solve complex IT issues] and bringing in machine learning and AI tools to get insights [into] what’s going on in your networking environment and then being able to harness those insights to deliver higher-quality performance. All of our subscription licenses are our main Extreme IQ license, and we deliver more in terms of software than any than any of our competitors, [such as] Wi Fi security with [Extreme] AirDefense, and location-based services for Wi-Fi guests, and being able to store and capture data running over your network, these are things that I think were resonating this year.

We just launched CoPilot [in May] and now we’ve made that available to all of our users in cloud IQ, but we haven’t started billing for yet. What you’re going to see over the course of this year is a significant volume of new services that we bring to our customers over the cloud. We’ll see more use cases for CoPilot in the second half of this year and that will become a billable license. For our partners, this is going to provide yet another way for them to make money and to monetize the cloud with the new services that we’re bringing, because we’re going to be doing that in partnership with the channel community.

Extreme in July announced it is the first vendor to ship an enterprise-grade Wi-Fi 6E access point — the Universal Wireless AP4000. How big is the Wi-Fi 6E opportunity for channel partners?

We think Wi-Fi 6E is different. There’s always been hype cycles behind different generations of Wi-Fi, but this is truly different. When you talk to our wireless product teams, they’re like kids in a candy store. The energy is like this is a renaissance of Wi-Fi. And the reason is that there’s a lot more bandwidth that is being allocated to Wi-Fi. We have now, in the 6GHz spectrum, a huge block of bandwidth which we can now use and in 6E, the extended 6, now we have radios that can run simultaneously in the 2.4, 5, and 6 frequencies. It provides us with access to more bandwidth and more flexibility in terms of deployment. And then the important thing is that because of this, we can run at much higher speeds. So, as far as application use cases and what we’ll be able to do with Wi-Fi, this will open up the door to multi-gig rate speeds from access points, which is really, really big. We’ve deployed this in a customer environment in healthcare and the feedback is there’s a lot of excitement there. I think we’re in the early stages of evaluating use cases.

The other thing I’ll mention is we talk about the massive investment in 5G networks on the on the wireless side and on the cellular side and when you talk to all these cellular providers, what they say is that the deployment of those 5G networks is only going to drive and accelerate growth in Wi-Fi, because they’re complimentary. And so, the ability to support higher-bandwidth applications is going to be critical. So, the opening up of new spectrum and then the allocation of that spectrum, and then having the ability to run and then run at much higher speeds, with higher quality connections, is a big deal. We think that, unlike other cycles in the past, 6E is really going to be a game changer. And for us, we’re excited to be first to market with this technology, with our partner, Broadcom.