Tough Year Behind, Extreme Networks Looks Ahead To Data Center5:41 PM EST Wed. Dec. 02, 2009
Virtualization is the catalyst with which many enterprises are revamping and consolidating their data centers, and the convergence of networking and the data center represents a key area of opportunity for VARs.
You won't find argument with those points from Gordon Stitt, Extreme Networks chairman and co-founder. But the way in which solution providers help enterprises migrate from physical to virtual and finally to cloud-based data center infrastructures is another matter altogether.
Extreme continues its own makeover. It reworked its channel programs almost two years ago and in November saw the departure of its CEO as part of a restructuring. But Stitt wants virtualization to be top of mind for Extreme's channel partners, and he wants them to consider virtualization a networking problem, not a server one, when designing solutions.
In a Channelweb.com interview this week to discuss Extreme's channel and technology strategies heading into the new year, Stitt suggested that Extreme would continue to upgrade existing products and roll out new ones next year with the idea of creating simpler, scalable virtualization solutions.
"The push to virtualization is really like going back in time in a way," Stitt said "When you had a mainframe, you just threw jobs at it and it got them done -- you didn't worry about capacity. Virtualization is the same way. It dynamically expands to handle those jobs. This is an interesting market."
As Stitt sees it, existing virtualization environments are often overly complex, require extensive professional services and are neither open nor scalable. The move toward virtualizing, and thus making more efficient, the data center is creating conflict between enterprises' networking and server teams and their traditionally separate best practices.
"Our premise is that virtualization is fundamentally a networking problem, not a server problem or a server software problem," he said. "If you look at the edge of the network as we view it today, or perhaps yesterday, the network boundary between edge switch and server has blurred. If server and network administrators are traditionally distinct jobs, you have server administrators who are not quite skilled at network configuration. That's creating conflict in how to manage virtualized data centers. As we move those virtual machines around a network, the locus of control is going to shift."
Extreme's goal is to drive data center solutions that use more carefully considered physical infrastructure with reduced network tiers, have more efficient infrastructure, have more scalable infrastructure that can take advantage of new proposed virtual networking standards like Virtual Ethernet Port Aggregator (VEPA), and can reach the ultimate goal of a totally automated, totally customized data center with open APIs and best-of-breed programs and application integration.
Part of accomplishing that, Stitt said, is creating data center architecture that can support a number of different virtualization software platforms -- including VMware, Citrix, Microsoft and others -- and keeping that architecture open.
"We're in the early part of a new cycle," Stitt argued. "We need to provide users a way to migrate from a physical network through to a virtual one without forcing them to adopt certain technologies and to be able to apply this [way] to networks of any scale. We're letting our resellers choose, based upon their expertise and their understanding, rather than force-fitting them onto a particular vendor's solution for virtual management. The network has to be 'VM aware.' That's something a lot of people are not doing today."
Extreme is wrapping up a difficult year that's seen plenty of consolidation in the networking space and more than a few bumps and bruises for its own business.
For its most recent quarter, ended Sept. 27, the company reported net revenue of $66.3 million, down from $89.5 million in the same quarter a year ago. In late October, Extreme saw the resignation of CEO Mark Canepa and also cut 9 percent (about 70 jobs) of its worldwide workforce.
Sales and channel executive positions, including that of North American channels director Christopher Rajiah, were spared, however, and VARs told Channelweb.com at the time that the changes were not only not surprising, but also in many cases needed.
Bob Corey, most recently Extreme's senior vice president and chief financial officer, has stepped into the CEO role on an interim basis, and Stitt said the search for a permanent replacement continues.
"I've been very active personally in that process. I don't have any announcements to make because we want to make sure we're making the right decision," Stitt explained. "Bob has done a great job taking on the role of interim CEO. And I do want our partners to know that our go-to-market has not seen changes."
Stitt predicted that 2010 will see a continued push by solution providers to add greater data center specialization to their overall practices. He said the number of traditional voice and telephony VARs adding data center competencies for the first time is also continuing to increase.
He added that Extreme would continue to nurture the smaller members of its channel community -- regional resellers, especially -- which to Stitt is a key difference between the channel strategies of Extreme and competitors like Cisco, HP and Juniper Networks.
"All of them are very focused on global system integrators -- that ultra high end of the market," Stitt said. "We're looking for people who can't afford to use IBM Global Services or EDS, who can't afford to spend hundreds of thousands or millions on a data center design. We provide the tools to regional value-added resellers. Our solution is much simpler: it's something that can be started small and grown into."