Extreme Is More Than Words

It's a partner-friendly turnaround for a company that as little as three years ago was neutral on the channel, said Dan Sibille, senior director of North American channels at Extreme, Santa Clara, Calif. "I was brought in with the specific focus of rebuilding our channel program," said Sibille, who joined Extreme nearly two years ago.

After examining Extreme's existing partner program and talking with solution providers about what they needed to be successful selling Extreme's products, Sibille began a program overhaul that has added a deal registration program, free training and expanded sales and marketing support.

Since launching the new program six months ago, Extreme has increased North American sales through the channel by 10 percent to 15 percent, Sibille said. "It means that the vast majority of business goes through the channel," he said.

The company now has about 575 North American channel partners. This comes after "cleansing a lot of deadwood," which was an effort that pared the vendor's partner ranks down to 300 to 325 partners, and then recruiting back the difference over the past six months, Sibille said.

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The company is looking to channel partners to help revive North American sales. Extreme last week said weaker U.S. sales contributed to declining first quarter revenue, which dropped 14 percent to $83.8 million, down from $97.9 million a year ago.

Several solution providers said they now have closer ties with Extreme, better relationships in the field, growing sales and higher profits as a result of the vendor's reinvigorated channel efforts.

"Our relationship with Extreme has grown tremendously in the last six months and really catapulted in the last 90 to 120 days," said Rick Parker, vice president of sales and marketing at TriNet Systems, Westwood, Mass., noting that he expects the company to do about $4 million in Extreme sales this fiscal year, up from $1 million last year. "A lot has to do with relationships in the field their territory reps don't try to compete with my people."

The vendor's new deal registration program provides extra discounts and ensures that channel partners get full access to Extreme's resources, Parker said. As a result, TriNet has had more joint sales activity with Extreme, including meetings between high-level Extreme executives and its potential customers, he said.

That level of interaction and support from the vendor is essential as TriNet positions Extreme's switches against those from market leader Cisco Systems, which TriNet stopped selling altogether about six months ago, Parker said. "We have to get customers comfortable with [Extreme]," he said.

Solution provider Relational Technology Solutions also is benefiting from a closer relationship with Extreme, said John Babcock, senior vice president and general manager at the Rolling Meadows, Ill.-based company.

"We haven't seen the [profit and loss] benefit yet, but the opportunities we're in front of and the pipeline is stronger than it's ever been," Babcock said, noting that he expects to see financial gains from the new channel program over the next six months.

Extreme's recommitment to solution providers comes as many of its partners are trying to capitalize on the convergence craze, deploying its portfolio of Summit fixed configuration switches and Alpine and Black-Diamond chassis switches as part of broader IP communications rollouts. Extreme counts VoIP vendors Avaya and ShoreTel among its technology partners, with many of its channel partners carrying those brands as well.

But solution providers said they also sell stand-alone data solutions built on Extreme gear, with the new deal registration program helping to build margin in a traditionally profit-lean technology segment.

"There was an internal perception [among our salespeople] that we couldn't make money selling data," said Joseph Fuccillo, CTO of Juma Technology, Farmingdale, N.Y. "Now I see them opening doors by leveraging Extreme's feature set. They see that there's margin to be made." Juma's Extreme sales are expected to double next year compared to this year, he said.

Extreme partners have registered $40 million in deals through the new program and so far have closed about one-third of that business, Sibille said. The program provides an extra eight points on products for deals above $200,000 and an extra four points on deals below.

The vendor also has rolled out a new MDF program to help partners drum up demand. In addition, it has expanded its training program with new online content and is rolling out free technical hands-on training for partners' sales engineers in January, education that previously cost $3,000 to $5,000, Sibille said.

"We've made it easier for partners to embrace Extreme," he said.

Top 9

LAN Switch Vendors

VENDOR
LAN PORTS SHIPPED
LAN SWITCHING REVENUE
SHARE BY REVENUE
Cisco
18,741
$2,559,295
75.2%
Foundry
661
$107,317
3.2%
Hewlett-Packard
2,192
$103,181
3.0%
Nortel
1,262
$101,032
3.0%
F5
N/A
$70,198
2.1%
Extreme
462
$51,987
1.5%
Netgear
11,302
$50,407
1.5%
Cisco/Linksys
6,759
$45,407
1.3%
Enterasys
485
$43,418
1.3%
Source: Synergy Research Group, compiled from company reports from the first half of 2006