Extreme COO: Channel Simplicity, AI Demand Fuel Market Share Gains Against Cisco, HPE

Extreme Networks is turning channel disruption into opportunity. COO Norman Rice says a simplified partner program, margin-protection initiatives and growing Platform ONE adoption are helping the company steal share from larger networking rivals.

One of the ways small-but-mighty Extreme Networks is winning share in a networking market dominated by incumbents is by keeping its partner program simple while competitors grapple with channel disruption, according to Norman Rice, executive vice president and chief commercial officer for Extreme.

But Extreme’s growth strategy goes beyond channel program simplicity, as evidenced by the fact that the vendor is outpacing networking market growth. Rice said that’s also because Extreme is helping partners manage fluctuating pricing, ensuring products are available when customers need them and creating incentives to drive adoption of its AI-focused Platform ONE offering. Together, those efforts are creating new opportunities for partners while helping Extreme take market share from larger rivals.

In a recent sit-down with CRN, Rice discussed how the networking vendor is attracting new partners, capitalizing on uncertainty around rival channel programs, helping partners navigate pricing volatility and supply constraints, and expanding usage of Extreme Platform ONE.

Here are excerpts from the conversation.

You’re growing faster than the overall networking market. What’s fueling that growth, and how important are partners in taking share from competitors?

We’ve been executing and continuing to build and grow our market share. Growing at 14 percent in an arguably 8-9 percent market means we’re taking share. Where are we taking share? How are we taking share? Because of the channel. Our channel is our biggest strength in terms of its diversity, its broadness of skills and its reach. That’s the only way we can scale, and we’re continuing to invest in the channel. The way we’re doing that is, as we go upmarket, we become more attractive to a different set of partners, or an expanded set of partners that we work with today, and we want to continue growth with both sides. How do we do that? One is the simplicity of our channel program. We very deliberately took time to rearchitect our entire program. We brought in folks that had built programs at Juniper, HPE and Cisco, and specifically took what was simple and good out of them and effectively reoriented our program.

We’re now in what we call period two with our program. The feedback is resounding. We had a quote from one of our partner advisors [three] weeks ago who said, “This is the best program that they’ve seen in our industry, period, ever.” The reasoning for that is that it’s simple, easy to follow, easy to understand, and easy to understand how they make returns and how they can have something that is dependable and understandable. They understand what the outcome is when they achieve certain objectives. Those objectives are new-logo objectives, product-expansion objectives and so on and so forth. But we’re very, very confident with this program that it is a differentiator for us, and the timing couldn’t be better.

Where is Extreme taking market share from competitors, and why are partners choosing to work with you instead?

The feedback that we get from the confusion in the channel between HPE and Juniper is that those channels are very disrupted today. Having a very simple program that’s straightforward gives partners an alternative or a reason to look at another player. [Also,] being the right size company to do business with. We’re big enough that we have scale and the ability to invest and be a leader in AI [and] be a leader in certain categories, and we’re small enough that we’re malleable to adjust and make changes, whether it be programmatic coverage or on the technology front, so that’s why we’re winning there.

And then, of course, our other biggest market competitor is Cisco, and there’s a lot of confusion taking place about the [Cisco 360] program and we’re capitalizing on that. So, how and where we’re taking share, it’s in partners that have traditionally been working with other competitors that are working with us because of the simplicity of our program, the aggressiveness of our company and, of course, the proven solutions that we’re able to deliver and continue to deliver. So that’s kind of number one. Number two, some of the program elements I think are relevant. As an illustration, we were in a series of meetings in Europe, and out of those meetings we learned from very large partners like Computacenter and others were that prices were changing very dynamically because of what’s gone on [and] supply shortages, largely due to the insatiable consumption that’s being driven through AI, it’s created a lot of different disruptions. So, what we were hearing was that prices were changing multiple times from the day it was bid to the day it was delivered, and a lot of partners were left with the scenario where they had to effectively eat the margin expense, and that hits everybody.

How disruptive have those pricing changes been to partners?

It’s been highly disruptive to a lot of partners. That’s where we first started hearing about it, and on the heels of that, we implemented what we call DRPG, or Deal Registration Price Guarantee.

Our DRPG is: if you quote it today, your price is guaranteed for a period of time. Our current period runs through November 1. We’re coming up on the end of it, but we’ve had this in place for about four and a half months. The objective was to provide stability during a real time of disruption. A lot of prices have increased across our competitive space, but we’ve kept pricing consistent so partners can bid fixed-price projects and understand what their margins are going to be. That’s created a substantial funnel for us, with a number of closed deals, and it’s opened up opportunities with partners we traditionally didn’t work with.

The other aspect of this is product availability. I also lead our supply chain, and I can say we’ve navigated the supply chain challenges around availability very well. We’ve come out publicly and said we have ample supply and are able to fulfill needs. I can point to specific deals. There was an E-Rate project that we lost initially. When the customer and partner received delivery dates of four to six months from one of our competitors, they came back and asked how long it would take us. [Our answer] was two to four weeks. We were able to meet that requirement and flip that opportunity. There are dozens of examples like that happening around the world. Our product availability is excellent. As this situation unfolded, we took proactive steps to avoid what we saw during COVID, when lead times often weren’t backstopped and that’s 0 percent the case this cycle. While there are similarities in terms of scarcity and some of the disruptions on the buying side, this is 100 percent different where every project has a very fixed window for how long it can be on order, delivery dates are guaranteed, and we’re executing right through that and that’s because of our partnership with the channel and the steps we’ve taken to ensure availability. We see this as an opportunity.

The disruptions that are happening today: supply availability, prices moving around and complexity. Those are the three areas we’ve focused on with our channel strategy. That’s why we’re growing at the rate we’re growing and why we expect that growth to continue. Again, size is an advantage for us, not a challenge.

How have you adjusted Extreme’s partner program in this AI era?

For us, it’s all about adoption of Platform ONE. Moving our customers and partners from our on-premises management systems to our cloud platform took about three years to reach critical mass. We’ve already accomplished and surpassed that number in less than a year [with Platform ONE].

We’re at a critical mass. What we learned, and what we’ve done differently, is we packaged the

licensing and then put incentives in the channel and into our own sellers’ positions to accelerate that adoption. Our licensing is designed so customers can move at their own pace. You purchase the Platform ONE license and progress as you’re ready, because there are iterative capabilities and this space is moving very rapidly. You’re constantly exposed to the latest and greatest capabilities, and as those capabilities become interesting to you, you can move between the management paradigm you’re in today and the one you’re trying to build for tomorrow, and we see that quite a bit.

There’s been a big refresh opportunity because of AI. Is Extreme capitalizing on that right now?

Yes. There’s a lot of different things going on within the enterprise in terms of refreshes and why those refreshes are happening. The translation is that more capabilities are being put onto the enterprise, and more requirements are being put onto the enterprise. That’s translating into the requirement for having up-leveled and the latest-and-greatest networking technologies, whether that’s at the access layer, supporting people working from home, people out on campuses, all the way through to the data center and we’re absolutely benefiting from that. The entire industry is benefiting from that.