Extreme’s Ed Meyercord: ‘When You Look At Extreme And The Simplicity Of Doing Business, We’re The Best Choice’
The networking specialist’s CEO shares how Extreme Networks is coming for Cisco with its universal hardware and singular cloud management platform, the big brand names it now counts as customers, and how the company is hiring when its competition is ‘firing.’
Coming For the Competition
Networking specialist Extreme Networks is “upleveling” in two ways: It’s going up against competing vendors such as Hewlett Packard Enterprise, Juniper Networks and longtime rival Cisco Systems and winning in the market, and it’s also nabbing bigger deals with some of the most popular brands in the U.S. with the help of partners.
Both of which Extreme plans on getting much louder about, Extreme President and CEO Ed Meyercord told CRN.
Morrisville, N.C.-based Extreme Networks last week announced its fiscal full-year 2023 earnings in which the company posted revenue of $363 million for the fourth quarter that ended June 30 and $1.3 billion for the full year, which was up 18 percent compared with fiscal 2022. The company shared that it had 30 percent growth in deals valued over $1 million, demonstrating that it is not only taking share from its competitors but it’s also courting larger enterprise customers with the strength of its own brand.
Extreme has spent the year investing in its differentiated cloud networking platform and universal hardware to provide choice and simplicity for customers, a strategy that’s winning and will carry into fiscal 2024. And while the tech industry, including fellow networking companies, have been issuing pink slips, Extreme had record hiring in the last year, Meyercord said.
Meyercord sat down with CRN at the end of its fiscal 2023 year to talk about the company’s growth compared with the competition as well as the new consumption-based managed services platform that’s starting to roll out to select partners. Here are excerpts from the conversation.
How is Extreme Networks growing at a time when some of the competition in the networking space is not?
The headline is the upleveling of Extreme. We’re really breaking into a different tier of business. So, what you’re really seeing is we’re winning out in the marketplace, and I’d say the elevation of Extreme’s game is one way I would think about it. [In our 2023 full-year earnings posted on Aug. 2] we talked about the volume of deals that we’re doing over $1 million. Overall, year over year, that’s 30 percent. Revenue for the year happens to be [up] 31 percent. On a bookings basis, in terms of what we’re selling in the market, we’ve just seen Extreme breaking into bigger accounts and winning.
When we say “One Extreme,” what we set out to do was we wanted people to just wrap their brain around the complexity of managing licenses. Our competitors, they’ll have a different price for the same license for every piece of hardware in the network. If it’s an access point, or if it’s an edge switch or if it’s an aggregation switch, they all have a different price. And then within the license, they’ll have tiers. So now you have different prices, equipment, you have different tiers, and how you deal with all the termination, renewals, subscriptions—it gets really complicated. In most cases, you need at least one human to try to sit there and try to sort through and figure it out. Usually, [businesses] have teams, the higher up you go, just to manage your licenses. Well, we came out and said, ‘We want the simplest licensing platform in the industry. One price, all network devices. They’re transferable. None of our competitors’ licenses are transferable. They’re poolable—if you’re not using them, you can sort of put them in a pool and then reassign them.
We’re also coming out with the industry’s first consumption-based billing platform with our MSP platform that we’re building, which is the most advanced platform. Why? Because it’s the simplest. It’s the one network, it’s the one cloud, and it’s one interface for everything. Whereas if you want to drive an MSP business with our competitors alone, you have to have hooks in multiple clouds to try to do so. So, it’s the networking solution, it’s the commercial terms of our offer, and it’s all playing out as we continue to move up in the marketplace.
How is Extreme’s strategy setting the stage for it to take share from competitors?
We’re becoming a much stronger competitor in the marketplace and the evidence is in the market share. Analysts look at our growth and they [say], “OK, based on what we’re seeing, you’re growing at least twice the market.” And the reality is we have sized up the market years ago [by] looking at how we make our mark and really come in and be disruptive. Now, we’re being disruptive by being simple, easy to use and easy to deploy, and delivering tools that make it easier to deliver a networking experience.
If we look at One Network, we have universal hardware from the campus enterprise, out to the edge of the enterprise, the wireless edge, across the wide-area network—it’s one consistent set of high-quality hardware platforms. We have a fabric that is built for campus environments and distributed environments. All of our competitors have a data center fabric and are designed for a static environment. Our fabric is designed to the campus, which is a dynamic environment. So you take this end-to-end, seamless, high-performance hardware, it’s the most flexible—and remember, when you buy a box from Extreme, you can download multiple personalities from the cloud. None of our competitors can do that. And then you have this fabric that allows you to upgrade the entire network with a few commands to the fabric. In other words, all the different elements inside of a network can be updated with one command that automatically upgrades all the different networking elements—none of our competitors have that. So if you’re making a policy change to a network, for example, it’s so much easier to make changes and this is something that happens all the time in a campus network. It’s different than a kind of a static IP fabric, data center-type application. Our competitors take those fabrics and they’re trying to push down into campus. But it’s hard to use, it’s complicated. It’s literally one cloud with Extreme. All our competitors, it’s multiple clouds, multiple interfaces that you’ve got to work with to deliver a similar outcome, which means more complexity, more licenses—it just becomes more work. [With Extreme], you can choose which cloud you want to reside in and where you want to host your native instance. You can be on-prem[ises] like PNC Bank, you could be in Google Cloud like Major League Baseball, you could be in AWS like so many of our K-12 and higher-education customers. We offer that choice. We also have the industry’s only multidomain cloud. This is kind of a sweet victory for us when the largest competitor in the industry has a split personality. On the one hand, they have a Catalyst portfolio and DNA Center, which represents that complicated software suite and multiple interfaces that not many people use that they have to pay for. The other side, you have Meraki, the cloud solution. [Customers] realize Extreme’s cloud has visibility into, and can manage, Cisco gear. We can see Juniper, we can see HPE, we can see all our competitors’ gear. I mean, it’s a little embarrassing. So now, think about an environment where if you’re going through a network migration, it’s so much less risky, so much less complicated, because with Extreme Cloud, you can see the whole environment and move at your own pace. We also have these native AI and machine learning tools, enhanced visibility to the network. We can prompt you on things that are going on the network, you don’t have to go find them, we find network issues before they happen. It’s much more efficient and easier to deliver that networking experience.
How are partners helping to drive the customer growth that Extreme is seeing?
We’re doing a better job of building the brand through our partners and customers. The customer doesn’t realize every time they get a FedEx package, it’s run through an Extreme network. If you buy a stock, the NYSE runs on Extreme, or if you have to get in an airplane to fly to a wedding, you’re effectively being run by an Extreme network because the FAA runs on Extreme. Say you go on vacation to France, and you go to the Louvre or the Musee d’Orsay—all of those tourist attractions, they run on Extreme. Ever heard of Volkswagen? They run on Extreme. Samsung’s global headquarters? Extreme has been selected for all their battery manufacturing plants worldwide. The National Football League? Who’s your team? They run on Extreme. Major League Baseball, the NHL, they run on Extreme.
Oftentimes, because of our size, people might not know that so there’s this sort of ‘Did you know?’ campaign brand elevation and that’s really gaining traction. It’s really resonating with our partner community, and I think it’s giving us wallet share with the channel and the channel is seeing wins. Oh, by the way channel partners, you can make more money working with Extreme than you can with Cisco. Every time you enter into a project, or you have an opportunity, you’re not necessarily running into other Cisco resellers. More and more people are aware of these big wins and that we’re moving upmarket. The brand elevation is also happening in terms of the kinds of customers that we’re serving [and] the brands that trust Extreme, that you trust every day in your life. When you look at the universal hardware platform, the quality and the performance, our fabric, the capabilities of making changes on the fly, the cloud orchestration, the capabilities of our AI and ML tools, the automation and the integration, and then you look at One Extreme and the simplicity of doing business, we’re by far the best choice. The biggest issue we have is that the biggest competition is sort of an entrenched, old relationship. But if you’re actually looking at the technology on its merits, and you’re looking at the easy solution and cost of doing business, you’re giving a sort of honest assessment, then yes, we win hands down. It’s us breaking through the old relationships. We’re starting to do that with these wins, and people are realizing they can make money with Extreme, especially in the channel.
How will the new MSP platform help more partners develop a consumption-based managed services practice?
Internally, it’s our workspace that we’ve developed. It’s a platform that truly goes back to the simplicity element. Consumption billing from a licensing perspective and then one platform to interconnect with the entire network, universal hardware, fabric [and] our [Extreme] Copilot, our AIops engine. If you’re an MSP in the channel and you have your own interface for selling security, voice and other categories, this interface is by far the simplest platform by a mile in the [networking] industry. Why? Because if I do HPE, I have to hook into [about] 10 different clouds, 10 different platforms. In ours, it’s one platform. And that’s going to be coming. We’ve launched with five partners and then we’re going to be stepping this up by invitation only. There’s a lot of demand and we’re going to open up to another five [partners] in the fall and then another five in the winter, [etc.] The platform itself will stand alone. In other words, it’s obviously multitenant, but it will stand alone in terms of being able to manage the billing and managing all the licenses that are poolable and the consumption billing model from our workspace tool. So, if you’re a channel partner and you’re contemplating the managed services approach, you can actually deliver the networking managed service from our platform.
Where are you placing your bets in fiscal 2024?
We’re doubling down on our fabric and our cloud. These are the main differentiators. And a lot of this is really, we need to talk about this in the marketplace because we really need to drive home the differentiation. I think we’ve done a good job of explaining what we have. But we haven’t really done a good job of comparing and contrasting it to the alternatives in the marketplace. So, we’re really going to be hitting hard on the competition. The other thing that you’ll see in terms of where we’re actually placing bets—we’re making big bets on MSPs. We’re also enabling our entire portfolio to be cloud-managed. There’s a lot of investment going in there. And then we’re making a big investment in certifications. We’re opening up federal opportunities. We’re opening up opportunities in state and local where they have these certification requirements. We’re moving very quickly and we’re making investments there. A lot of these certifications cross over international boundaries, NATO countries, etc. So, this is going to help us a lot.
The good news for us is our competitors are firing and they’re having layoffs and we’re hiring at record rates. Our attrition is at an all-time low. We’re able to hire people more quickly, and we’re hiring for growth. We’ve actually had record hiring, so we’re kind of different from the rest of the industry.