It's been about 15 months since Extreme Networks completed the acquisition of Enterasys Networks, a move that bolstered not only Extreme's financial heft, but widened its switching line and beefed up its wireless LAN capabilities.
Extreme CEO Charles Berger gave IDG US Media Chief Content Officer John Gallant an update on the progress of integrating Enterasys's technology and discussed how software-defined networking is reshaping the industry. He also discussed how Extreme's work on in-venue wireless with NFL teams and others will benefit all customers.
What has the company accomplished since acquiring Enterasys and how is what you're bringing to market different?
The change for Extreme versus where we were prior to the acquisition is pretty dramatic. The most obvious impact is that we're a $600+ million company now, which puts us in an entirely different league in the Ethernet networking space. We just had a presentation by Dell'Oro [Group, a research company] where they break the market into three groups of companies; HP and Cisco as the market share leaders, ourselves, Dell as the other relevant companies and then the third is the other half-dozen [companies] who don't really matter. So scale was important.
Second, [the acquisition] completed the product line for us. We were not productively active in wireless. We think wireless will become ever more important as mobility rises and Internet of Things explodes. We're the only one beyond the two or three majors that have the complete wired from the core; the data center out to the outdoor access points and everything in between. It brought us NetSight, which manages the complete range of switches. Then finally it brought some key infrastructure around sales and marketing that we had not invested in at Extreme. It also brought the challenge of integration which is now mostly behind us. Our customers would tell you they see an entirely different Extreme than they did 12 or 14 months ago.
What did that integration entail?
A:First of all, as with most things it starts with people. We had to integrate two pretty dramatically different engineering cultures which, in many ways, did the same thing but came at it from a different approach. We've succeeded in integrating the teams, driving against a merged fixed-switch product line where we're bringing everything under XOS [the ExtremeXOS operating system] and moving towards a single product offering around the next generation of Extreme fixed switches. We've just released our X460-G2, for example. But [we're] continuing the S and K modular class and the operating system to run those for customers who want the advanced policy capabilities, network access control capabilities and what NetSight brings to the party. So we've merged or are in the process of merging the fixed and stackable lines, but for the foreseeable future we'll maintain the legacy Extreme and legacy Enterasys modular switches and the operating systems that support them.
You mentioned the Dell'Oro report and that touches on a key question. You have giant providers like Cisco and HP in the market, along with more recent entrants like Arista Networks. Help customers understand Extreme's position compared to companies like those. What are the differentiators for Extreme?
You're certainly right that the landscape is changing dramatically. You've got HP breaking itself into two companies and Juniper backing away from the enterprise marketplace.
We've always been known as a product company - products meaning high-performance Ethernet switches, very high-performance wireless capability (as our NFL and other venue relationships demonstrate) and an extremely robust SDN-ready operating system and now an SDN. [That's] a truly open and standards-based SDN strategy allowing brownfield as well as greenfield opportunities as opposed to our competitors, who want to lock you in even further with SDN and require forklift upgrades to your hardware infrastructure in order to get the benefits of their version of SDN. We think that is 180 degrees away from what the market wants from SDN. Then finally, exceptional customer care. When you talk to our customers about why they buy Extreme, in nearly every case the top of the list or the number two thing on the list behind technology is the fact that we pay attention to our customers, we give them exceptional service and support which our competitors are not known for.
From your perspective, how aware and open are customers to SDN at this point? Also, what differentiates your SDN strategy from competitors?
I can tell you it comes up in virtually every customer discussion. If you're in the business of providing networking for your enterprise, you've obviously heard about it and you obviously feel pressured to understand it and understand how it's going to affect your enterprise. It is a hot topic and it is starting to have impacts in the market. You've seen it in large service providers and hyperscale computing centers. Hopefully, you saw our recent announcement with Microsoft Lync and our plan to provide access and better quality of service to Microsoft Lync through our open SDN controller and our normal APIs. We see this as the beginning. It's still relatively nascent but it's certainly top-of-mind for everybody.
As far as what makes us different, it's what I mentioned a few minutes ago, the fact that we are using OpenDaylight as a standard for our controller, which we will harden and add features to very much in the Red Hat Linux model. Also, the fact that we've already shipped 12 million OpenFlow/OpenStack-enabled ports which means our installed base or anyone who has OpenStack can take advantage of our SDN applications. Being open as opposed to being proprietary is one of our biggest differentiators. I think the other is the network of technology partners that we're pulling together, including VMware, Intel, Microsoft and others who are either deploying SDN with us and/or developing applications to run on top of our version of SDN.
I want to go back to the first part of that question. When do you see rank-and-file corporate customers beginning to make the move to SDN?
I think things like our relationship with Microsoft Lync will help accelerate that. I am reminded of a breakfast we hosted with analysts last year at Interop. My final question was exactly the question you just asked. We got a range of seven to 10 years. I suspect if we asked that question [now] that range might be brought in a little bit but I still believe this is mainstream several years down the road. But customers want to know that they're buying from vendors who have a story that lines up with what they want to see happen with SDN.
What are the key market drivers that you hear when you're sitting with CIOs and other network buyers? What are the key things that they're looking for from network companies today?
I believe we have been citing a survey done by IDG that the number one thing that CIOs and heads of network architecture administration want is better visibility and better control of their network and, of course, beyond that the rest of their IT infrastructure - using that data to provide better solutions for their customers, their internal customers. [Using] Purview, we enable NFL [teams] to far improve their fan experience and, ultimately, a fan who is engaged in an application or engaged in communicating with the franchise and its vendors ultimately leads to more business. That starts with having visibility and control over your network. I think that is what people want to see mostly from SDN. If you look at our architectural block diagram we have sitting on top of XOS, our NetSight Network Management, again from the core of the data center to the access layer, providing visibility and manageability. Purview is providing analytics across that same span on application performance and application usage and our network access control. Embellishments of those key functionalities, I think, is where you'll see applications developing on SDN first and most pervasively.
Talk more about your Purview product. It seems like a bit of a Swiss Army Knife. It's security, it's management, it's business analytics.
Purview plays a number of roles for us as you point out. But really the biggest and most important role is allowing the venue or the enterprise to really understand, first and foremost, what applications people are running on their network and secondly, how well they're performing. I happened to be at last year's  Super Bowl and the Purview data supported my user experience, which was that four out of six times I couldn't upload. I timed out before I uploaded what 85% of the people are on the network to do, which is a Facebook post or an Instagram post of a selfie or Bruno Mars from Row 200 so that all their friends know that they're at this status event called the Super Bowl. We surround Purview with other products like Network Access Control and NetSight for management. Again, I think those will migrate to SDN applications as SDN evolves over the next few years.
You mentioned some of the things that are driving the wireless market. What moves are you making to enhance your position in wireless?
Again, I've seen data from IDG and presentations that you and your compatriots have made at events for us about the explosion in mobility and mobility being one of the four key pillars of IT. We see that happening all over, [especially] in some markets that we're particularly strong in - K-12 and higher education and healthcare. Mobility is increasing in [importance] in those types of enterprises every single day. If I'm a doctor in a hospital, I probably don't even have an office so I don't have a place where I can plug into a wired infrastructure. Yet HIPAA and other laws are increasingly requiring me to maintain and create all of my patient records electronically. On top of that, there is increased tracking of patients. I was just in the hospital with my father, who is now doing well, but every pill -- and there were a lot over the week that he was there - was scanned. Every time a doctor or nurse practitioner visited him it was recorded and that all requires a wireless infrastructure. That's in building. If you look at out-of-building, the NFL is one of many types of venues where there is a strong motivation to enhance the fan or guest experience and in doing that creating additional revenue opportunities. We see that happening more and more as you think about theme parks, hotels, cruise ships. We think the field is just beginning to evolve. There are still a whole lot of unserved stadiums, particularly in the Division One colleges, and beyond that, internationally as well.
You clearly have strengths in that higher education market and in the entertainment/athletics markets. Where do things stand in pursuit of the mainstream corporate market? How are you faring in your day-to-day battles against the likes of Cisco?
I think our key strategic asset is our 12,000 customers and those customers range from a handful of Fortune 100 customers to a very wide range of customers in what I would call the mid- to small- or large enterprise marketplace where our technology, ease of use and customer care really provide us a strong differentiation, whether it's against Cisco or HP or any of the other vendors.
What do you see for the coming year? What should people expect from Extreme in the months ahead?
We completed at the very end of calendar 2014 the upgrade of our executive staff with the addition of three new sales executives, Jeff White to head Worldwide Sales and Marketing, Stephen Patak here in North America and Bob Gault to head our Global Channels. All of those are aimed at helping us grow revenue and perform better in our sales operation. We will only do that if we provide more value and better service to our customers. The three of them and the rest of our executives in the field continue to bring great information back. It's why we started investing almost the day I arrived at Extreme back in May of 2013, insourcing service and support and making that a positive not a negative differentiator. We're going to continue to invest in the technology. Our SDN team has incredible leadership with several people who left Cisco in frustration because they didn't believe the proprietary, closed, forklift-oriented approach to SDN was what the market wanted or what they wanted to be part of developing. We will continue innovation around the products as we continue a pretty hefty pace of bringing the next generation of products to the marketplace, upgrading Purview, upgrading NetSight and being ready to evolve SDN as the market is ready to use it.
Are there other announcements or other key things going on at the company that you want people to know?
We were proud to have three of the four teams in the NFL Conference Championships and two of our teams won and the one who did worse was not our customer, so we're sure there's a high correlation there.
I'm assuming that's the Colts. They're not a customer yet?
Not yet. We're working on them.
Now you have a perfect opening when you talk to them about their performance there.
It always gets a chuckle from the audience. The important thing about the NFL, just to maybe carry that one step further, that it and other venues are going to be important customers for us but far more important is the proof point that they offer for the broader enterprise market and the learnings we get from that marketplace of how to perform in what's frankly the toughest of environments. That allows us to do even better and more economically in the less challenging environments.
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