Extreme Networks CEO On ‘Serial Acquirers,’ The HPE-Juniper Deal And How Enterprises Will See Extreme As A ‘Safe Haven’

‘With HPE and Juniper, when that deal gets done and that closes, that’s really kind of the new starting line for us. There’s going to be a day of reckoning for everybody. Business doesn’t continue as normal when there’s a fundamental change like that. … And then that becomes a great opportunity to consider an alternative,’ Extreme Networks CEO Ed Meyercord tells CRN.

Networking specialist Extreme Networks’ cloud revenue and subscriptions were on the rise during the company’s most recent fiscal quarter, driven in part by a large enterprise contract win thanks to Extreme’s unique fabric, resiliency, micro-segmentation and security capabilities. It’s for these reasons that the small but mighty networking player is taking share from the largest networking incumbents, Extreme President and CEO Ed Meyercord told CRN.

In fact, the company’s biggest wins right now are coming at the expense of Cisco Systems as the market heavyweight is busy integrating Splunk into its portfolio. While effects of that $28 billion deal will be felt for the foreseeable future, another megadeal that’s sure to change the shape of networking market is the pending HPE-Juniper Networks merger, which will undoubtedly cause disruption and present opportunities for Extreme and its channel partners, according to Meyercord.

A simplistic, one-cloud approach to secure networking is what enterprises are craving if Morrisville, N.C.-based Extreme’s more recent enterprise wins are any indication, Meyercord said. The networking CEO spoke with CRN about how Extreme’s capabilities are helping the company stand out and take share and how M&A in 2025 will impact the market.

Here’s what Meyercord had to say.

How are Extreme’s networking capabilities helping the company stand out in a shrinking market that has been led by traditional networking heavyweights?

One thing that relates to our solution, which is different from everyone else’s, [is our] unique fabric that no one else has. On the enterprise campus, things are happening—let’s take WashU [an Extreme customer]. It’s a whole campus. You have a stadium, you have dorms, academic buildings [and] research facilities. This really diverse environment—indoor, outdoor and changes happening all the time—and we have unique benefits for resiliency. Inadvertently, something always happens where people plug something into the network and it’s like, ‘Uh oh, the network doesn’t like it. It doesn’t recognize it’ or you get network outages. With our solution, the network never goes down. With all these things that happen in the environment, we have what we call ‘sub-second convergence,’ and no one else can do that. The reason why we won a huge Fortune 50 company is that that was important to them, and none of the larger competitors could do it. That was a big deal for us. And again, these are all capabilities in the cloud.

The other thing we have [that helps us stand out] is segmentation. On the campus, we’re able to create networks within a network. An example of this would be the Dubai World Trade Center. Effectively, in their exhibition hall where they have Gitax, which is one of the biggest tech events in the Middle East, within the same network infrastructure for each booth, they can deliver an SLA [service-level agreement] for what they want for network, and it’s different for the booth next to them and for the booth next to them, and they can do this with very few IT staff because it’s so easy to deliver an independent SLA. Hospitals love this technology because at the U Penn Medical Center, a beautiful new facility in Philadelphia, each operating room has its own network. They can say, ‘OK, we’ll just create a network within a network’ and what that means is that if someone were to hack, let’s say, through a medical device, or someone was to go and plug into the network, and maybe it’s a bad actor, you can’t go anywhere else. You can’t start moving laterally throughout the hospital and start looking for patient health information. There’s no lateral movement. We have the endorsement of the FBI that said that the limitation of the blast radius is so powerful from a security standpoint.

We have this micro-segmentation in the data center through a different product, but we have this unique nugget on campus, across the enterprise, that no one else has. So that’s the reason why we’re winning. And then finally, we have this unique capability as it relates to provisioning in a network. Basically, what we’re able to do is build and expand networks, make changes to networks, add services to the network in a plug-and-play environment. In our case, you can provision an access point, say, in a network, and then it calls for the services and they come. So there’s a huge amount of operating efficiency, a huge uplift in security, which is so important, and then a huge uplift in resiliency, which is incredibly important. And all this is automated. When people are talking about automation, security and resiliency, which are the most important things in today’s world, we have unique benefits that are allowing us to move upmarket and to take share. And you’re starting to see that that’s kind of behind where we are, and that’s what’s giving us confidence as we turn the corner and go into next year. Of the traditional networking companies, we’ll be the fastest-growing. We’ll be taking share. Our outlook is double-digit growth. You’ll see that in March, you’ll see it in June. With everything behind us, you’ll look at Extreme as the fastest-growing network [vendor].

How is the new ZTNA offering tying together Extreme’s networking and security story?

We have very mature network access control software that has been out in the market for a long time. Now, there’s an identity-based policy engine that says, ‘[User X], this is what you get access to. We know who you are, we validate and verify your identity, and then we let you in and we give you network access based on your identity.’ It’s where we sort of track and manage your access to the network. What we’ve added is ZTNA [Zero-Trust Network Access] on top of that so now it’s for the remote user. You’re either remote or you’re on campus, either way, we give you access to your applications. And the thing that’s different about what we did, which Gartner calls universal ZTNA, is the network access piece with the application and the access piece was one common policy engine, and in a lot of environments today there are different policy engines. Hopefully they’re the same, but they’re different, so then they have to sync. So, there’s complication around making all of these the same when they’re in different systems. What we’ve done is reduce complexity with universal ZTNA by just having one policy engine so there’s only one for each of us that then drives the security profile for network access and application access across the entire campus. This is where we’re excited. We’ve seen the security convergence with networking and now AI platforms and all these things happening. But from a security perspective, given some of the benefits that I talked about as far as unique capabilities or fabric segmentation, as well as uptime for the network resiliency, and you start combining that with new security and very mature network access, now adding to that common policy engine, remote application access security with ZTNA coming from Extreme.

We [also] have really interesting partnership opportunities out in the security landscape. Because today, Extreme isn’t trying to be all security solutions for all players, which Cisco obviously has this full umbrella, but it doesn’t all work together. I would say now HPE and Juniper are going to come together, and they’re going to try to figure out how to stitch all these pieces together. While that’s going on, we have a really unique opportunity, I believe, to take share in the marketplace.

How will the pending HPE-Juniper deal and Cisco’s acquisition of Splunk alter the networking landscape?

For the channel, I would say two things. There are a lot of partners out there that will say, in networking, ‘I want to have two vendors.’ OK, well now if HPE and Juniper come together, that becomes one vendor, so there’s an opportunity now for Extreme to step in and become that next vendor because there’s a lot of people that don’t want to work with Cisco. There will be a fair amount of disruption in terms of the economics requirements and then the commercials, and then the portfolio, and what does that road map look like? There will be a period of 12, 24, 36 months of confusion and change that will create some opportunity for us. With Cisco’s acquisition, the enterprise network is less important to them. They’re really focused on Splunk, they’re focused on security, and they’re focused on data center. They’re focused on AI clusters. In the meantime, these initiatives, like now you have a choice with Catalyst or Meraki, it’s [still] not one solution and people just want one solution, so we provide a lot of simplicity with a fully integrated technology solution set. In effect, we have become a safe haven for customers and partners and have the highest quality, high reliability, highly differentiated, easier to use and deploy solution as an alternative, and people will look for an alternative.

I’m glad [Cisco] finally figured out they have to provide [the cloud management] option, but you still have to pick one or the other. It still has to work together. And that’s what we’ve heard from analysts and it's what we hear from customers. Despite all of the talk about the seamless network experience, the chorus coming from those customers remains quite loud that it’s too complicated and this is creating opportunities for us to bring simplicity, where you have one cloud—just one—you don’t have to go to a Meraki cloud or Catalyst cloud. You have one. We’re investing a lot in this and stay tuned because we have some exciting things coming on this front, but it’s all about creating a seamless user experience. And this is where we have a huge leg up on the larger competitors.

Is M&A in the networking space creating opportunity for Extreme and its partners?

As the two companies [HPE and Juniper] combine, they’re going to try to figure out how to say, ‘Oh, it’s seamless.’ It’s not really because they have different systems, different data, different user interfaces. For the end user, you can say it’s one because it has the same brand of the company that bought it all, but at the user experience level, it’s complicated and it’s expensive. So, it’s kind of an interesting time for us because I think in the channel, the other thing that happens is you’re a Juniper partner and all of a sudden you’re thrown in the HPE channel, you just got a lot smaller in terms of your relevance and now you’re going to make less money. Now all of a sudden, it’s, ‘Hey, I can make more money with Extreme. They have a simpler end-to-end solution, and it’s very flexible, and it’s an alternative. I have much faster profitability with Extreme and I can differentiate myself from the 10 other partners who are higher than me on the totem pole who are pitching the same solution from the larger vendor.’ So, that’s part of the opportunity that’s going to play out. We really think it’ll kick in when HPE and Juniper close. Right now, they’re in the market saying [everything] is independent, but once it closes, that’s when life changes for everyone, and that’ll get the ball rolling.

Our biggest wins [right now] are coming at the expense of Cisco. These are enterprise customers are saying, ‘I brought in Extreme because I just want to see a different vendor, and just to see kind of what they might bring’ with very low expectations, and then I think there’s an element of surprise, the elements of differentiation in terms of resiliency, ease of deployment, and security. They’re all surprised and I would say they kind of go from, ‘Can they really do this?’ kind of disbelief to, ‘Oh my gosh, this is real, and wow, this makes something so much easier. Why haven’t I done this before?’ Now, Extreme is down to the final two vendors. They didn’t expect us to run as far as we have. And then we win. That’s a really exciting time for us at Extreme. One [such customer] is Korean Airlines who was 30 years with Cisco. They just moved to Extreme. Right now, we’re involved in more and more larger kinds of opportunities. Historically, you might not have seen Extreme playing there. I think, for the channel, it puts Extreme in a very different profile, and you can present a very unique value proposition that you couldn’t present before, which is higher value proposition, better economics for you, and you’re not competing with 10 other people presenting the exact same thing where the people at the top of the food chain have better economics than you so they can offer a lower price.

We’ve had some large wins, [brands like] Kroger, and then it’s continued to evolve. We’re gaining more and more momentum, and I think it will continue along. With HPE and Juniper, when that deal gets done and that closes, that’s really kind of the new starting line for us. There’s going to be a day of reckoning for everybody. Business doesn’t continue as normal when there’s a fundamental change like that. It’s like, ‘OK, what does this mean for me?’ And then that becomes a great opportunity to consider an alternative.

Are you eyeing any M&A activity for Extreme in calendar year 2025?

I’d say we see a larger partnering opportunity than we see an acquisition opportunity. In the security space, there are all the SSE [security service edge] players, and then there’s the SASE players that add SD-WAN; it’s a crowded field, tens and tens and tens of these [vendors]. With Cisco, they have all the different pieces that are not necessarily working together on one platform. No one has one platform that all works together. We have a really interesting partnering opportunity because we’re not trying to deliver every security element. We have partners that are best of breed, and so it creates partnering opportunities for Extreme and actually, our solution winds up being simpler than, let’s say, a serial acquirer that acquires five companies that aren’t integrated. You’re not really just getting one Cisco. You’re getting like eight solutions that are not tied together and it’s complicated. We like our status as sort of being neutral to a certain degree on that front, because we’ve become a very attractive partner.

With cloud annual recurring revenue up 23 percent year over year in first-quarter 2025, how big a bright spot is cloud for the company and its partners?

We’ve been very successful in terms of cloud. We talk about end-to-end cloud management, and we have some unique differentiation in terms of what we can manage end to end relative to the other players, in terms of the cloud choice, cloud flexibility, and subscription revenue continues to grow, so that’s been a bright spot for us. From a financial perspective, it’s taking up our overall profitability and it’s driving our gross margins because we have this higher base of recurring, subscription revenue that’s high margin. It’s growing at a much higher rate than the traditional product revenue. We’re forecasting growth for this year [and] we came in ahead of plan, which was great.

We’ve talked about macro conditions starting to improve. I’d say the U.S. has been ahead of other markets in terms of what we’ve seen in Europe, Germany, France and in the UK, specifically, there’s some specific things there that have been holding them back, but we think that that’s going to loosen up, and we’re seeing that here as well. I think calendar 2025 is where people are expecting, I would say, a more normal resumption of growth, if you will.

How is Extreme’s focus on cloud networking propelling the company toward growth?

We are moving upmarket. We had one of the largest deals in the company’s history, and we have a few more in the hopper here lined up. What’s going on is we have this differentiation. We talk about end-to-end cloud, which means that for enterprises, within our cloud, [we have] our switches that you might see on a campus data center, and then you see those switches kind of down through aggregation and then out to the edge of the network and the wireless edge of the network, and then even across the wide-area network. All of this can be managed from our cloud. And that’s different. That makes us different than our competitors because with our competitors, you kind of have to go into different clouds, if you will, to manage those environments. So, I think the simplicity of that, and the end-to-end [story] helps us.

I just came back from Germany, and we have some really interesting opportunities there. Data sovereignty has become a lot more important in terms of control of your data, and it means that these flexible deployment models are really important. What we’re able to do is, in the public cloud domain, you can run in any cloud. You can also run cloud on-prem; one of our very large financial services customers runs all their bank branches in a private cloud instance that we’re able to support. We’re even able to move the cloud out to the edge, and some of our partners are doing this in Europe where data sovereignty is so important, and so being able to keep data in country or, in this case, in a corporate environment even, is something that we’re able to do that distinguishes us. It’s that flexibility of the cloud.