Extreme Networks Inc. recently held its annual user conference, Connect, in Fort Worth, Texas, where everything is big. In keeping with that tradition, Extreme had its own big news from the show.
Day 1 news involved Extreme being approved for standard power for the 6-gigahertz spectrum for Wi-Fi. This new band was added to Wi-Fi 6E and 7, providing clean spectrum and speeds north of 1 gigabits per second. Extreme’s access points are equipped with the capability for outdoor usage, but customers such as the San Francisco Giants have turned the feature off and are waiting for approval.
Other day 1 news included the rollout of Universal Zero Trust Network Access or UZTNA, which brings together cloud network access control or NAC, and ZTNA to enable the company to deliver zero trust as an overlay to its network and competitive ones. The third piece of news, delivered on day 2, was about AI and the unveiling of Extreme Labs, an incubator for faster innovation and integration with partners. One example is Extreme’s ability to pull telemetry information from Intel network interface cards to improve its artificial intelligence for networking.
The news drew the headlines, but my conversations with Extreme executives, customers and partners highlighted several key themes. Here are my top five:
AI for networking: close but not ready for prime time
Like all industries, AI has been the talk of the town for networking for the past two years. The launch of ChatGPT made people think about what’s possible if one brought generative AI to networking. If a user was having problems with a Zoom call, a network engineer could ask the system why, and, like magic, the answer would be revealed with a possible solution.
Though the vision is excellent, the reality is customers are just starting to dip their toes into AI for networking. During a customer panel at Extreme Connect, theCUBE Research analyst Bob Laliberte asked the three customers if they were using AI with network operation. They stated they are looking at it but have yet to roll it out. One could argue that a sample size of three isn’t all that big, but this is consistent with feedback I’ve had with IT pros – not just in networking but also in security, collaboration, contact centers and every other area.
Make no mistake, AI is coming to information technology organizations, and when it starts, I believe the ramp will be quick, but companies need to experiment with the systems and learn from them, which builds trust and then utilization. The reality is that IT pros are drowning in complexity and need AI to simplify their jobs, but there is an experience chasm that needs to be crossed.
The messy product work is now behind Extreme
Extreme’s portfolio is built on a collection of products from several acquisitions. The company had its own products but has added infrastructure from Enterasys, Avaya Networking, Brocade, Motorola, Aerohive, Ipanema and others. It did this over just a few years, and the engineering team has been busy rationalizing hardware and software. It appears this work is now behind the company, and it now has an enterprise networking that can go toe-to-toe with any of its competitors.
One of the interesting differentiators for Extreme is its “Universal Hardware,” where customers can deploy a switch or access point and then manage it using the cloud. If, in the future, the customer wants to bring the data into a private cloud and switch the management model, they can do so without having to change hardware.
Integration, rationalization and product issues have held the company back, as it has had to manage the roadmap and upgrade path with customers and partners. Most of the hardware is done, and the company can now look forward versus trying to manage the historical install base.
The network fabric is Extreme’s best-kept secret – but it needs it not to be
When Extreme acquired the networking assets from Avaya, it inherited Avaya’s shortest path bridging-based network fabric, now known as Extreme Connect Fabric. SPB was developed about a decade ago to simplify networks and solve some of the limitations of the Spanning Tree Protocol, such as slow convergence, blocked links, and box-by-box configurations.
The network is configured at the edge, and updates are made dynamically across the fabric. This results in a less complex network with improved performance that is significantly easier to run.
One of the challenges for Extreme with Fabric Connect is that it is a much different way of running a network. Some customers I talked to were skeptical that the solution would bring the benefits that Extreme articulated. However, once customers move to the fabric architecture, they stay with it. I’ve talked to many customers who use Extreme’s fabric, and they all rave about the product.
Extreme needs to highlight these customers and quantify their benefits to obtain more proof of concepts, which will lead to more deals. Extreme Fabric Connect has been described as a “best-kept secret,” but the goal should be for the value to be well understood by the industry.
Extreme is the king of complex Wi-Fi
Of all the different network domains, Wi-Fi has been the most difficult for vendors to get right. It’s not a technology issue but rather a deployment one. We have all experienced bad Wi-Fi where you’re connected but it’s not working well. This happens at stadiums, conference centers, airports, hotels and other places where traffic is unpredictable.
I’ve talked with CIOs from facilities with bad Wi-Fi, and they explain that the proper level of planning wasn’t done to deliver consistent, great performance. Wi-Fi in carpeted offices can be somewhat cookie-cutter, but that’s not the case with stadiums, schools and conference centers.
Over the years, Extreme has developed a reputation for doing complex Wi-Fi better than anyone. It’s used in many of the old, iconic stadiums, such as Fenway Park, Wrigley Field, Old Trafford Stadium and Lambeau Field. These facilities were not designed with Wi-Fi in mind and require a tremendous amount of pre-work, and Extreme has mastered the art of complex. If it can do those, the business should feel confident it will work in more traditional environments.
Security is poised as the growth area
Extreme has a strong network portfolio and is a Gartner Magic Quadrant leader. However, many macro issues are causing companies to delay network purchases, so even if Extreme takes share, its ability to grow is limited. Today the company announced its quarterly results, posting revenue of $211 million, slightly ahead of expectations but down 36.5% year-over-year. As the network industry recovers, so too should Extreme, but accelerated growth requires an adjacent market, and security is it.
As mentioned, it announced universal UZTNA, which complements its SASE offering. Right now, Extreme is selling security through its network channel. The goal should be to continue building network-centric security products, post some lighthouse wins and use those customers to validate its strength in security.
On the company’s earnings call today, Chief Executive Ed Meyercord (pictured) called for a return to growth by fiscal year 2025. “At Connect, sessions on zero trust drew standing-room-only crowds,” he said. “When added to our unique Fabric, this allows us to present a highly differential security value proposition.”
Summary
While the network industry is crowded, Extreme Networks is the only one that’s an enterprise pure play. The company has a strong network portfolio, and many major customers chose it because of its focus. Kroger was on stage and talked at length about Extreme’s willingness to partner with him to help the retailer meet its business goals.
Looking ahead, Extreme needs to continue to lead in Wi-Fi and develop its AI and security solutions.It must also exercise a degree of patience while the macro issues that are plaguing networking today subside.
Extreme Connect was a good event that featured product innovation, strong customers, channel partners and a glimpse of the future. Now that the product integration issues are out of the way, it’s time to step on the execution gas.
