Extreme Network’s acquisition of some Brocade assets is on hold until Broadcom completes its acquisition of the majority of Brocade assets. But meanwhile, it sounds as if Brocade salespeople are already getting involved at Extreme.
Speaking on its fourth quarter 2017 earnings conference call yesterday, Extreme’s President and CEO Ed Meyercord said, “Three weeks ago we held our sales kickoff meeting for fiscal ’18. We had our global sales organization including Avaya and Brocade teams — close to a 1,000 strong. The energy level was high and it was clear that our new Extreme team is embracing our vision.”
Extreme is buying Brocade’s data center networking assets for $55 million. But the deal is contingent on Broadcom first purchasing Brocade. And the SEC is reviewing that acquisition. Meyercord indicated Extreme would probably be able to close on its Brocade assets in early October.
Extreme also recently closed on Avaya’s networking business.
On the earnings call yesterday, Meyercord pitched Extreme’s wireless LAN assets, along with Avaya’s networking business (including its Fabric Connect technology), and Brocade’s data center networking assets (including its Workflow Composer) as a formidable combination to compete with Cisco.
“Following the close of our Brocade asset purchase, we will summon our position as the number three player in the enterprise market for end-to-end wired and wireless networking solutions,” said Meyercord, according to a Seeking Alpha transcript.
Extreme is estimating a revenue run rate in excess of $1 billion after it closes the Brocade transaction. And it will leverage those revenues “by focusing our technology portfolio on enterprise specific solutions,” said Meyercord. “We can be very prescriptive with our sales teams.”
Taking Aim at Cisco
He said Extreme’s enterprise customers have been highly supportive of this strategy. “They want an end-to-end vendor with better solutions and better service to provide a competitive alternative to Cisco,” he said.
He cited several customer wins in the fourth quarter, where enterprises chose Extreme over other vendors because Extreme offers both wired and wireless solutions.
“We beat out Cisco and HPE Aruba with the Tampa Bay Buccs, another NFL win due to our performance in Super Bowl 51 and the complete end-to-end solution with wired/wireless,” said Meyercord, as one example.
Of the enterprises that have lately chosen Extreme, he said, “They like our vision and focus on the enterprise; they prefer to deal with one vendor instead of four; and they want a stronger competitor who can go toe-to-toe with Cisco in delivering a complete end-to-end solution.”
For its quarterly numbers, Extreme reported fourth quarter revenue of $178.7 million, an increase of 28 percent year-over-year. Its non-GAAP net income was $19.4 million, or $0.17 per diluted share, an increase of $0.07 year-over-year.
Extreme’s stock price rose to about $10.39 today, an increase of about 10 percent from its pre-earnings price.