The acquisition gives Extreme Networks an edge in cloud management and Wi-Fi 6
In some ways, software-driven networking company Extreme Networks’ path to acquiring Aerohive Networks, a cloud-management networking company, began four years ago. That was when Extreme began assessing where its strengths and weakness were, Norman Rice, chief marketing, development and product operations officer at Extreme Networks, told RCR Wireless News.
After establishing that it excelled at providing in automation capabilities and customer intimacy, fueled by its investment in customer service and support, it discovered that one of its biggest gaps was in cloud and cloud management. Extreme’s recent acquisition of Aerohive fills that gap, providing a strong subscription revenue stream and strengthening Extreme’s position in wireless LAN at a critical technology transition to Wi-Fi 6.
“We were looking to give the customer the choice between an on-premises service, which we already provided, and a cloud-delivered system,” Rice said. “[With the Aerohive acquisition], we’ve added not just cloud-managed Wi-Fi right at the time the market is transition to Wi-Fi 6, but we now also have a third–generation cloud management system that is giving us agile software development, allowing us to continue updating and upgrading our software.”
It is only a few weeks into the acquisition and Rice said everything is going well. To avoid market confusion, he said, the Aerohive brand will be rolled into Extreme. “We are rebranding the Aerohive portfolio,” Rice commented. “It will be simple and consistent.”
Extreme has also transitioned Aerohive employees over to the company from two different departments: development and sales. Rice said this is because of Extreme’s interest in maintaining Aerohive’s edge when it comes to agile development and cloud marketing. “We want to make sure that we have not just the cloud technology, but the cloud delivery as well,” he elaborated.
“Prior to the acquisition, Aerohive was selling a wireless access point, and then selling a cloud subscription to manage the system. By combining that subscription model with Extreme’s existing software business, Extreme’s mix of revenues from subscription-recurring revenue should expand to approximately 30%. That mix is healthier and more reliable,” Rice said. “There is more predictability, and you can make more consistent and balanced investments.”
As Rice mentioned, this acquisition has come to fruition right as Wi-Fi 6 is readying itself to disrupt the market. Critically, Aerohive recently delivered the industry’s first trio of Wi-Fi 6 access points, along with the industry’s first pluggable access point, providing an additional perk that Extreme believes will expand its position in the Wi-Fi market.
“While the benefit that resulted from the transition from Wi-Fi 4 to Wi-Fi 5 was incremental, the move to Wi-Fi 6 is going to be exponential in terms of difference,” Rice said. “During the transition from Wi-Fi 4 to Wii-Fi 5, the microchips and devices were not maturing at the same rate as the Wi-Fi technology.”
But, according to Rice, the industry is ready for Wi-Fi 6. “It is happening right at the time your phone is prepared for it,” he said.
Rice said that Wi-fi 6 will provide an end user with a Wi-Fi experience that mirrors what one might expect from a mobile phone experience, but that the real feat of Wi-Fi 6 is how it is designed to support IoT and the modern enterprise.
Despite the clear impact it will have on enterprise, Rice says Wi-Fi 6 adoption is still slow. “Companies are still waiting for the Wi-Fi Alliance to make it official and a lot of companies don’t want to build new infrastructure,” he added.
Extreme, however, is making great strides in the Wi-Fi 6 space. “We made a commitment with Broadcom to be one of the early companies to go out with Wi-Fi 6 with them,” Rice said.
Additionally, Extreme Networks is the official Wi-Fi provider for the NFL, and currently 25, soon to be 28, NFL stadiums use the company’s Wi-Fi or Wi-Fi analytics solutions. As a number of sources have stated, stadiums, which are faced with the task of providing connectivity to thousands of devices simultaneously, are the ideal candidate to demonstrate the benefits of Wi-Fi 6.
“The acquisition of Aerohive and the implementation of agile development are crucial steps forward,” Rice stated, “but we’re not done yet.”
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