Is Extreme Networks the next networking giant?

By Saheli Sen Gupta Apr 13th 2017
Is Extreme Networks the next networking giant?

With acquisitions of over USD 200 million spanning over less than a year, Extreme Networks is becoming a serious contender in the market.

The day Extreme Networks makes it to the top of the food-chain, historians will say it began in September 2016. With three very powerful and strategic acquisitions, the company is set on a path of becoming one of the major networking players.

The first step the company took was to acquire Zebra Technologies in an attempt to fill in the gaps in its own wireless network portfolio, for USD 55 million.

The acquisition added Zebra’s AirDefense wireless intrusion prevention system to Extreme’s wireless LAN security. This will enable it to deliver 24×7 wireless monitoring to help IT identify any attacks on their network and vulnerabilities, to terminate the connection to rogue devices. This acquisition is expected to generate an additional USD 115 million in revenue for Extreme.

Post this acquisition, the company’s shares soared 18 percent and reached USD 7.51 per share on March 31. Currently, it stands at USD 6.98 per share.

This buy narrowed the already condensed environment of LAN vendors, with HP buying Aruba and Brocade buying Ruckus.

Extreme followed it up by shelling another USD 100 million in March 2017, when it bought the networking division of Avaya, which was bankrupt at the time. However, this business deal is still not complete as it is subject to regulatory approvals and customary closing conditions, which is expected to be resolved within the next couple of months.

Merely days after, Extreme announced its decision to buy Brocade’s datacenter networking business for USD 55 million. With this deal, Extreme expects to reach over USD 1 billion in revenues for fiscal 2018, beginning on July 1. With all three deals, the company claims to have a complete datacenter, core, campus and edge networking portfolio.

From its deal with Brocade, Extreme will benefit from the company’s VDX, MLX and SLX switches and software such as Flow Optimizer, Workflow Composer, StackStorm and virtual network packet brokers.

Post this acquisition, the company’s shares soared 18 percent and reached USD 7.51 per share on March 31. Currently, it stands at USD 6.98 per share.

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