Extreme Networks, which has been pulling together the various pieces of what would become its Infinite Enterprise strategy through acquisitions and in-house innovation over the past eight years, is bringing aboard software-defined WAN (SD-WAN) and more network security through its planned $73 million acquisition of Ipanema.
Once the deal closes – which is expected to happen in October – it will bring SD-WAN and secure access service edge (SASE), two key networking segments at a time when the IT environment continues to become more distributed, into Extreme’s universe. In addition, having Ipanema will expand Extreme’s reach in Europe and create a second technology center of excellence on the continent.
Ipanema is the SD-WAN division of Infovista, a network management and application performance company. Ipanema’s SD-WAN and SASE capabilities dovetail well with Extreme’s Infinite Enterprise initiative, a strategy that Extreme unveiled at its user conference in May and that aims to address the increasingly expanding nature of organizations. Businesses are growing beyond the boundaries of their data centers and the COVID-19 pandemic has only accelerated this trend, according to Calvin Rowland, senior vice president of software-as-a-service (SaaS) at Extreme.
“It used to be you had networks that were organized around centers – you had cities, you had schools, you had institutions, etc.,” Rowland told Enterprise Networking Planet. “But networking has changed. Connectivity needs to happen everywhere for everyone. You need to meet people where and when and how they want to be met and oh, by the way, they have the expectation that everything works perfectly and exactly the way that they want it. We talk about delivering on this phenomena that is the Infinite Enterprise. It’s everywhere all the time. Internet distribution, a consumer-centric orientation and delivering it at scale, that’s the vision. We’ve done a lot of innovation and acquisition over time to deliver on the promise that is the Infinite Enterprise.”
Also read: Transitioning to a SASE Architecture
Extreme’s Key Acquisitions
Extreme made its first significant acquisition in 2013 when it bought Enterasys in a move that brought more secure networking capabilities. Since then, the company has made a series of acquisitions that involved mobile networking (Zebra Technology in 2016), fabric networking and data center networking (Avaya’s and Brocade’s networking businesses, both in 2017) and cloud networking with Aerohive in 2019.
Extreme also has built out its ExtremeCloud portfolio. Ipanema will enable the company to add cloud-managed SD-WAN and security capabilities to its offerings.
“For us to be able to continue to deliver on the ideal that is the Infinite Enterprise, we needed to make an acquisition like we did with Ipanema, with SD-WAN,” Rowland said. “It’s an accelerant for us to be able to fulfill what it is that we’re trying to achieve for a customer benefit with the Infinite Enterprise. So that’s the high level. It was another milepost of consequence in this journey that is delivering that vision for our customers.”
SD-WAN, SASE Growing Fast
SD-WAN and SASE, which is essentially the bringing together of WAN and security and delivering them as a cloud service, are fast-growing segments of the larger networking market. IDC said the SD-WAN market jumped 18.5 percent year-over-year in 2020, to $3 billion worldwide and the analyst firm expects it to grow 18.9 percent a year through 2025. The global SASE market will grow about 30 percent a year between now and 2025, when it will hit about $10 billion, according to 650 Group.
According to a report by Versa Networks released in June, the pandemic – and the resulting rapid transition to remote working – only accelerated the demand for SASE. Ipanema will help Extreme address that demand.
“Ipanema’s cloud-managed solution automatically and dynamically adjusts application traffic flows based on real-time network conditions, which increases performance and improves quality of experience for end-users and delivers savings for the business,” Extreme CEO Ed Meyercord wrote in a blog post. “We plan to expand upon these capabilities to establish an infinitely distributed (SD-WAN) and secure solution within the ExtremeCloud portfolio. This added flexibility, capability, and security when connecting locations, applications, and devices, will enable us to provide the best possible experience” to customers.
Also read: The Home SD-WAN and SASE Markets are Rapidly Expanding
Framework Brings in an Ecosystem
A key to what Ipanema brings to Extreme is a framework that encourages partnerships and an ecosystem, Rowland said. He pointed to Ipanema’s relationship with security solutions provider Check Point Software as an example of an important partnership that Extreme plans to continue.
“Nobody out there – regardless of what they say – is going to be able to give you all of the capabilities for a vision like that,” Rowland said. “The vendor or vendors of consequence are the ones that understand that there’s a coalition, an ecosystem that’s required to deliver on that promise. That’s part of our strategy for some time. One of the lovely things about Ipanema is they bring their own security framework to the table to be able to deliver best-of-breed security capabilities should customers choose a bespoke approach.”
There’s a lot to like about Ipanema from Extreme’s perspective, he said. The portfolio is cloud-based, the company’s culture is similar to Extreme’s and it brings with it a lot of talented people. Extreme officials also expect to leverage what it’s learned from other acquisitions, such as the Aerohive deal.
Aerohive had “excellent technology where they really hadn’t necessarily kicked into high gear or even low gear with their go-to-market [efforts],” Rowland said. “This is something that we’re good at and this is something that we can bring to the table. Having done it quite successfully before with Aerohive – we are the fastest growing cloud-networking [vendor], number two in market share, more market share than number three and four combined. We’ve hit on a formula and we have confidence that we will be able to do the same thing with Ipanema.”
Strong Numbers for Extreme
The deal also comes at a moment of strength for Extreme, which has more than 50,000 customers. The company late last month announced that in 2020 it for the first time surpassed $1 billion in revenue, bringing in 6 percent more than in 2019, and that in the fourth quarter, its revenue grew 29 percent year-over-year, to $278.1 million.
In a statement, Meyercord also said that Extreme saw a 36 percent jump in bookings growth in the fourth quarter and that the company’s new cloud subscription books increased 111 percent.
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