Avaya customers as important as technology
Besides technology, Extreme’s acquisition of Avaya’s networking business brought a customer base that Extreme wants to hold. The company plans to keep those customers by honoring all Avaya contracts and continuing to support and service all products.
Catering to Avaya customers is important because Extreme would have had difficulty acquiring them on its own, given the maturity of the networking market, said Jim Duffy, an analyst at 451 Research. “It’s more of a customer grab than any benefit from the Avaya technology.”
Indeed, Extreme has been growing its customer base through a buying spree that started in September 2016 with the $55 million acquisition of Zebra Technologies’ WLAN business. Extreme announced the $100 million Avaya acquisition in mid-March of this year, roughly two weeks before agreeing to buy Brocade’s data center business from Broadcom, also for $55 million. The Brocade portfolio includes switches, routers, and network automation and analytics software.
Extreme’s combined revenue from the acquisitions will reach about $1 billion, according to the company. However, Duffy said he is skeptical the company will be able to grow much larger, given that Cisco, Hewlett Packard Enterprise (HPE), Huawei and other rivals have similar products.
“I don’t see them taking any Cisco share, I don’t see them taking any HPE share, and I don’t see them taking any Huawei share,” he said. Also, Extreme still has to effectively integrate all the technologies it has acquired and demonstrate that it can hold onto the new customers.