In Midst Of Coronavirus, Extreme Networks' Aerohive Deal 'Couldn't Have Come At A Better Time'

'Cloudifying' its product suite has meant that Extreme Networks has the right technology for businesses that are now operating remotely, COO Norman Rice tells CRN.

Networking specialist Extreme Networks has hit a few bumps in the road from a supply chain perspective as a result of the COVID-19 coronavirus pandemic, but its strong cloud portfolio is lessening the blow, the company said.

Extreme Networks last week finished integrating every piece of Aerohive Networks technology into its portfolio, which are now known as Extreme products. "Cloudifying" the product suite has meant that Extreme has had the right technology for now-remotely operating businesses at just the right time, Extreme Networks Chief Operating Officer Norman Rice told CRN.

"From that perspective, this has been a silver lining," Rice said. "When you think about us acquiring Aerohive and expanding cloud across the portfolio, it couldn't have come at a better time."

[Related: Coronavirus Is ‘The Epitome’ Of A Real-Life SD-WAN Use Case]

Extreme said it will continue to expand the number of products that fall under its cloud management platform, ExtremeCloud IQ.

The San Jose, Calif.-based company this week put out a business update on the financial impact of COVID-19 to its financial results for its third fiscal quarter, which ended March 31.

Extreme began feeling the effects of the coronavirus outbreak on its supply chain in early January as certain component manufacturers began closing in Asia, which gave the company time to work with partners to make sure they would have the inventory they would need.

"We thought it would be a $15 [million to] $20 million negative impact for the quarter; however, we were ahead of it and were able to mitigate that risk to bring that number down substantially," Rice said.

Extreme expects that its supply capacity will be at or close to 100 percent by May, but the company still expects some residual effect as business is just beginning to ramp back up now for some component makers. Extreme about three weeks ago also started to see some unexpected disruption in production in Mexico as the country began its own shutdown, Rice said.

While the world seemed to "freeze in place" for a few days in March in the U.S., Extreme then began to see specific buying patterns emerge around remote learning, working and health-care-related use cases, Rice said.

"Overall, we see a lot of projects that have been pushed out as customer sites were busy fire-fighting the rapid move to remote everything to deal with the crisis. At the end of the quarter, we started to see some organizations get back to doing projects," Rice said.

Extreme, with the help of its partners, is transitioning to sell more a cloud-managed portfolio. About 30 percent of Extreme's revenue mix today is made up of valuable recurring revenue, the company said.

"We do anticipate continued disruption for the June quarter, but a lot of things we've done will help us evolve through this," he said. "We want to emerge from this stronger, more effective, and reduce some of the friction some of our partners and customers working with us were experiencing."