Extreme Networks wraps Brocade data center networking acquisition, sets $1B revenue path

merger and acquisition

Extreme Networks has wrapped its acquisition of Brocade Communications’ data switching, routing and analytics business lines, completing a trio of deals that the company says puts it on a path to achieve $1 billion in annual revenues.

By acquiring Brocade, Extreme can complement its well-founded Ethernet switching business line with a complementary line of data center solutions that have been adopted by a wide array of enterprise and service provider customers that are transitioning to a software-centric model.

Ed Meyercord, president and CEO of Extreme Networks, said in a company video that the Brocade acquisition reflects the transition of company’s strategy of selling high speed data networking hardware to one that’s focused on software.

RELATED: Extreme Networks to acquire Brocade data center networking business for $55M

Meyercord Extreme
Ed Meyercord

“When Extreme was founded, it was a point product company selling a box with the fastest processing speeds and feeds,” Meyercord said. “The market has evolved to be more and more about software and with the new Extreme we have software-driven networking solutions across the entire enterprise domain.”

To inform customers about its new capabilities, Extreme is going to be meeting with customers on what it’s calling ExtremeNow.

With acquisition now complete, Extreme gains Brocade’s existing customer relationships, personnel and technology assets including the SLX, VDX, MLX, CES, CER, Workflow Composer, Automation Suites, and certain other data center related products.

Additionally, the acquisition enhances Extreme's data center solutions used by enterprises and service providers across industries such as education, hospitality, healthcare, retail, transportation and logistics, manufacturing and government.

Meyercord said the acquisition of Brocade’s assets immediately broadens its portfolio to address an array of customer needs.

“Brocade fills a really important gap in our product portfolio,” Meyercord said. “We pick up their technology, which is incredibly valuable for us and we have the complete enterprise portfolio covered—small enterprises to large enterprises.”

Meyercord added that Extreme can “go to its large enterprise customers and say we have access solutions, we have campus solutions, and we have data center solutions.”

Extreme expects that the acquisition will be accretive to cash flow and earnings for its fiscal year 2018, which began on July 1, and expects to generate over $230 million in annualized revenue from the acquired assets.

This is the third in a series of acquisitions announced by Extreme in the last year, including its acquisition of Zebra Technologies' WLAN business and Avaya's networking business.