Extreme Networks Investor Day Highlighted Cloud-Managed and 5G Themes

Extreme Networks held its investor day and highlighted multiple themes.  The company highlighted its Networking-focused Cloud-management capabilities, its large addressable market, how the company can benefit from the 5G market and its pivot to growth markets.  CEO Ed Meyercord addressed Cloud, 5G and artificial intelligence themes.  For us, we thought that Extreme’s focus on 5G was new and incremental to what the company has talked about in past presentations.  And, of course, Extreme’s playing up its market position in Wi-Fi cloud-managed services makes sense because this trend has been growing and Extreme is ranked second.  We see cloud-managed services as a continuing growth trend for the next several years and we highlight these details in our WLAN and Campus switching research programs.

Meyercord explained that as workers, data and computing become increasingly distributed, cloud-managed networking becomes critical.  Meyercord cited 650 Group research confirming that Extreme CloudIQ revenues rank number two in the industry.  The company cited a $26B total addressable market relating to Enterprise Networking and a $3B addressable market associated with the Service Provider market.  The company cited that the 5G market is expected to benefit Extreme Networks, explaining that 80% of the Mobile RAN market will be 5G-related by the year 2025; it cited that 5G-related is a “longer-term growth opportunity”.  Extreme sees its next fiscal year will be at least in part driven by: (a) taking share in high-growth networking industry segments, (b) cross-selling and driving cloud-adoption (it cited 5M installed base but only 1.5M cloud installed base), (c) new product introductions such as Universal Platform and Co-Pilot Artificial Intelligence (AI).

Extreme invited Major League Baseball to its investor day.  We were encouraged to hear that MLB sees that 5G and Wi-Fi 6 are complementary, as opposed to competitive.  This debate about two of the main types of wireless has been very active and an important industry player like MLB confirming that it sees the two as complementary validates our own view that Wi-Fi and cellular play together well.