Despite problems sourcing spare parts and a gargantuan backlog of orders to fill, Extreme Networks earned a record FY23 first quarter of nearly $300 million, up 11 percent year-over-year and seven percent quarter-on-quarter. after trimester.
The backlog CEO Ed Meyercord alluded to during the vendor’s quarterly earnings call this week is $550 million, also a record.
To put it in perspective, that’s almost Three complete quarters of product income in backlog, mainly due to supply chain issues. Concerns about the economy are also present, but Meyercord said that when it comes to investing in networks, things are looking bright.
“The combination of our continued revenue growth and record order book gives us even greater confidence in our long-term growth outlook,” he said. to simplify the deployment and management of those networks.
“We’re not seeing networking initiatives being deprioritized,” he said. “If enterprise customers have to cut back on spending, we’re not seeing it, we’re not seeing them stop prioritizing networks.”
Wireless connection is strong
An area of great revenue growth but also “significant” delays is wireless, where Extreme is pushing WiFi 6E technology hard.
“If you just think about you know how we live and how we work and how we shop and you think about environments and how much of the environment is wireless versus wired, you know it’s growing, and I think there’s a life cycle for wireless that’s also shorter than their traditional hardwired switches,” Meyercord said.
“So as a result there are more upgrades and I think there’s more volume and churn in the wireless space.”
That includes cellular wireless technology, including 5G for environments where Wi-Fi isn’t the best option. “[A]”As you look at things like smart cities, longer range, lower latency, private cellular networks, driverless car support, these kinds of things, they’re not your traditional Wi-Fi solution,” Meyercord said. “So I think you’ll see the rise of some of these other technologies…”
Gartner said this month that no single wireless technology will dominate on its own, but enterprises will use a variety to support a variety of environments, from office Wi-Fi, mobile device services, low-power protocols and even radio connectivity.
So much so that Gartner predicts that by 2025, 60 percent of businesses will use five or more wireless technologies simultaneously.
“We are going to see a spectrum of solutions in the enterprise including 4G, 5G, LTE, Wi-Fi 5, 6, 7, all of which will create new data that businesses can use in analytics, and low-energy systems will harvest energy directly. of the network This means that the network will become a source of direct business value,” Gartner said.
Meyercord said Extreme is looking to continually expand and grow its automation, artificial intelligence and machine learning capabilities with cloud-based wired and wireless network management offerings under the ExtremeCloud IQ umbrella, including ExtremeCloud IQ CoPilot.
The idea is that with its artificial intelligence or machine learning technology, the company can identify network problems that customers might not have seen before or were unaware of and fix them automatically, Meyercord said.
More recently, Extreme updated CoPilot to include support for digital twins, virtual replicas of physical devices that organizations can test before making changes to the actual devices. For example, tests on virtual twins could validate new network switches, access points and their configuration before launching with the real thing, the company said.
Extreme is not alone with supply chain issues
The supply constraints cited by Meyercord are widespread. Extreme competitor Juniper Networks said this week that its order book is $2.3 billion, a drop of $100 million from the previous quarter. Others, such as Cisco and Arista, are likely to report the same type of backlog in the coming weeks, as delivery times for some routers, switches, and other equipment have already been delayed by much more than six months.
Supply chain issues have led most major network players to redesign or redesign some products in an attempt to overcome component shortages and deliver products to customers.
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