Extremely Hive Minded

I must admit that I was wrong. After almost six years, I was mistake about who would end up buying Aerohive. You may recall back in 2013 I made a prediction that Aerohive would end up being bought by Dell. I recall it frequently because quite a few people still point out that post and wonder what if it’s happened yet.

Alas, June 26, 2019 is the date when I was finally proven wrong when Extreme Networks announced plans to purchase Aerohive for $4.45/share, which equates to around $272 million paid, which will be adjust for some cash on hand. Aerohive is the latest addition to the Extreme portfolio, which now includes pieces of Brocade, Avaya, Enterasys, and Motorola/Zebra.

Why did Extreme buy Aerohive? I know that several people in the industry told me they called this months ago, but that doesn’t explain the reasoning behind spending almost $300 million right before the end of the fiscal year. What was the draw that have Extreme buzzing about this particular company?

Flying Through The Clouds

The most apparent answer is HiveManager. Why? Because it’s really the only thing unique to Aerohive that Extreme really didn’t have already. Aerohive’s APs aren’t custom built. Aerohive’s switching line was rebadged from an ODM in order to meet the requirements to be included in Gartner’s Wired and Wireless Magic Quadrant. So the real draw was the software. The cloud management platform that Aerohive has pushed as their crown jewel for a number of years.

I’ll admit that HiveManager is a very nice piece of management software. It’s easy to use and has a lot of power behind the scenes. It’s also capable of being tuned for very specific vertical requirements, such as education. You can set up self-service portals and Private Pre-Shared Keys (PPSKs) fairly easily for your users. You can also build a lot of policy around the pieces of your network, both hardware and users. That’s a place to start your journey.

Why? Because Extreme is all about Automation! I talked to their team a few weeks ago and the story was all about building automation platforms. Extreme wants to have systems that are highly integrated and capable of doing things to make life easier for administrators. That means having the control pieces in place. And I’m not sure if what Extreme had already was in the same league as HiveManager. But I doubt Extreme has put as much effort into their software yet as Aerohive had invested in theirs over the past 8 years.

For Extreme to really build out the edge network of the future, they need to have a cloud-based management system that has easy policy creation and can be extended to include not only wireless access points but wired switches and other data center automation. If you look at what is happening with intent-based networking from other networking companies, you know how important policy definition is to the schema of your network going forward. In order to get that policy engine up and running quickly to feed the automation engine, Extreme made the call to buy it.

Part of the Colony

More importantly than the software piece, to me at least, is the people. Sure, you can have a bunch of people hacking away at code for a lot of hours to build something great. You can even choose to buy that something great from someone else and just start modifying it to your needs. Extreme knew that adapting HiveManager to fulfill the needs of their platform wasn’t going to be a walk in the park. So bringing the Aerohive team on board makes the most sense to me.

But it’s also important to realize who had a big hand in making the call. Abby Strong (@WiFi_Princess) is the VP of Product Marketing at Extreme. Before that she held the same role at Aerohive in some fashion for a number of years. She drove Aerohive to where they were before moving over to Extreme to do something similar.

When you’re building a team, how do you do it? Do you run out and find random people that you think are the best for the job and hope they gel quickly? Do you just throw darts at a stack of resumes and hope random chance favors your bold strategy? Or do you look at existing teams that work well together and can pull off amazing feats of technical talent with the right motivation? I’d say the third option is the most successful, wouldn’t you?

It’s not unheard of in the wireless industry for an entire team to move back and forth between companies. There’s a hospitality team that’s moved back and forth between Ruckus, Aerohive, and Ubiquiti. There are other teams, like some working on 802.11u, that bounced around a couple of times before they found a home. Which makes me wonder if Extreme bought Aerohive for HiveManager and ended up with the development team as a bonus? Or if they decided to buy the development team and got the software for “free”?

Tom’s Take

We all knew Aerohive was putting itself on the market. You don’t shed sales staff and middle management unless you’re making yourself a very attractive target for acquisition. I still held out hope that maybe Dell would come through for me and make my five-year-old prediction prescient. Instead, the right company snapped up Aerohive for next to nothing and will start in earnest integrating HiveManager into their stack in the coming months. I don’t know what the future plans for further integration look like, but the wireless world is buzzing right now and that should make life extremely sweet for the Aerohive team.

Will Dell Networking Wither Away?


The behemoth merger of Dell and EMC is nearing conclusion. The first week of August is the target date for the final wrap up of all the financial and legal parts of the acquisition. After that is done, the long task of analyzing product lines and finding a way to reduce complexity and product sprawl begins. We’ve already seen the spin out of Quest and Sonicwall into a separate entity to raise cash for the final stretch of the acquisition. No doubt other storage and compute products are going to face a go/no go decision in the future. But one product line which is in real danger of disappearing is networking.

Whither Whitebox?

The first indicator of the problems with Dell and networking comes from whitebox switching. Dell released OS 10 earlier this year as a way to capitalize on the growing market of free operating systems running on commodity hardware. Right now, OS 10 can run on Dell equipment. In the future, they are hoping to spread it out to whitebox devices. That assumes that soon you’ll see Dell branded OSes running on switches purchased from non-Dell sources booting with ONIE.

Once OS 10 pushes forward, what does that mean for Dell’s hardware business? Dell would naturally want to keep selling devices to customers. Whitebox switches would undercut their ability to offer cheap ports to customers in data center deployments. Rather than give up that opportunity, Dell is positioning themselves to run some form of Dell software on top of that hardware for management purposes, which has always been a strong point for Dell. Losing the hardware means little to Dell if they have to lose profit margin to keep it there in the first place.

The second indicator of networking issues comes from comments from Michael Dell at EMCworld this year. Check out this short video featuring him with outgoing EMC CEO Joe Tucci:

Some of the telling comments in here involve Michael Dell’s praise for the NSX business model and how it is being adopted by a large number of other vendors in the industry. Also telling is their reaffirmation that Cisco is an important partnership in VCE and won’t be going away any time soon. While these two things don’t seem to be related on the surface, they both point to a truth Dell is trying hard to accept.

In the future, with overlay network virtualization models gaining traction in the data center, the underlying hardware will matter little. In almost every case, the hardware choice will come down to one of two options:

  1. Which switch is the cheapest?
  2. Which switch is on the Approved List?

That’s it. That’s the whole decision tree. No one will care what sticker is on the box. They will only care that it didn’t cost a fortune and that they won’t get fired for buying it. That’s bad for companies that aren’t making white boxes or named Cisco. Other network vendors are going to try and add value in some way, but the overlay sitting on top of those bells and whistles will make it next to impossible to differentiate in anything but software. Whether that’s superior management capabilities, open plug-in model, or some other thing we haven’t thought of will make no difference in the end. Software will still be king and the hardware will be an inexpensive pawn or a costly piece that has been pre-approved.

Whither Wireless?

The other big inflection point that makes me worry about the Dell networking story is the lack of movement in the wireless space. Dell has historically been a company to partner first and acquire second. But with HPE’s acquisition of Aruba Networks last year, the dominos in the wireless space are still waiting to fall. Brocade raced out to buy Ruckus. Meru offered itself on a platter to anyone that would buy them. Now Aerohive stands as the last independent wireless vendor without a dance partner. Yes, they’ve announced that they are partnering with Dell, but have you been to the Dell Wireless Networking page? Can you guess what the Dell W-series is? Here’s a hint: it rhymes with “Peruba”.

Every time Dell leads with a W-series deployment, they are effectively paying their biggest competitor. They are opening the door to allowing HPE/Aruba to come in and not only start talking about wireless but servers, storage, and other networking as well. Dell would do well at this point to start deemphasizing the W-series and start highlighting the “new generation” of Aerohive APs and how they are going to the be the focus moving forward.

The real solution would be for Dell to buy a wireless company and take all the wireless expertise they are selling in-house. That would show they are serious about both the campus network of the future and the data center network needed to support their other server and storage infrastructure. Sadly, with Dell being leveraged due to the privatization of his company just two years ago and mounting debt for this mega merger, Dell is looking to make cash with spin offs instead of spending it on yet another company to ingest and subsume. Which means a real non-partner wireless solution is still many years away.

Tom’s Take

Dell’s networking strategy is in maintenance mode. Make switches to support faster speeds for now, probably with Tomahawk support soon, and hope that this whole networking thing goes software sooner rather than later. Otherwise, the need to shore up the campus wireless areas along with the coming decision about showing support fully behind NSX and partnerships is going to be a bitter pill to swallow. Perhaps Dell Networking will exist as an option for companies wanting a 100% Dell solution? Or maybe they are waiting for a new offering from Dell/EMC in the data center to drive profits to research and development to keep pace with Cisco and Arista? One can only hope that their networking flower doesn’t wither on the vine.

The Butcher’s Bill


Watching a real butcher work is akin to watching a surgeon. They are experts with their tools, which are cleavers and knives instead of scalpels and stitches. They know how to carve the best cut of meat from a formless lump. And they do it with the expert eye of a professional trained in their trade.

Butcher is a term that is often loaded with all manner of negative connotations. It makes readers think of indiscriminate slaughter and haphazard destruction. But the real truth is that a butcher requires time and training to cut as they do. There is nothing that a butcher does that isn’t calculated and careful.

Quick Cuts

Why all the discussion about butchers? Because you’re going to see a lot more comparisons in the future when people talk about the pending Dell/EMC acquisition. The real indiscriminate cutting has already started. EMC hid an undisclosed number of layoffs in a Dec. 31 press release. VMware is going to take a 5% hit in jobs, including the entire Workstation and Fusion teams.

It’s no secret that the deal is in trouble right now. Investors are cringing at some of the provisions. The Virtustream spin out was rescinded after backlash. The tracking stock created to creatively dodge some tax issues is now so low that it needs a ladder to tickle a snake’s belly. Every news day brings another challenge to the deal that is more likely to sink it than to save it.

In order to meet this rising tide of disillusionment, Dell and EMC are pulling out all the stops. Expect to see more ham-handed decisions in the future, like cashiering entire teams and divisions in order to get under some magical number that investors like and will be willing to support in order to make this mega merger happen. Given Michael Dell’s comments about investors during his run to make Dell a private company, I’m sure he probably has a very sour taste in his mouth thanks to all this.

Butchers work to make the best possible product from the raw materials given. There are no second chances. No do-overs. You have to get it right the first time. That very reason is why all this scrambling looks more like the throes of a desperate gambit instead of a sound merger strategy.

Prime Cuts

All companies that merge have duplicate jobs. It’s a fact of business. Much of the job overlap comes in the administrative side of the house. Legal, accounts, and management teams all have significant overlap no matter where you go. And while those teams are important for keeping the lights on and getting the bills paid, the positions represent redundancy that almost never gets trimmed away. Staff positions keep the machine moving. That means they stay.

Assuming that no one inside of either organization wants to cut staff positions, how can we approach something resembling more sane carving that accomplishes the same goals without leading to the hemorrhaging that will come from large-scale indiscriminate layoffs?

  1. Kill off needless products. While I’m sure this is an on-going process, there are some pretty easy targets for this one. Haven’t sold that SKU in two years? Gone. Wind down support and give a discounted upgrade to something you do support. Kill off SKUs that exists solely to win awards.
  2. Reduce products by collapsing product lines. You don’t need two entry-level products for iSCSI storage. Or five different enterprise-class arrays. Kill off the things that overlap or directly compete against each other. Who survives? The one that sells better. The one that has better tech. The one that costs less to support. If you’re going to pinch pennies in other places, you had better start doing it here too.
  3. Management reductions need to happen too. For all the talk of reducing engineering teams and creating synergy, it’s surprising how often managers escape the layoffs. They’re almost like professors with tenure. Well, it’s time for them to prove their worth too. If their department is gone, so are they. If they are an ineffective manager, pay them a severance and let them earn their role somewhere else all over again. And that goes double for the 500 CTOs that seem to have sprung up inside large organizations lately.

You’d think these things were obvious and easy to figure out. Yet these are the kinds of decisions that get overlooked during every merger.

Tom’s Take

Layoffs hurt lots of people. It’s never fun when your teammates and friends get sacked. But you can be smart about who goes and how best to make the new company survive and even thrive. Chopping away at the company with a machete is like a horror movie. People are going to scream and cry and you’ll be lucky to live through the end. Instead of taking that approach, be smart. Make the best cuts you can from what you’ve got. Find ways to package the parts no one might want with other parts that people find attractive. Do what you can to use as much as you can. Think like a professional butcher. Don’t act like an amateur one.