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”?
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.