CenturionStudio.it - Fotolia
Extreme Networks Inc. President and CEO Chuck Berger has stepped down, the latest in an executive shakeup following the disclosure that profits were millions of dollars less than expected.
Berger's departure comes two weeks after the abrupt exit of Chief Revenue Officer Jeff White. Extreme named board Chairman Ed Meyercord as its new president and CEO.
The executive shuffle follows the disclosure this month that earnings for the fiscal quarter ended March 31 were millions of dollars lower than originally expected. Berger blamed currency fluctuations as a reason for the decline.
With the stock price falling for the last three quarters, change within the executive ranks was warranted, said ZK Research analyst Zeus Kerravala.
"Extreme now has a very good portfolio of products, and what they need is someone who can grow the channel and the revenue base," he said.
Extreme said in an email that the Board appreciated Berger's leadership in completing the Enterasys acquisition, as well as his ability to recruit a world-class executive leadership team. "As Extreme moves into the next phase, post-acquisition, Ed Meyercord will lead the team to capitalize on the momentum created within our product portfolio," the company said.
On Wednesday, Extreme announced the promotions of Bob Gault to executive vice president for Extreme Networks' worldwide sales, channel and services organizations, Eileen Brooker to executive vice president of global alliances and strategic accounts, and Norman Rice to executive vice president of global marketing and corporate development.
The company is still searching for a replacement for White and for Meyercord's former position on the Board.
"Extreme Networks remains committed to the separation of the chair of the board and CEO roles at the company and believes that such separation increases the board's independence from management and thus leads to better monitoring and oversight," the company said.
Analyzing Extreme's potential direction
Since the Enterasys acquisition, Extreme has tried to merge two networking companies of equal size. The Enterasys culture, being a Wi-Fi-focused vendor on the East Coast, was much different than Extreme, a West Coast company that put nearly all its energy in the data center, Kerravala said.
Growing share in the networking market dominated by heavyweights like Cisco and Hewlett-Packard isn't easy, and Extreme should focus on getting their channel partners moving forward, Kerravala said.
"[Extreme] needs to first stop the bleeding and get the business stabilized, then rebuild their channel efforts to create a larger distribution model for their products," he said. "Right now, their market share isn't indicative of their products, so this comes down to operational execution."
Software-defined networking (SDN) is another area that will surely be a focus. Extreme already has an SDN platform based on OpenDaylight.
SDN presents an opportunity because enterprises are willing to evaluate emerging technologies from vendors other than the large players, Kerravala said.
Extreme/Enterasys partners merge
Extreme Networks is building an OpenDaylight controller
Extreme networks named NFL's Wi-Fi provider