Canepa sets Extreme course

Two months after being named CEO of Extreme Networks, Mark Canepa had to report the Ethernet equipment vendor's fourth-consecutive quarter of year-over-year revenue decline. Particularly nettlesome is the U.S. market, where quarterly revenue is down 24% from a year ago and recent additions to the sales team are not yet up to full speed.

Canepa promises broad organizational changes, directing Extreme's energy where it has clear competitive advantages and making the company leaner everywhere else.

“My goal is to find the market segments that make sense for us and throw the whole company behind them,” he said. In particular, Extreme wants customers whose needs change rapidly, as Extreme's smaller size (856 employees and growing) makes it more nimble than competitors such as Cisco Systems.

Canepa succeeded in transforming Sun Microsystems' storage business and later integrating Sun's $4 billion acquisition of StorageTek by squeezing efficiencies out of the supply chain and making greater use of indirect sales channels. Extreme is working at those same goals, announcing a new U.S. channel program last week.

Canepa wants to go further, adapting Extreme's product development to address the very different price sensitivities of its two customer groups: enterprises, an 80% chunk of revenue, and service providers, the other 20%. In both markets, Canepa wants to focus more on total solutions than on products, adding more services know-how to its ranks.

“If you can shift the discussion to more of a solutions focus, the pricing equation changes dramatically,” he said.