At your service
Appointed in June to implement an as-a-service business model, Extreme Networks CRO Joe Vitalone tells Melanie Mingas about his strategy
With the New Year on the horizon and a vaccine in the early stages of rollout, the trials of 2020 will soon be behind us, but their impact on the world of business is yet to be fully understood.
While many spent the last year contemplating how the "new normal" might take shape, others were busy creating strategies for scenarios that could emerge in such unchartered territory.
Among the strategists is Joe Vitalone, appointed chief revenue officer (CRO) of Extreme Networks in June. Overseeing global sales, services, channel, and sales operations teams, he joined with a three-point list of priorities for his first 100 days: to conclude the reorganisation of the teams, enhance "teaming aspects" by integrating functions across regions and accounts, and roll out a new playbook for sales and marketing.
"We wanted to protect and migrate our base, that was number one," he says of the sales direction. "We wanted to really develop our partner programme holistically and make it bigger and broader, bigger partners, more penetration into certain markets. We had really big market share in some markets, but a very small market share in others, and so we wanted to focus on that," he continues.
"Then we really wanted to expand our universal platform in our move to the cloud," he adds.
Vitalone's to do list doesn’t end there. His top job is implementing a subscription-based – or as-a-service – billing model for customers. It's something he's done three times previously, the first at video conferencing company LifeSized, which was acquired by Logitech in 2009 for US$405 million.
"That was before the big shift to the cloud happened in unified communications, video surveillances as-a-service, certainly video conferencing as-a-service, so it sputtered," he explains, saying "it was too early" for the model to be widely accepted.
Thanks to everything from streaming services to car finance that wasn't the case for long, and the subscription model quickly gained popularity in business, too.
The next time Vitalone implemented the strategy was at ShoreTel – itself acquired by Mitel in 2017 for $530 million – and then for a third time at Razberi.
"Network-as-a-service has been slow to take off. We’re 25 years old and only just moving in that direction," he says. However, there is a positive: "Covid has really accelerated it."
"It has accelerated something that was going to take years into a case of months and we are seeing companies who really no longer want to write big cheques, they want to pay monthly on a subscription model and they are so accustomed to it now from other industries, with RingCentral communications and Zoom, which we use every day now, they want to see network-as-a-service move in that direction," Vitalone adds.
As such, he says the shift is customer-driven above all else, but at the same time Vitalone is fully aware that if partners don't extend their buy in "it becomes more challenging".
"Because they have set up their business for a certain business model and when you shift that to XaaS, which is a monthly pay-out, you pay your sales people differently, there is a different revenue component," he explains.
But instead of creating a ripple effect, Extreme has created a bridge.
"We have a financing construct inside of Extreme through Extreme Capital to finance the networking gear to the customer. The partner still gets paid like it’s a capex deal, the distributors does too, but the customer pays monthly. That’s all that matters in this move – how the customer purchases and how they experience the services they get," he says.
Deloitte billed Xaas as a strategic and operational blueprint back in 2017 and it has undoubtedly gained pace across cloud and communications in the years since.
As Vitalone says, what was moving at one pace before 2020 is progressing at a far different pace today and, in another 12 months it's quite possible that everything-as-a-service will be closer to reality. For now, Vitalone is focusing on what he does best.
"We will be a leader in [Network-as-a-service]… we will go at the customer’s pace but the early results are very impressive and better frankly than even my lofty expectations."