• Revenue Operations Sales Execution

Transitioning to a Cloud Business Model—and Growing Revenue 42%

Shelby Dunlap

Shelby Dunlap
Senior Manager, Customer Marketing & Community Programs

Transitioning to a Cloud Business Model—and Growing Revenue 42%

The demand for cloud offerings in the network vertical has soared, with a projected growth from $233 billion last year to $295 billion by 2021, according to a recent report from MarketsandMarkets, an independent business vertical research firm.  

Even before the pandemic, cloud driven approaches have been increasingly attractive for companies looking for flexible wired and wireless offerings for distributed work environments.

Seeing this trend unfold, Extreme Networks created a cloud strategy to meet customer cloud demands, drive net dollar retention, expand the total addressable market, establish leader market positioning, and ultimately source a new channel of subscription revenue for the business.   

To realize this vision, Extreme had to address inconsistent forecasting practices and create a standardized revenue process that brought pipeline visibility, increased sales execution, and more predictable revenue results.

“We had two main revenue streams: hardware and hardware services,” says Ed Meyercord, President and CEO of Extreme Networks. “In 2019, we acquired Aerohive Networks, a leader in cloud networking, allowing us to offer an entirely new experience for our customers by lifting traditionally complex networking into the cloud.”

Productivity drains from manual data entry, lack of visibility into deal progression, and inaccurate forecasts were major risk factors, prompting Extreme to make a change. “It was a lightbulb moment when we saw Clari,” Meyercord says.

Initiative: Restructure revenue teams to prepare for cloud offerings

Moving to a cloud/as-a-service sales model consisted of three main selling motions for Extreme:

  1. Transition existing customers into the cloud
  2. Grow their existing customer base with new capabilities
  3. Capture new logo business interested in cloud network capabilities

To prepare the business for this new cloud offering, Extreme audited the internal sales process and identified gaps that wouldn make it difficult to scale the new cloud selling motion. For Meyercord, the main goal was to gain visibility into how individual revenue streams were performing against goals and boost shareholder confidence with more predictable revenue.

“Our global weekly forecast call was dominated by spreadsheets,” Meyercord says. “We use Salesforce, but the forecast was all very manual and we couldn’t get the right visibility to truly understand what’s going on in the business and make the key decisions required to strategically grow.”

There were critical questions the Extreme sales leadership needed to be able to answer:

  • How is deal inventory moving across business segments?
  • Which regions need more attention or resources?
  • How is the newly-formed cloud business shaping up throughout each quarter, where do we have risk or opportunity, and what can we do about it? 

Clari’s Revenue Operations Platform provided Extreme Networks with an efficient operational cadence and actionable insights that helps teams answer those critical questions that previously weren’t possible.

Result: 42% Quarter-over-Quarter cloud new subscription bookings with total visibility and exceptional execution

Extreme adopted Clari across the entire revenue team—from managers to reps, inside sales, sales engineers,sales ops to customer success andall the way up to company executives like Meyercord, driving visibility and accountability across the revenue organization.

“Clari makes understanding our business effortless, from new logo opportunities to new opportunities with existing customers,” Meyercord says. “We’re able to see the business in a way we haven’t been able to see before and then collaborate as a team in a way we haven’t collaborated before because we have much greater visibility, and much richer information in real time.”

Clari is helping give the Extreme team insights to what revenue streams are performing well, and which might need a different engagement strategy.

Extreme uses Clari to measure performance across its three main revenue streams: products, services, and the new cloud subscription business. Meyercord and his sales leaders, all the way to the individual front-line managers, can dive deep and inspect opportunities by revenue stream, region, or individual team in order to identify risk and, ultimately, drive more predictable revenue. 

“Now on our forecast calls, we’re actually going through Clari in real time,” he says. “Instead of PowerPoints and spreadsheets, we’re diving into the forecast and looking at the actual pipeline. We’re looking at best case deals, commits, slips, and now can expand into current and future quarter planning.” 

At the end of the day, the ability to see the business at a glance from the global level, but also inspect pipeline at an opportunity level, gives Meyercord the visibility he and his revenue leaders need to report back to his shareholders with confidence as they grow their cloud business.

“With Clari, we’re able to take the risk out of our forecast,” Meyercord says. “And when we’re able to de-risk our forecast, we can generate predictable revenue, which means a lot more value for us and our shareholders.”

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