‘You don’t need to fear that your system will go dark because someone in the U.S. decided to disconnect you’: For Russian military companies, American technology company Extreme Networks office equipment had a strong selling point
In a measure of Western concern about the S-400, the United States ejected Turkey, a NATO member, from a joint fighter jet program in 2019 after Ankara took delivery of the Russian system.
Between 2017 and 2021, MMZ Avangard obtained over half a million dollars' worth of Extreme equipment for its IT systems, according to the business records reviewed by Reuters and the people familiar with the matter. The products included high-speed switches, an essential building block of corporate IT networks, and software.
Extreme said in its statement that the allegations were brought by a disgruntled employee. An investigation by the firm had found nothing to corroborate any of the claims until Reuters brought "new facts" to the company's attention this month. The company said it ceased operations in Russia in March, adding that it subsequently launched a process to dismiss the disgruntled employee for poor performance. It said it has no records of sales involving Russian warships.
Founded in 1996, Extreme is a junior player in the computer networking industry. Last year, it posted revenue of $1.1 billion, compared with $50 billion for Cisco Systems. One of the documents shows that in the four years ending 2020, Russian customers purchased $41.5 million worth of equipment. Reuters couldn't determine Extreme's total sales to sanctioned or military firms because it wasn't clear if transactions other than those involving MMZ Avangard had been recorded under cover names.
For Russian military companies, Extreme equipment had a strong selling point, the three people familiar with the shipments said: Unlike larger rivals, Extreme doesn't require service subscriptions and frequent software updates. "It is absolutely autonomous," one of the people said of the equipment. "It works without a license and you don't even need to be connected to the internet.
As soon as its equipment arrived in Moscow, Extreme dispatched a staff engineer to MMZ Avangard's offices to help ensure a smooth installation, one of the people familiar with the shipments said. MMZ Avangard began buying products from Extreme in December 2017 and was disguised under the DEMZ cover in Extreme business records from that date, according to emails and other documents seen by Reuters. The most recent transaction using the DEMZ cover that Reuters identified was in September 2021. In total, the records show that Extreme shipped goods worth about $645,000 in this way during that period.
On the last day of 2019, as a "DEMZ" order was winding through Extreme's approval system, an Extreme sales manager working in North Carolina emailed RRC, the Russian distributor, with a question about the domain name: "Can you tell me what the relationship is between DEMZ and mmza.ru?" An employee of the distributor responded that mmza.ru was "the customer's" domain. The employee didn't elaborate.
Less than a week after the message from the Extreme compliance employee, a two-page letter seen by Reuters attested that the end-user was not sanctioned, and would not use Extreme's equipment in a way banned by U.S. law. Bearing an illegible signature and a blue "DEMZ" stamp, the document was sent to Extreme's compliance desk, according to one of the people familiar with the matter.
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