Sophos claims big-time channel sales gains

Sophos is claiming big gains in channel sales of its security products and saying that partners can be more profitable selling its products over rival offerings.

Sophos is claiming big gains in channel sales of its security products.

The Abingdon, U.K.-based company said that average partner revenue grew 164% year over year and that revenue growth among its top partners in North America was a whopping 712%.

The company is less specific about partner margins, but Chris Doggett, director of North American channel sales for Sophos, says they are healthier than the norm.

"The big security gorillas all have high published margin rates," Doggett said. "But in reality, when they compete for any given deal, they're down in the single digits even when factoring in rebates and incentives."

Doggett explained that in Sophos' program, the net amount partners retain on margins is "much higher" than the published margins. "It's two times to five times the net margin versus other major competitors, and that's not by accident," he said.

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The secret there is selectivity in partner recruitment and retention. Sophos has 750 active partners in North America, far fewer than Symantec. Doggett said Sophos selectively recruits new partners to gain specific expertise that they lack now or to fill geographical gaps.

The company, with headquarters both in the U.K. and Burlington, Mass., moved to a 100% channel sales model in North America last year.

"I can't say we don't have a single direct customer -- no one could -- but we're as channel-focused as anyone," Sophos CEO Steve Munford told SearchITchannel.com.

That contention was backed up by Steve Cundill, director of U.S. West sales for Softchoice, a Toronto-based Sophos partner.

"The fact that they're 100% channel is a strategic advantage. They have quality technology and competitive pricing, and outstanding service," Cundill said.

He said Softchoice has taken on some heretofore direct customers from Sophos.

"We are growing at two times the rate of our competitors," Munford said. He cited three primary drivers: The company broadened its product set, moved from point solutions to more integrated products, and integrated network access control with its endpoint security products.

He also said Sophos, unlike unnamed competitors, is concentrating on business security solutions only; there are no consumer products. Symantec has been slammed for spreading itself too thin with an array of products stretching from retail to high-end enterprise security.

Sophos also claimed a huge sell into General Electric last year. GE is putting Sophos' end-point solution into production on 350,000 seats.

Based on this data, some observers see Sophos as breaking into the top tier of PC and data security providers, right up there with Symantec and Trend Micro.

Some say Symantec has been rocked by aftershocks from its buying spree of the last few years. During that time it snapped up Altiris, @Stake, Veritas, IMLogic, Brightmail and other companies.

One Symantec security partner said that the Veritas acquisition in particular caused confusion and that Symantec partner support had suffered possibly as a result. "Veritas was a lot to swallow," he said.

"We're hearing from partners who have sold or continue to sell Symantec that all those products can be advantageous if you know where they fit. But they're not getting the support of the Symantec team in sifting through them all and determining the right product for the customer," Doggett said.

Support appears to be a priority for Sophos. "We differentiate on that. Unlike Trend or McAfee, we do not outsource support or move it to low-cost providers" outside the customer geography, Munford said. "All support is local for Sophos."

Sophos employs about 350 people in North America, roughly one-third of those in sales.

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