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Partners weigh in on Dell security software portfolio, strategy

As Dell builds its muscle in the security software arena through a series of acquisitions, partners discuss how the company's moves have impacted their business.

As a private company, Dell is well positioned to place bets on its long-term future, particularly in the area of software, which was something it wasn't able to do under scrutiny as a public company. And that is exactly what the company is doing.

In particular, Dell is on a mission to attract more partners to sell its security offerings.

"Security is a big opportunity for Dell and its partners because security is a hot growth part of the industry and also because it's a customer requirement, one that Dell definitely wants to participate in," said Marvin Blough, executive director of worldwide channels and alliances with Dell Software.

With customers moving to cloud environments and mobile devices, they face more complex security challenges. That, combined with the fact that Dell is already in many of those businesses with servers and clients, makes the Dell security strategy a natural fit and opportunity for partners, he added.

Given the breadth of Dell's security portfolio, however, it must rely on partners to gain market share. Security products are also based on complex technologies that require customization, ongoing maintenance and implementation services -- skills that partners bring to the table.

We've met a handful of direct sales guys [at Dell] who understand that it's in their best interest to work with us to meet their quota for selling SonicWall so they embrace it as a successful way of doing business.
Timothy Martinezpresident, Western NRG

"We see channel partners as the primary way we want to go to market with security products," Blough said.

Today, 90% of Dell security product sales flow through the channel. It's worth noting that in February 2012, Dell announced the formation of the Dell Software group and has been folding in acquisitions such as Quest Software, SonicWall, Kace, AppAssure and Boomi. In September 2013, Dell unified its disparate channel programs from the various acquisitions into the existing Dell PartnerDirect.

PartnerDirect gained 12,000 partners, 75% of which were from Dell SonicWall.

SonicWall, acquired May 2012, is one of three acquisitions -- the other two being Credant Technologies in December 2012 and SecureWorks in February 2011 -- that brought respected and leading security vendors into the Dell fold, said John Kindervag, vice president and principal analyst at Forrester Research.

With the Credant purchase, Dell gained laptop and desktop encryption software; with SonicWall, it got products including next-generation firewalls and unified threat management tools; and, with SecureWorks, Dell has a managed security product.

Still, Dell has work to do to differentiate itself as a vendor competing against the likes of Intel, Cisco and Checkpoint, among other vendors with security offerings, according to Kindervag. "Dell has to demonstrate an integrated value proposition that is significant for customers," he said.

When it comes to building a channel capable of selling synergistic hardware/software solutions, Dell needs to balance the culture of the various types of partners that it is involved with, he noted.

"The security channel tends to be a different animal -- it's highly specialized -- compared to the traditional Dell PC, laptop, server channel partner. Traditional channel partners may now be able to sell the security technologies, but they need to develop expertise they probably don't have at this point," he said. On the other hand, security resellers that are now part of the larger Dell channel may not have an interest in selling other Dell solutions.

According to Shane Grumbles, sales director at 7-year-old Palmetto Technology Group, which is based in Greensville, North Carolina, the company has been selling Dell desktops and servers for years as well as SonicWall products both before and after the acquisition by Dell.

"SonicWall is only a small part of our business, less than 5% of our revenue," Grumbles said. But Palmetto Technology Group doesn't sell another vendor's security product to its customers, primarily small businesses with five to 150 end users. "We trust the product," Grumbles said.

That said, the Dell partner has no plans to explore selling other Dell security solutions or to build its SonicWall business primarily because roughly half of Palmetto's business focuses on Microsoft online services, such as Office 365, hosted Exchange, SharePoint and Lync, as well as some hosted CRM. The other half of the partner's business is managed services around desktops, servers and network integration.

If Palmetto Technology Group is night, Western NRG Inc. of Camarillo, California, is day. The company, which partnered with SonicWall before and after the acquisition by Dell, has led with SonicWall Internet security solutions for years. When Dell acquired the very channel-focused, small security vendor, Timothy Martinez, president of Western NRG, like many SonicWall partners, feared for the worst.

Dell was not only a "gigantic new owner" but the vendor confirmed the fear felt by many SonicWall partners: that Dell's direct sales force would sell to SonicWall partners' customers and offer discounts that the partners themselves were unable to offer.

"We cater to customers who are willing to pay for the value-add we bring to the table," said Martinez, who found that in the two years since the purchase of SonicWall the threat didn't prove to be that big after all. Western NRG caters to SMB customers with 50 to 150 employees.

Yes, a lot of SonicWall partners were miffed at Dell, old SonicWall employees left and soon partners left, opting to sell another vendor's product. The survivors reaped the benefits, including Martinez, who decided to take an opportunistic view of partnering with a company with a global footprint.

"We're capitalizing on being a Dell partner in two ways: growing our customer base and our menu of offerings," he said.

Martinez worked to get his company on Dell's radar -- and continues to do so. The 20% compensation accelerator Dell offers its direct sales force to work with partners around its enterprise offerings also works in the partner's favor, even if it hasn't brought in as many new customers as he would like it to.

"We've gotten a few producers although I wish we had more," he said. "We've met a handful of direct sales guys who understand that it's in their best interest to work with us to meet their quota for selling SonicWall so they embrace it as a successful way of doing business," he explained.

Martinez sees the writing on the wall: Dell's privatization story will flesh out less as a direct sales force strategy and more of a channel strategy, he said. "That was Dell's promise from the get-go, but I believe it now," he said.

In addition to the success that Western NRG has enjoyed selling SonicWall over the years, more recently the partner has had success selling Dell SecureWorks managed security services.

With its first customers under contract, the partner is currently implementing the solution that Martinez hopes will grow from a $25,000 initial opportunity to one worth $100,000 next year.

The SecureWorks managed security service is a higher level of service that Western NRG can offer customers that need security beyond the managed firewall service offering already on the partner's menu.

Dell encouraged Martinez to expand his company's security offerings. "Dell is in our face more than we can digest with emails, seminars, conference calls, town hall meetings -- it's overwhelming," he said.

The partner has also sold a Dell Compellent SAN, a Dell blade chassis and high-end Dell switches -- about $300,000 worth of other Dell products within a six-month sales cycle.

With the 2013 security breach at retail giant Target still front of mind for many business executives and other IT buyers, as well as revelations about the U.S. NSA surveillance practices, Dell and other vendors should capitalize on greater security awareness among customers, according to Kindervag.

"Now is the time for anyone who wants to be in the security business to double down and get aggressive," he said.

Dell may have brand recognition and equity in the market that the company and its partners can leverage, but it's not a shoo-in for Dell in the software space.

"Dell has to demonstrate a strategy that's not just about product but one that solves a customer's business problems," he said.

Next Steps

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What will Dell's SecureWorks deal mean for managed security service providers?

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Has Dell done enough to differentiate its security software products from those of its competitors?