SonicWall Puts Cisco, Fortinet In Crosshairs With Push Upmarket

SonicWall has launched a full-court press to land larger customers through more co-selling with partners and adjustments to its compensation model for sales reps.

The Milpitas, Calif.-based platform security vendor said it can compete and win against the likes of Cisco and Fortinet as it goes after clients with more than 500 employees thanks to better margins, more personal attention for partners, a lack of channel conflict, and a compelling end-to-end security technology story, according to Steve Pataky, SonicWall's SVP and chief revenue officer.

"Let [Cisco] keep scoffing at us. When they look down and their lunch is gone and I'm chewing on it, then they'll know we were there," Pataky told CRN. "Screw it. I don't care. They can keep thinking about us as the SMB company. I'd rather them not think about us. I'd rather them ignore us. Keep ignoring us. Keep ignoring us."

[Related: CRN Exclusive: SonicWall Achieves Full Independence From Quest Following Strong Investor Interest]

Cisco declined to comment on the record for this story.

SonicWall began efforts in August to extend its dominant position beyond SMB – which the company defined as clients with less than 500 employees – and into the enterprise, or firms with 500 or more employees, according to HoJin Kim, vice president, North America channel sales. SonicWall had worked with enterprise customers previously, Kim said, but almost entirely on a transactional basis.

"We've got compelling reasons to go talk to customers that are a little bit larger in size and have a little bit more at play," Kim told CRN. "We're the world's best-kept secret."

SonicWall has largely been pigeonholed as an SMB play due to its history and market dominance there, but Solutions Granted has enjoyed great success selling it into the mid-market and enterprise, according to Michael Crean, president at the Woodbridge, Va.-based SonicWall partner.

Similarly, Encore Technology Group has found that SonicWall NSA line has performed very well in supporting all of the iPads and Chromebooks in K-12 settings with 25,000 or more users, according to Michael Knight, president and CTO of the Greenville, S.C.-based partner.

"SonicWall has a rich feature set on the unified threat management and the email side," Knight said.

But although SonicWall's technology has gone into the enterprise space, Knight said the company has struggled with marketing and telling that story in the right way. Knight encouraged SonicWall to do public proof of concepts with public sector and enterprise customers in a variety of verticals to demonstrate what types of threats the technology can discover and mitigate.

Anything SonicWall can do to cut down on integration work is helpful when serving larger customers in the state, local and education (SLED) market, according to Julie Neely, president of Napa, Calif.-based Napa Valley Networks. Specifically, Neely said a single pane for licensing, compliance and analytics will make it easier to detect when there are issues and help cut down on administrative costs.

"We love the product. We've been selling it since the beginning of SonicWall," Neely said. "It's easy to use, but robust enough to handle larger clients."

Vendors servicing the SMB tend to rely completely on the channel, but when dealing with the enterprise, Kim said customers expect some level of direct touch, or interaction with the company's sales, technical or support organization. As a result, Kim said SonicWall has gone through significant changes in its sales organization to make sure the firm's sellers are more active in front of customers.

Most traditional sales organizations have a channel person that's responsible for nurturing and growing the vendor's business with a particular partner and a separate sales team tasked with working directly with the end customer, Kim said. But at SonicWall, that person is one and the same, which Kim said helps avoid solution providers and customers being told different things by the same vendor.

Midsize partners with annual sales of between roughly $100 million and $250 million are going to be a higher priority to SonicWall than Fortinet, Kim said, since SonicWall has fewer partners at that size. By working with SonicWall, he said these partners can enjoy better margins, a stronger vendor relationship, and a differentiated technology story that they're not going to get from the Fortinet's of the world.

"Every time you go out and find an opportunity for Fortinet and run into conflict with their end user sales reps or don't get a call back from your Fortinet rep when you need the help, think about how much more relevant you'd be with SonicWall," Kim said.

Specifically, Kim said partners working with Fortinet encounter both conflict with other Fortinet solution providers on the same opportunity, as well as conflict between Fortinet's direct sales team and channel sales team.

"I hear a lot of partners that are disenfranchised with Fortinet," Kim said. "I hear a lot of grumbling. The experience of working an opportunity at Fortinet is sometimes very, very difficult for partners."

Fortinet didn't respond specifically to the claims made by SonicWall, but said it remains 100 percent committed to its channel go-to-market and credits its partner ecosystem for helping the Sunnyvale, Calif.-based platform security vendor achieve 24 percent year-over-year revenue growth in North America in the quarter ended June 30.

SonicWall offers partners ample margin upfront for transacting as well as incremental back-end incentives, Pataky said. But unlike the company's biggest competitors, Pataky said these incentives aren't meant to compensate for a lack of margin in the deal upfront. SonicWall's laser-like focus on security and opportunities for higher margin help separate it from competitors like Cisco, Pataky said.

"We don't build out a professional services organization like Cisco does. We don't try to compete for managed services," Pataky said. "It's about letting those [partners] add value and be paid for it. And that's why we see the profitability scores that we get from our channel partners."

SonicWall also changed its compensation models to make individual sales reps more directly accountable and responsible for the amount of business that's being done with specific partners, Kim said. Although some level of shared quotas still exist within a collective territory, Kim said SonicWall needed to do more to ensure the right resources were been pointed at the right partners.

"I firmly believe that we should be investing in partners that invest in us," Kim said. "I want to make sure that I've put my most trained and capable hunting resource in front of that platinum partner."

In addition, SonicWall is now having its own sales reps and sales engineers (SEs) going to customers alongside the partner's salesperson and SE, according to Matthew Brennan, vice president, U.S. sales west. Although this is something much of SonicWall's competition has done for a while, Brennan said it wasn't something SonicWall began doing until recently.

Vendor presence is an absolute must when attempting to establish a relationship with a new enterprise customer since it helps legitimize the solution provider, according to Crean of Solutions Granted.

"I'm never going to have the name recognition of SonicWall," Crean said. "It's a global brand."

Co-selling will primarily help existing SMB partners attempting to move into the enterprise space, Knight said, since resellers already selling into the enterprise and managed services providers typically have the trust of their customers to select whichever product they think is best. Existing enterprise partners would primarily benefit from greater availability of demo equipment and proofs of concept, Knight said.

Longstanding SMB SonicWall partners that show the propensity, have the acumen, and are willing to invest in what's needed to sell to enterprise customers are encouraged to move upmarket alongside the vendor, said SonicWall's Pataky. The company has some 17,000 channel partners globally, including more than 5,000 transacting quarterly in North America, Pataky said.

SonicWall is additionally very open to recruiting net new partners with a footprint in the enterprise, Pataky said. There is no specific number of new partners the company is looking to add, with the company instead assuming that hitting its revenue, pipeline and demand generation figures is a sign of adequate channel coverage.

"I don't want a cast of millions," Kim said, "because then nobody makes any money and everybody runs into the same problems that a lot of mature vendors face."