‘We Are Going Through a Channel Transformation’: 5 Takeaways from Barracuda Discover 23
Barracuda CEO Hatem Naguib reveals key areas for investment that includes channel transformation, customer success and unification of partners.
![Hatem Naguib at Barracuda Discover 23 Hatem Naguib at Barracuda Discover 23](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blt51d638bdbffcb972/6523f9d4d41e33180369b786/Hatem-at-Barracuda-Discover-23.jpg?width=700&auto=webp&quality=80&disable=upscale)
“We are going through a channel transformation at Barracuda,” said Barracuda CEO Hatem Naguib. “We still operate two entities: one managing MSP and one managing Core [partners]. [But] we brought a lot of work together to bring those two entities together to operate as one team when you work with us. I hope you’ve begun to see that has begun to deliver results for you. So that you can see far less ineffective and unproductive activity, and more alignment with the one team strategy that we’re trying to pursue,” the CEO told partners.
“It’s still an early journey for us. There’s more transformation we’re going to be doing between MSP and Core. We know that more and more of our champions are going to be adopting MSP capabilities, and we have to be thinking about that as part of an overall ecosystem of solutions, with marketplaces, value-added reselling and the components related to MSP being how we want to deliver.
Naguib said Barracuda has made “substantial investments” in its customer success organization. The organization has around 35 people worldwide working with customers. Their role is to ensure they successfully adopt products, expand the usage of their products and mitigate any churn.
“The team has been tremendously successful at managing our highest-touch, highest-value customers over the last year. We’ve seen a remarkable drop in churn. We’re expanding their capabilities with technology to ensure that the smaller customers, those who are trying the products for the first time, get the same value-added channel success model that we’ve built,” he said.
The CEO noted that more customers are looking at platforms and consolidation as a key component for how they want to drive their IT security strategies. This is because they don’t have enough resources to manage individual niche products. But it also related to budget concerns and how they can leverage multiple vendors to map their security strategy. Naguib said three-quarters of companies are looking to consolidate their security vendors, with around half are looking at 10 or fewer vendors.
On that note, he said Barracuda has “a maniacal focus” on convergence. Naguib said the vendor will do better at unifying of its products. He also promised an improved user experience that will be easier to deploy and manage.
“We continue to focus on world class efficacy and made substantial investments in the machine learning and AI capabilities that we’ve had for the last several years. [And] upped the game in terms of protecting our customers from the nuanced lot of security threats.
“And we continue to innovate, as we’ve taken the amazing work that we’ve done protecting Microsoft 365 SaaS applications and begin to expand that to the hundreds of SaaS applications.”
Naguib said a prudent investment strategy fortified the company from the current headwinds facing many tech vendors.
“A lot of investment came in during the COVID crisis and people expected a different profile of how they wanted to manage their business. So large tech companies hired large numbers of people, under the assumption that this was the new normal. As always, you have to be running a business to make sure that you’re managing profitable growth. This is something that Barracuda has done in its 20 years – at its core as a business we’re profitable, every quarter since our inception. We were more prudent,” he said.
“Growth at all costs didn’t make a lot of sense. When money is free it’s very easy to just pour more money into more resources because the higher growth gets accommodated in terms of valuations. We’re back now to what I think is the right approach, which is good growth; good profitability builds healthy businesses.”
“The managed service model has helped us really think about an ecosystem,” said Naguib. “How we provide support for our partners. As a managed service provider, it’s difficult to have a single vendor solution throughout the entire portfolio. It is important for us that we build models that support third party providers. Whether that’s in the professional services automation or remote management. And then as you look at the solutions for managed XDR, it’s an open XDR solution. There are 30+ vendors we have to support.
“For a lot of partners, they’ve seen tremendous benefit and opportunity as Barracuda’s done the heavy lifting and the hard work associated with setting up and managing a security practice. [It] allows them to accelerate getting values to their customers and becoming a much more value-added provider,” the CEO added.
“The managed service model has helped us really think about an ecosystem,” said Naguib. “How we provide support for our partners. As a managed service provider, it’s difficult to have a single vendor solution throughout the entire portfolio. It is important for us that we build models that support third party providers. Whether that’s in the professional services automation or remote management. And then as you look at the solutions for managed XDR, it’s an open XDR solution. There are 30+ vendors we have to support.
“For a lot of partners, they’ve seen tremendous benefit and opportunity as Barracuda’s done the heavy lifting and the hard work associated with setting up and managing a security practice. [It] allows them to accelerate getting values to their customers and becoming a much more value-added provider,” the CEO added.
Barracuda celebrated its 20th birthday last week at its EMEA partner summit, Barracuda Discover 23.
The event also marked a year since the vendor was acquired by global investment firm KKR in a deal reportedly worth about $4 billion. The firm was keen to relay how it has invested in the channel over those past 12 months. CEO Hatem Naguib outlined key areas for investment that included channel transformation, customer success and building a platform-based business.
One result of its investment in the channel is a new partner program that’s due to launch in the second half of 2023. The program acknowledges the importance of MSPs to Barracuda’s business model, giving them equal footing with its reseller partners.
“To the partner who’s doing multiple things, they want to see Barracuda as one company. Unifying these programs is going to be an important step,” said Naguib.
He was speaking with Channel Futures at the event in Dubrovnik, Croatia.
“Unifying the resources that are allocated while recognizing that it’s a different business model — when you’re doing managed services from when doing value added reselling. But helping those partners, as many of them are doing both.”
See the slideshow above for five takeaways for partners from Barracuda Discover 23.
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