SonicWALL, One Identity GMs Talk Changes as Both Spin Off From Dell

DELL SECURITY PEAK 16 — At the end of the third quarter, SonicWALL will be a private, independent company, while One Identity will be an independent company operating under Quest Software.

Curtis Hutcheson is vice president and general manager of Dell SonicWALL, while John Milburn is executive director and general manager of Dell One Identity.

Hutcheson will head up SonicWALL and Milburn will head up One Identity when they officially split from the parent company.

In June, Dell announced it was selling its software division, including Quest Software and its SonicWALL security business, to private equity firm Francisco Partners and the private equity arm of activist hedge fund Elliott Management for more than $2 billion. The deal should close at the end of September.

The split has been a hot topic at this week’s Peak 16 conference in Las Vegas.

In a Q&A with Channel Partners, Hutcheson and Milburn talk about what lies ahead for their respective companies and their goals for growth.

Channel Partners: How is your company most being impacted by the split? {ad}

Curtis Hutcheson: First, I think the future is very bright for us. It’s about leveraging the great relationship we have with Dell, but in a channel relationship and an arms-length relationship, and an OEM relationship. And more importantly, over 80 percent of our business is run through these VARs who run customers’ networks, and they really had no understanding of what was going on in “big Dell,” and the programs weren’t tailored for them. So it’s really about running the channel for them, being the best network security solutions provider for them.

John Milburn: This business came from the original acquisition of Quest Software in 2012. At that time, a decision was made to pull the identity business out from the other five businesses of Quest and align it with the recent acquisition of SonicWALL. After four years, we certainly didn’t see the leverage between the two buying groups and buying motions as we expected. Going forward, it won’t be that way.

What’s beneficial to me in this change is I’ve been at a 10 percent channel resale percentage of my business for the last five years and that means that every year if I want to grow, I have to add a linear amount of salespeople. That is not a long-term growth strategy, especially in a market like identity that is rapidly changing. So one of the benefits to me in this shift is I’ll be able to …

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… continue down a path of building a channel ecosystem without having to depend on that channel being the existing SonicWALL ecosystem. So we are really excited about taking that 10 to 20 percent and with the goal of 40 percent of our licenses to go through resellers by the end of calendar year 2018.

CP: SonicWALL will be launching its new Secure First Partner Program. Will One Identity also be launching a new partner program?

JM: Yes, we will be launching our One Identity (partner program) at the close date and at the same time. This is the first time ever … we have our own advisory board going on his week, and part of that is making sure that we’ve got alignment on the details of this specific program – and it’s not just trying to jam something that Dell created or SonicWALL created – and actually applies to people who want to focus in this space.

CP: Do you see increasing freedom in terms of focus, strategy, etc., with the split from Dell?

CH: Yes. … Every single thing we do in our company will be singularly focused on being No. 1 in small to medium-size enterprise network security. Every single thing. Every way we interact with the press, every decision we make on the product, everything we do for sales, everything we do for customer success. And when you’re part of a much larger company, sometimes things are done for you that make sense for a $60 billion company that aren’t optimal for (a company the size of SonicWALL) and that’s the real benefit for us.

JM: Absolutely. It’s not as drastic as it appears. Even though we’ve been part of the SonicWALL family, midyear last year we recognized that, as far as the go-to-market process goes, there really wasn’t leverage between the two, and all the way up to the top-level management we had marketing people, selling leaders, services leaders and support leaders that lived and breathed only the One Identity product line, and just based on that, we’ve seen the best growth I’ve seen in my last 20 years over the last three quarters. So going forward, that’s just going to continue. Even more focus and more ability to chart our own destiny.

CP: How will your responsibilities change?

CH: I think you’re going to see really good management continuity. We’re still ironing out those details, but the whole team is here and you see everyone is really committed and excited about this. It’s going to be a bright future for the VARs and good continuity in the team. 

JM: Not particularly dramatically. From a reporting structure – sales and customer success, services and report – while they didn’t report to my direct line in the past … that will be a direct reporting line. Actually it changed last month. That’s the only real change. But we were all working together as one big, happy family. Everybody was already focused on the same goal. So it’s not a dramatic change, just an evolution of …

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… the momentum we’ve achieved over the last few quarters.

CP: What are the biggest issues facing your company going forward? How will you address them?

CH: I think the biggest thing is for us to reiterate [that] we’re the market leader, we need to be growing above market, which is high double-digit kind of above the teens, and getting back into taking share and making sure our competitors know we are back and we are the No. 1 player in small-to-medium enterprise.

JM: There [are] some market issues and then there [are] some separation issues. Let’s talk about separation issues first. Unlike the majority of Quest, we actually got a burst of growth when we were acquired by Dell — as these are extraordinarily expensive, long-term projects in this space, and having that Dell brand name significantly helped us grow over the last four years. From a separation perspective, that is the thing that we are dealing with the most on a negative basis, just the concern from our partners, from the analyst community, etc. Is this really a viable, standalone business outside of the loving arms of Dell? The way we’re addressing that is head-on communicating with our customers, with the analysts, with the press, and what they’re all acknowledging is at the end of the day, this is a $250 million business that is growing three times the market and at a very healthy rate of profit.

From a market perspective, my market is changing. So we are shifting our product line as well. So over the next 12 months, we’ll shift our portfolio from being 100 percent on-premises enterprise software to, by the end of next year, about 40 percent of our portfolio will be SaaS-delivered, which is a lot lower friction, a lot more viable to our VARs in that particular channel. And over the three years we expect that to go to 60-70 percent as the market goes.

CP: Where do you see your company a year from now?

CH: There are three main goals for the business. We want to continue to be recognized for the most effective, easiest to manage network security products for small-to-medium enterprise. We want to continue to have the highest customer satisfaction with our installed base. Both of those metrics seem to be looking very good. And in the middle of that, it’s all about growing the business above market, getting the VARs back that we lost through this last transition, while maintaining the good things we built with Dell.

JM: In terms of partner strategy, my long-term goal is I want to have more channel managers than salespeople. Right now, that’s majority salespeople. We will be one of the only independent companies that intend on managing identities and the identity security problem. That’s compared to Microsoft, Oracle, IBM and CA.