SaaS security vendor Proofpoint has hinted it will ditch distribution in the UK and other mature markets as it bids to get closer to resellers that can help it penetrate the large-enterprise space.
Flush from its recent IPO, NASDAQ-listed Proofpoint is on an international expansion drive and recently appointed former Sophos executive Ciaran Rafferty as vice president for northern Europe, the Middle East and Africa.
Rafferty (pictured below) has already made a series of tweaks to the channel strategy, including switching from a discount-based to a retained-margin model to give resellers more predictability.
The vendor, which works across the fields of email and spear phishing protection, privacy and DLP, archiving and governance, has also spent recent months forging direct ties with more UK resellers as it looks to distance itself from distributor Exclusive Networks.
It already worked directly with NTS and Gradian Systems but since Rafferty joined, eight more direct VARs have been added, including Computacenter, Trustmarque and Accumuli.
"My view is the closer you are to the partner, the closer you are to the end user," he said. "If you have lots of hardware appliances and credit, distribution has a place, but if there isn't, it becomes a lot less relevant. Any new partner we sign up [in the UK] now will be single tier.
"In regions where we do not have a physical presence, such as the Middle East and Africa, we will have a two-tier approach."
Rafferty said that ProofPoint draws the majority of its $106m (£69m) revenue from SaaS and that it is hunting for partners who have an appetite to work with a channel-focused outfit in the SaaS security field who is not one of the market's "monsters".
Retained margins will typically be between 20 and 30 per cent, depending on deals, while there are strong service attach opportunities around its archiving and governance portfolio, he claimed.
"I had been at Sophos for five years," Rafferty said. "The company was moving into a very small and mid-sized market strategy and my skills are very much in enterprise as well as small business. It was time to move on to the next piece, which is cloud, and ProofPoint is leading that."
Proofpoint has also realigned its sales team so staff are focused on its core vertical markets of financial services, professional services, utilities, retail, pharmaceutical, telecoms and public sector, rather than regions of the UK.
Rafferty said UK partners are seeing the fruits of ProofPoint's stated aim at the time of its IPO of expanding internationally and bulking out its portfolio through acquisition – this week it snapped up SaaS email security outfit Mail Distiller.
"I thought long and hard before I joined the firm and it has a fantastic strategy ahead of it for the next four to five years," he said.
Barrie Desmond, group marketing director at Exclusive Networks, an outspoken critic of "mixed" channel models, welcomed the fact that ProofPoint is committing to a clear partner strategy.
He argued that distributors will be as vital as ever in the cloud era but may need to evolve to become "cloud aggregators" or "triages" for resellers looking to make sense of the many cloud solutions on the market.
"I wish ProofPoint all the best," Desmond said. "It's good that they are sticking to their guns and going single tier. Maybe it's time for them to be wrong and not confused."
Scott Haddow, chief executive of Trustmarque, said the VAR had added ProofPoint to its vendor stable for two reasons.
"Its technology is good and, secondly, we are confident the team Ciaran has assembled has a demonstrable track record and we know we can work with them," he said.
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