Sophos' combative market stance pays off

New initiatives and strong growth reveal predatory mindset in the Sophos camp

Sophos HQ: The vendor, which is unique in operating a one-tier channel model, expects 2009 growth to be “well into double digits”

The quiet man of the endpoint security market is turning up the volume as it strives to make itself heard above larger rivals Symantec and McAfee.

Resellers have seen more naked ambition from Sophos since June, when Ciaran Rafferty joined as UK county manager from SAP reseller Seidor.

IDC figures provided by Sophos confirm that the privately held firm is still dwarfed by Symantec and McAfee in the corporate endpoint security market. Its 2008 sales stood at $206m (£126m), compared with Symantec’s $640m and McAfee’s $508m.

However, while Symantec and McAfee grew just 0.7 and 5.8 per cent respectively, Sophos grew 34 per cent

Talking to CRN, Rafferty argued that Sophos – which is unique among its peers in operating a one-tier channel model – has turned up the heat on its two main rivals.

“When I came into the business we were not being aggressive enough and saying to customers ‘put us on the list’,” he said.

“Now we are being much more aggressive than anyone. If our competition is putting FUD [fear, uncertainty and doubt] into the market, it shows we are winning more business than them and people will see through it. They should be worried.”

Among the new initiatives introduced since Rafferty’s arrival is ‘Cashback’, which offers lower-level partners 15-points additional margin on deals if they exceed a quarterly target.

Meanwhile, top partners such as Bytes and Softcat have been handed extra resources to target 50 new accounts in verticals such as retail, finance and professional services.This comes on top of the new partner programme Sophos launched in April, which it claims offers the best margins in the industry onregistered deals.

Shaune Parsons, managing director of VAR Computer World Wales, began selling Sophos earlier this year and admitted it has dislodged Symantec as its preferred anti-virus product for the SME market.

“Because you deal directly with it, rather than through distribution, everything is a bit slicker,” he said.

“Its web portal is very good, its prices are excellent and you get rebates based on targets. Out of all the vendors, it is the one that has impressed me this year.”

Such is its aggression, CRN was recently contacted by a rival vendor who suspected that Sophos had begun taking some deals direct.

Rafferty flatly denied this, emphasising that 90 per cent of Sophos partners quizzed in its last partner survey in July gave the vendor a positive approval rating on trust.
“In the UK we have not done any new business without partner involvement,” he confirmed. “That’s why we get such high trust ratings.”

Martin Hellawell, managing director of Softcat, said the software licensing giant has enjoyed a good run with Sophos during the downturn.

“Sophos is growing significantly with us and we find its profitability is quite good if you understand and use its system properly,” he said.

“There is a renewed vigour around account mapping.”

Paul Prior, managing director of Foursys, added: “At a management level, Sophos is a lot more active and commercially involved. It has strengthened its product range pretty significantly in areas where the other guys have not done so well, such as encryption and data leakage, and then integrated it into its main product line.”

Sophos recently extended Cashback to its new partners and Rafferty listed reseller recruitment as a priority for 2010.

“In the UK we have about 1,800 resellers and are looking to grow that,” he said. “But it is important to look at the white space by geography or industry.”

The vendor is also planning several further improvements to its channel in the coming year. This includes formalising its new managed service provider programme
and expanding the e-commerce capabilities of partners.

Chris Doggett director of global channels at Sophos, said: “In the US, customers can visit the partner’s website and renew their Sophos products. We would like to introduce this on a global basis in 2010. It makes it easier for partners to sell at the small end of the spectrum.”

Doggett revealed that Sophos – which recently completed its acquisition of encryption vendor Utimaco – expects 2009 growth to be “well into the double digits”.

“If we are growing at that rate you can easily ascertain at whose expense it is,” he concluded.