Clearswift attributes strong financial performance to channel overhaul

Security vendor reshaped its UK business strategy to a 100 per cent channel model

Clearswift's strong financial results have been driven by an overhaul of its channel strategy, the vendor claims.

The security software firm reported an annual EBITDA rise of 20 per cent to £5.8m for FY16, with bookings rising 12 per cent to £24.7m over the same period.

Senior vice president at Clearswift Guy Bunker told CRN that this success is down to a major restructuring of its UK business model to a 100 per cent channel strategy.

"That has had a huge impact on our numbers because, as a small company, a lot of our scalability moving forward is through partners," Bunker explained.

The transition started two years ago and has resulted in Clearswift dealing entirely through the channel globally, other than a small amount of legacy business in the US.

Under the previous management regime, Clearswift had moved into direct business which "doesn't do you any favours with the channel", Bunker said.

Since Heath Davies took over as CEO in 2012 however, the firm has set about building strong relationships with channel partners, he added.

"One of the initial expectations was that it will happen overnight, but actually it takes a lot of time and effort to build, and that's why it has taken a couple of years to come to fruition," he said.

In 2011 Clearswift cut its ties with UK distribution and has operated a one-tier channel strategy ever since.

The vendor still has distribution partners in areas outside the UK and the DACH region, but channel vice president Helen Wood told CRN there are no plans to change the strategy in key areas such as the UK.

"As we are today, we're not at a size where we need to get any help from distribution," Wood said. "That direct touch [with partners] is still a good thing and it is something that partners, in the main, really enjoy as well."

Bunker added that in a two-tier strategy, the distributors take over a large chunk of partner education responsibilities, but the one-tier approach has let Clearswift become very close to the "handful" of partners that it works with in the UK.

As its partners become more self-sufficient and independent, the vendor may look for "another couple of partners" to work with in the UK, Wood explained, but this is not something she expects in the foreseeable future.

"Part of our attraction to our existing partners is that they are not under huge competition when they go out talking about Clearswift. It gives them a value over and above their competitors," she added.