'We're 30 years old but we feel like a start-up' - Sophos CEO

Security vendor has seen four years of growth following a static period, which CEO Chris Hagerman claims has been driven by a switch to a 100 per cent channel model

Security vendor Sophos has "the feel of a start-up company" following three years of strong growth, according to CEO Kris Hagerman.

Hagerman took the helm at Sophos in 2012 to lift the firm out of a "flat" period.

In the three full years since he joined, Sophos has seen billings growth of five per cent, 17 per cent and 20 per cent respectively, and also launched its initial public offering (IPO) in London just over a year ago.

Sophos reported a revenue jump in May from $446.7m to $478.2m year on year, but also an operating loss of $32.7m, largely because of the IPO.

"One of the questions I am asked a lot is 'how is it that a 30-year-old company, with $500m of billings a year, can start to act more like a start-up company, and start growing again after being flat for so many years?'" Hagerman (pictured) said.

Hagerman claims a turning point came at a management meeting at the vendor's Abingdon base four years ago. At this point Sophos was "trying to do a little bit of everything" by selling to companies of all sizes, both direct and through the channel.

To address this, Hagerman and the executive team stripped back the firm's operations and narrowed the focus to predominately mid-market enterprises with all business going through the channel. Hagerman says this eradicated issues other vendors still face when dealing both direct and through partners.

"What happens is you inevitably have conflict," he said. "A channel partner might go out to a particular customer and a direct sales rep from the company will go to the same customer with a different price and the whole thing becomes confused and difficult. We have no channel conflict. We have clarity and it really works."

Sophos currently has 20,000 partners globally, with the EMEA region accounting for half of its business worldwide.

Key to Sophos' future success is its "synchronised security" concept that integrates network security with end-point security, which Hagerman claims is a unique offering.

"For the last 30 years it has been like one security guard working outside a building and one working inside a building," he said. "They are both doing their job, but only doing their job themselves without any way to communicate with each other.

"What Sophos is doing for the first time with synchronised security is giving those two security guards radios to talk to each other. We think it's a powerful idea that will make security easier to use and more effective at the same time."

Hagerman told CRN that this form of integration has not been seen before because vendors have historically grown up being in either end-point security or network security, but rarely both - making it incredibly difficult to fuse the two together.

The system is controlled by the Sophos Central console that allows Sophos VARs and MSPs to manage all their clients' security products through a single management system. The console also sends alerts directly to the partner when one of their clients is experiencing a security risk.

James Miller, managing director of MSP and Sophos partner Foursys, said that a big advantage of the synchronised security offering is that it is cloud based. This means it no longer matters if the end user is connected to the network or out in the field.

"This coming together of those two pieces of technology is really revolutionary," Miller said. "We don't have this from any of our existing vendors.

"They've stolen a march on it and delivering it all in that cloud-based offering - I haven't seen anything like it and I certainly haven't spoken to any of our customers who have seen anything like it either."

James Lyne, global head of security research at Sophos, explained that while it has always made commercial sense for a partner to sell a whole security solution from one vendor, for the first time it now makes technical sense.

"It's one of those things where you say 'why didn't anyone think of that before?'" He said. "We've not only delivered on a promise of making things more slick from a commercial perspective, we are genuinely making the products better at threat protection.

"They are going to perform technically better than if you source them from different companies. That, aside from doing a better job for your customer, also means it's easier to support as a partner."

Hagerman has now set his sights on growing Sophos' five per cent market share. He says the firm is currently growing at twice the rate of its competition in both the network and end-point sectors, and as a result is taking market share away from the likes of Symantec, McAfee and Trend Micro on the end-user side of the business, and Dell Sonicwall, Cisco and Check Point on the network side. He is also planning to increase the number of partners the vendor deals with globally and highlighted areas where they are "underpenetrating" - including the US, Latin America and Asia-Pacific - as a focus.

"We feel like we are just getting started," he said. "We could literally double the size of Sophos over the next four or five years to become a billion-dollar company and still have less than 10 per cent of the market."