How being acquired changed this vendor's customer profile

Clearswift CEO sets out how its takeover by RUAG has seen its customer base change, and why he is committed to the channel

Clearswift's acquisition by Swiss firm RUAG in 2017 has led to an increasing number of defence organisations as customers, according to CEO Heath Davies.

He told CRN that in the last couple of years, the data prevention loss vendor has seen increasing demands from organisations that work in the critical national infrastructure (CNI) space, such as defence contractors, water companies and central government.

Davies (pictured) attributes this to the takeover of Reading-based Clearswift by Swiss giant RUAG, which specialises in developing technology for the defence and aerospace sectors.

"These organisations are getting the sense that they need the degree of protection that we've historically implemented for defence players," Davies explained.

"They're now seeing that for commercial reasons, they need to be able to offer a similar level of defence themselves, from a data loss prevention perspective.

"Nearly all our growth has come from that market. Historically, as we've grown, we've seen growth in lots of different areas, but it hasn't been concentrated in one specific catchment like it is now with CNI.

"In the last two years, we've seen more growth there to notice that the market is pulling us in that direction and now we are looking at the global drivers that would make us more relevant to that market.

"You'll start to see us do a lot more, becoming more visible around that space and talking about the capabilities we are bringing to particular segments of the market."

Clearswift reported annual recurring revenues of £25m for its year ending 31 December 2018, an eight per cent increase from 2017's figure.

Last year marked the first full-year integration of Clearswift into RUAG's operation, though Davies said that it has kept the cybersecurity firm separate to its operations.

He explained that this is the "icing on the cake" because it allows Clearswift to exploit RUAG's global ecosystem, but without having to compromise its own operations as a smaller company.

The CEO joined the cybersecurity firm in 2012 when there was much confusion around what type of channel model it was going to implement, he explained.

Davies was "not a fan" of a multi-tier system and steered the company towards a single-tier model.

He explained that 90 per cent of its sales are now through the channel, and the 10 per cent indirect sales are from military-based customers that want to interact directly with the vendor.

"We don't actively go out in pursuit of those particular opportunities and where we can we put them through the channel," he said.

"When you see the performance of the business today and it continues to grow both top line and bottom line through the use of the channel, you'd want to be a very brave person to want to change that model."