CRN Interview: Bill Roach, CEO, SonicWall

Cosmo Santullo's resignation as CEO of SonicWall this summer meant a changing of the guard at the Sunnyvale, Calif.-based maker of Internet security appliances. Bill Roach, senior vice president of partners, alliances and strategic accounts, was named interim CEO. Roach, who is a candidate for permanent CEO, recently spoke with West Coast Bureau Chief Marcia Savage about SonicWall's market strategy.

CRN: What are your goals as interim CEO?

ROACH: The company has never really focused on operational excellence. That's an area we really need to shore up and [make far more efficient and productive. That really translates to robust, repeatable processes so you can scale. We're underachieving internationally. We're putting a lot of focus on refining our strategy and channel profile around the world. Our remote-access solution [Tele3 product series is getting great traction. We have a time-to-market lead with those types of appliances that we want to exploit to its fullest. We can be more productive with our product development. I'd like to see the road map getting filled out with more innovative, differentiated products. We've gone too long with certain platforms and models, and we need to refresh it, enhance it and offer exciting products for our channel to sell.

CRN: What would you like to see in product development?

ROACH: We see great opportunity in the wireless LAN market, and we believe that security is an enabler for wireless LANs to get broadly adopted in the enterprise. We have a refresh of our SOHO line coming out at the end of this year [and there will be some exciting new features we've added to it. The performance of the appliance has been enhanced substantially.

CRN: What was your focus in your previous role at SonicWall?

ROACH: I had three very different activities. One was business development. I was looking for leverage with our technologies, partnering with other companies to OEM our product or license our product or co-develop product. I had an enterprise sales organization chartered to sell our remote-access solution to large enterprise companies through resellers, VARs and integrators. We're still actively recruiting VARs and integrators that reach that large enterprise with a focus on the edge of their networks in telecommuting or point of sale. SonicWall is dedicated to a two-tier channel model.

CRN: Would you explain that model?

ROACH: It's 1,400 U.S. resellers fulfilled by two national distributors,Ingram Micro and Tech Data. This broad group of resellers is reaching small and medium enterprises for security and connection. Our products are appliances that provide firewall protection, VPN connection. Everything we do we design for and with our channel, so the products we conceive, the services we offer, the support we provide, the positioning we do, are all in mind of product delivered through that channel. We set our compensation programs to keep the loyalty and enthusiasm of the channel, and it's working quite well.

CRN: How much of SonicWall's business goes through the channel?

ROACH: Eighty-five percent. The other 15 percent is OEM business.

CRN: Is SMB still your target market?

ROACH: Yes. There's still some confusion as to where SonicWall is participating with the large enterprise and what it was trying to do. The confusion was around a perception that SonicWall was trying to get into the core network, competing against companies like Check Point head on. That was never the strategy. We thought that the logical place we could extend our products and technologies was the edge of that network,telecommuters, retail outlets. We interoperate with that core network, but we're not there offering products or services in that segment.

CRN: Why is the SMB market so important?

ROACH: In the very near term, it's apparently the only place that's growing. The small and midsize businesses now believe and understand why they need security. They're not experts in it. They go to their local resellers, the same reseller that had been selling them networking equipment, and ask them a solution for security.

CRN: How would you define an SMB?

ROACH: It's usually a business that has an average 50 or fewer nodes and 500 or fewer employees.

CRN: How does SonicWall plan to compete against companies that are trying to get into the SMB space with the types of appliances you make?

ROACH: There's this view that there are a bunch of newcomers to the market trying to commoditize the business, selling at price points substantially lower than ours. There's a misunderstanding of what customer they're reaching. An appliance selling for $150 or $195, that's reaching homes through retail outlets. That's never been our target market. A lot of comparisons are on the appliance itself. We stand up well in terms of performance and features. But what is missed in the whole analysis is this envelope of support that we give the customer. We have a Web site,www.mysonicwall.com. Customers can buy services like content filtering or antivirus, all via that support Web site. That is a substantial differentiator that's important to the small-business person. People who are trying to commoditize a firewall are attempting to reach that customer, and they're not. We have some formidable competitors starting to get interested in our space coming from above. Right now, the biggest differentiator we have to that competitor is our channel.

We reach the right customer with a motivated, loyal channel. If you look at the performance of some of our large competitors trying to get into this space, they have, in my view, a very schizophrenic view of how to get to the customer. They set up a reseller channel and then take business direct, frustrating their channel.

CRN: Who are the formidable competitors coming to this space?

ROACH: NetScreen, Check Point, Symantec.

CRN: What are your channel plans?

ROACH: It's continually refining and evolving what we do. We have a number of standing councils, where we're constantly getting feedback from our channel in terms of what's working and not working. We're always vigilant about profitability. If we're making moves about prices or discount offerings, we're always ensuring that whatever we do does not make our offering less attractive to the reseller from a financial bottom-line perspective. We're going to be rolling out our next program for the channel that has some additional features and incentives.

CRN: What are you doing in the area of service opportunities for VARs?

ROACH: I just left a meeting where we were talking about a big effort to get a higher attach rate on renewals. Our channel does a nice job of selling support services. We're designing a program and enabling that program with some technology back at SonicWall that will make their efforts more productive to get every customer who has a service contract to renew that contract. Again, it is our intent that the channel gets the benefit of all that renewal revenue.