10 Things To Know About A Combined Accuvant-FishNet

A New, Giant Security Partner Emerges

Accuvant and FishNet closed Monday on their colossal merger, creating a $1.5 billion security giant with 1,400 employees and ties to every key vendor in the industry.

The hard integration work now begins for FishNet, No. 46 on the CRN Solution Provider 500, and Accuvant, No. 48 on the CRN SP 500, as they decide on a new company name, reorganize their sales territories and harmonize their more than 100 service offerings.

Mark Williams, president and chief operating officer of the combined company, and Rich Fennessy, former CEO of FishNet, both spoke with CRN about integration priorities, the new executive team and expansion opportunities. Here's what they had to say.

10. Company Will Get Entirely New Name

The new executive team won't decide on a company name until early in the second half of the year, but it definitely knows one thing: Neither the Accuvant nor the FishNet moniker will live on.

"We will have a brand-new company name," Williams told CRN. "We will have a brand-new identity."

Opting for a new name entirely will make it easier for Accuvant and FishNet to move forward as a single, unified company, Williams said.

The site for the new corporate headquarters remains undecided, as well, though Williams said the company will retain a meaningful presence in both Denver, where Accuvant is based, and Overland Park, Kan., where FishNet is based.

9. New Executive Team Rich In Experience, Knowledge

The new executive team -- three-quarters of whom came over from Accuvant -- brings industry knowledge and a depth of understanding of the IT security space to the table, Williams said.

Williams praised the financial, operational and sales aptitude of the executives tapped to stay on, adding the team should also provide a strong sense of company culture.

Leaders at both companies have proven that they know how to run a security solutions business, Fennessy said, given that both firms have been growing roughly three times as fast as the rest of the market.

Those drafting the team also took into consideration which executives had things they wanted to do outside of the company, Fennessy said.

8. Some Execs Moving Up, Others Moving Out

Williams said he and former Accuvant CEO Dan Burns will lead the new company, with Williams managing the day-to-day operations, and Burns charting the firm's strategic direction and interfacing with customers and vendors.

Just two of FishNet's leaders procured executive roles with the new company.

Former FishNet Executive Vice President of Sales Mike Bossert will assist for a period of time with bringing the sales team together, Fennessy said, while former CTO Brandy Peterson, and Founder and Chairman of the Board Gary Fish will move onto new opportunities.

Fennessy said he will work as an outside consultant for the next six months, giving advice to the new company on both strategy and the integration process.

7. Number Of Jobs Lost Will Be Minimal

Accuvant and FishNet both came into 2015 expecting to bring on more employees -- 125 in the case of FishNet -- and Fennessy said the completion of the merger shouldn't affect that part of the business plan.

"The whole strategy here was not a cost-takeout strategy," Fennessy said. "This is about bringing two high-growth companies together."

Even in the back office, Fennessy expects the redundancies to be minimal because the new company will, for instance, need more people in purchasing and accounting to handle the increased business.

Williams said some workers will see a change in their roles and responsibilities as a result of the merger, but concurred that job loss should be minimal.

6. Product Harmonization, Cross-Selling Top Priorities

Accuvant and FishNet have spent the past several months doing detailed integration planning, Williams said, coming up with a separate plan for every area within the company.

The short-term priorities are numerous, Williams said, and include getting FishNet customers access to Accuvant's product line (and vice versa), as well as harmonizing the more than 100 service offerings between both companies so they can go to market in a coherent fashion.

Some of the behind-the-scenes work included bringing the IT systems together around the NetSuite platform, creating new territories for the sales team, and coming up with a single way to bill and collect money from customers, Fennessy said.

"Now the hard work starts," he said.

5. More Offerings, Shorter Waits Expected For Customers

Customers of both companies should see enhanced service offerings and additional technical resources within the first half of the year, Williams said.

End users will benefit from the joint company's deeper bench, broader expertise and more complete set of service offerings, Williams said.

Both companies have struggled mightily with services backlog, with Fennessy indicating that it has sometimes taken FishNet two to four months to deliver service orders because its people were booked solid with other customer engagements.

Almost no cannibalization is occurring, because Fennessy said just 100 of the company's 10,000 combined customers do $50,000 of business with each solution provider.

4. Company To Consolidate Offices In Some Markets

The merger leaves the combined company with 60 offices across the United States and Canada, but Williams said it won't remain that way for long.

The united company now has two offices in some major markets such as Denver; Williams said the firm intends to consolidate into a single office in those areas.

The company is looking to expand into a couple of North American markets, Williams said, as well as growing its overseas operations in the long term.

If the company ultimately decides to grow its presence in Europe, Fennessy said it would be much smarter to pursue a merger or acquisition rather than build the business organically.

3. Combined Company Should Be Magnet For Talent

FishNet had its best year ever in 2014, growing revenue by 30 percent, Fennessy said, while Accuvant has enjoyed a compound annual growth rate of 22 percent between 2009 and 2013. But that has created challenges.

"When you're growing 30 percent, it's hard to find enough talented labor," he said.

Fennessy hopes the expanded skills and capabilities of the new entity will be a magnet for talent in the industry, with plans in the works to showcase their technology on university campuses.

With the right people, Fennessy thinks the combined company, which currently does $1.5 billion in sales each year, can grow into a $2 billion to $4 billion company.

2. Customers Gain Access To Each Firm's Specialties

The combined company should be more effective at spotting emerging trends and responding to customer needs as the speed, frequency and complexity of cyberattacks continues to increase at an alarming rate, Williams said.

Part of that equation will be additional manpower, as Williams said the combined firm employs 650 consultants and engineers.

Although both companies already had very broad security services portfolios, Fennessy said the merger will introduce more customers to the unique specialties of each firm.

For instance, Fennessy said Accuvant has a LABS research arm that examines complex issues, such as penetration testing and vulnerability assessments, while FishNet differentiates itself with a strong identity access management practice.

1. Managed Security Practice To Expand, Extend Offerings

The new company plans to invest early on in managed security services, which Williams said is the fastest-growing business for both companies.

The investment will initially be focused on scaling the platform to meet existing market demand, Williams said, and then will turn to expanding the firm's managed security offerings.

The combined company will take a hard look at its security operation centers (SOCs) during the integration process, with no decisions yet made. FishNet opened its second in Atlanta last year, while Accuvant opened its first in the Baltimore-Washington, D.C., corridor in 2013.

Williams said the additional SOCs should provide capacity to support the tremendous growth in managed security services.