Dell Adds New Channel to SonicWall Channels

Dell said that SonicWall has more than 15,000 global distributors. Dell plans to select SonicWall's best channel project to integrate it with its own PartnerDirect project - and let its PartnerDirect dealer push SonicWall's UTM software and SuperMassive next-generation firewall .

John Swainson, president of Dell's software division, took charge of Dell's newly established software department's rudder and began to advance at full speed. He acquired firewall and threat management software and equipment maker SonicWall. The total transaction amount was not announced.

SonicWall was founded in 1991 by brothers Sreekanth and Sudhakar Ravi. It sold Ethernet cards, hubs, and other networking equipment. During the dot-com dotcom boom, the company released a firewall and virtual private network equipment for small and medium-sized businesses. It has since been on the right track and was listed on the Nasdaq in November 1999. Four years later, SonicWall formed a new management team led by then-CEO Matt Mediros.

As early as 2010, private equity firm Thoma Bravo and Ontario Teacher’s Pension Plan Board joined forces to acquire SonicWall at US$11.5 (or US$717 million) per share. At that time, SonicWall had US$ 002 billion in cash, and in the year ending December 2009, SonicWall’s product sales were US$73.8 million, a decrease of 25.4% over the past two years, and licensing and service revenue increased by 26.4%. To 126.7 million U.S. dollars. The company's unified threat management tool business accounted for 77% of total sales, while content security management software accounted for 10%, VPN products accounted for 9%, continuous data protection and backup software accounted for 4%. In 2009, SonicWall’s net profit was $13.2 million, almost three times that of 2008, but less than half of 2007.

Dell said in a statement that it will receive 950 employees of SonicWall and plans to continue investing in the development of this business. Dell said that SonicWall has more than 15,000 global distributors. Dell plans to select SonicWall's best channel project to integrate it with its own PartnerDirect project - and let its PartnerDirect dealer push SonicWall's UTM software and SuperMassive next-generation firewall .

In a conference call with Wall Street analysts this morning, Dell said that SonicWall has accumulated $260 million in revenue over the past 12 months and has more than 300,000 active customers worldwide. Dell expects the acquisition to be completed in the second quarter of fiscal 2013, which ended in early August. With non-GAAP standards, SonicWall's revenue will be accumulated into Dell's earnings in the second half of FY2013.

SonicWall has over 139 patent applications in the US Patent Office and the Trademark Office, and 6 applications have already been issued. This is one of the reasons why Dell is interested in SonicWall. In addition, Dell hopes to strengthen its own security product line including SecureWorks. Dell acquired SecureWorks in January 2011, when the latter’s income level was approximately $120 million.

Another reason Dell sees SonicWall is that the unified threat management market in 2011 is about US$2.4 billion and will increase by approximately US$3.9 billion by 2015. Moreover, the UTM device and software maker will strengthen Dell's security portfolio:

Dell's idea is to use SonicWall products to provide data center security, use KACE equipment to ensure the security and management of customer equipment (including PCs, tablet devices, and smart phones, etc.), use AppAssure backup and monitoring files, use SecureWorks to monitor threats and provide Other security services.

Each part of the Dell product line comes from a series of recent acquisitions. Dell acquired KACE in February 2010 and acquired AppAssure just three weeks ago - it has more sophisticated data replication software than SonicWall. Dell did not disclose the amount of these acquisitions. KACE had 125 employees when it was acquired, 230 AppAssure and 700 SecureWorks.

In this conference call, Swainson said that unified threat management is very important to Dell because in emerging markets, many customers are purchasing their first UTM products. In mature markets, many companies need to upgrade their existing ones. UTM equipment. Regardless of where these companies come from, they are faced with more and more data distributed in various devices and IT systems. "Customers view security as one of their critical IT risks - in many cases, even their major IT risks."

Medeiros said that in the two years of the past year, SonicWall’s revenue focus has gradually shifted from hardware devices to software and services.

Medeiros said that it will use Dell's influence in the enterprise data center to recommend SuperMassive UTM devices to corporate customers, and in the past, SonicWall has chosen more remote branches. Previously, Dell had cooperated with SonicWall in reselling SuperMassive devices.

Medeiros said that of the $260 million in revenue, approximately $130 million came from the software and services support business, of which about two-thirds of the revenue (that is, about $87 million) was deferred subscription revenue. SonicWall's overall business grew by more than 10% last year, but the transition to software and subscriptions meant that SonicWall sacrificed hardware revenues to obtain deferred revenue from software and subscriptions. This is a purposeful one.

But don't understand it wrong. Medeiros said that last year, the revenue of the SuperMassive firewall increased by about 25% compared with the previous generation of hardware devices, so hardware is still important for SonicWall and is also very important for Dell.