Mid-market is the next big opportunity for WatchGuard: Scott Robertson

"The consolidated landscape is a massive opportunity for us as we continue to be a pure security player focused on UTM/XTM solutions"

Scott Robertson talks about how the company has kept pace with the changing times in the security industry.

CW: Your company's core focus, UTM, is a fairly commoditized technology. Considering this, how bright is WatchGuard's future?

Robertson: There are couple of things that are changing at WatchGuard which are also changing in the UTM market. Ever since its introduction in 2007, this market has been maturing at a rapid pace. In 2010, WatchGuard decided to re-architect solutions through next-generation network security appliances [XTM] in anticipation of its growing importance to the mid-market.

The XTM with one firmware spans across all hardware platforms - from lower-end models to the top-end ones. For a firewall/UTM appliance to deliver more throughput and other capabilities, we built the Intel platform with a Linux kernel. With Linux and UTM being modular in design, a new security service can be plugged in at anytime from best-in-class vendor technologies and they will be integrated into our UTM. This is unlike some vendors who build AV and Web-security in-house and integrate them to their appliances. This is a big differentiator as we are increasing our footprint in the mid-market which prefers the best security brands. The trend is shifting towards the mid-market and we are in talks with a few large enterprise vendors.

CW: Aren't you worried that companies you're seeking an alliance with could explore the UTM market independently?

Robertson: The industry has always been talking about the unpredictable nature of the security roadmap. Often, we see that technologies like wireless and security are blended together. We know that we do our job very well. Similarly, other vendors we intend to collaborate with know theirs well. So, I don't see our OEM partners jump into the firewall/UTM space and intensify competition.

CW: WatchGuard lacks full-blown DLP and authentication solutions. Why is that?

Robertson: Our technologies in XTM and XCS do offer content security. This, not only delivers spam and Web security solutions, but also provides powerful DLP capabilities. It shouldn't surprise anyone if we decide to integrate some technologies to differentiate ourselves more. We are not just a pure firewall/UTM vendor anymore. We are now a business security vendor with a range of technologies for organizations of all sizes.

CW: Don't the acquisitions of McAfee, SonicWALL, Astaro, and others by big IT companies weaken your standing in the industry?

Robertson: Most acquisitions, particularly ones by large vendors, are difficult to integrate. The acquiring company doesn't necessarily focus on the acquisition and the smaller company doesn't have any clout in the big one. It often becomes an SKU on the pricelist. We see many vendors consolidate to become a part of a large group where the dominant products are not UTM. R&D tends to become skewed towards products that generate more revenue. These acquisitions are usually successful after three to five years. Thus, the consolidated landscape is a massive opportunity for us as we continue to be a pure security player focused on UTM/XTM solutions.

CW: How do you think your enterprise channel partners should pitch WatchGuard to execute profitable business deals?

Robertson: We try to address the concerns of large enterprise system integrators by presenting two questions: What can we do for you and how can we position ourselves better to help you. We tell them clearly that XTM is not just a security solution, but is a TCO story. With large integrators, security solutions are usually a part of a larger project with technologies like virtualization and storage which tend to get more priority. The value proposition of one platform console and other features of XTM free a CIO's budget and help them invest in other technologies. WatchGuard's RapidDeploy is a cloud-based configuration utility that eliminates the need for IT professionals to pre-configure devices or travel to the project locations. Customers and partners can order the appliance from a single distributor and it will be shipped directly to the customer. It's a huge benefit for partners working with organizations with distributed networks. We have also identified a few MSS partners to explore the UTM-as-a-service model in India.

CW: Compared to Cisco and Juniper, you seem to be less aggressive about the enterprise segment and fighting off competitors.

Robertson: A certain amount of business might sound attractive in the enterprise market. We have a sizeable customer base here. That space has two elements--core network and data sold. Most large enterprise vendors manage their network, but often WatchGuard products are bundled in it. SMBs continue to be our big strength but the next big opportunity is the mid-market and not the enterprise. Let Check Point, Cisco, Juniper, and the rest battle it out as their framework is largely geared for the enterprise space

CW: Considering the competition, isn't the mid-market a tough space to do business in?

Robertson: Our primary distributors in India are RAH Infotech and iValue who work with their set of channel partners. We also engage with a focused set of solution providers in the tier-2 space. There has been tremendous growth in the past six to 12 months in terms of geographical reach. A substantial part of that growth has come through large, complex deals. Apart form metros, we are targeting B- and C-class cities where many mid-sized companies are located. We plan to align with more tier-1 partners in the latter half of this year.

CW: According to Gartner, 20 percent of the VPN/firewalls will be deployed on a virtual switch on a hypervisor and not on a physical security appliance. Are partners ready for this major shift?

Robertson: It's still early days in terms of adoption. We have released products on a virtual platform like XTM for both VMware and Hyper-V. We also have the XCS product on VMware. Most customers will invest in the physical appliance with a virtual strategy in place in the next couple of years. Our SMB dominance will certainly drive more Hyper-V for virtual UTM. Since the last year, a majority of the partners we've worked with are VMware partners too. This is a natural fit and, therefore, our partners are being empowered according to changing trends