Peer Power Blog
This blog is about the power of peers in the IT space. It is designed as a place to share things I have learned the past 24+ years running a business as well as meeting the growing demands of business owners we experience leading the Heartland Tech Groups - a peer group network for IT business owners.
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Thoughts on the SonicWALL Acquisition
It has definitely been an interesting week on the vendor front. The news of Dell's acquisition of SonicWALL certainly caught me off guard, and obviously did many of you based on the volume of emails I have recieved on the subject. On the ride over to Cedar Falls on Wednesday to work with HTG member ACES, I got a call from Matt Medeiros who is CEO at SonicWALL. He had Marvin Blough, who leads sales there, on the phone with him and wanted to catch up with me about the announcement Tuesday that Dell was buying their company. I have to say that these guys are a class act. They didn’t call to put a spin on what was happening and try to sway me into the Dell camp.
I’ve had my share of challenges with Dell over the years in how they have worked in the SMB market, and have made some strong statements about their approach in the marketplace. But during our call we were able to talk facts and the background on the deal. I absolutely trust the SonicWALL leadership team – and am not making any rash decisions on what may happen. Let’s face it – the sun came up this morning like it did the day before. Nothing has really changed. There is potential for all kinds of outcomes, but it is irresponsible to make judgment on that before we see what happens and what the integration will look like. Unfortunately I find that often people make decisions without truly evaluating the facts.
Relationships are the core of life and business. They are hard to build, and harder to maintain. But throwing away relationships because of a change in direction, a statement you disagree with, or a disagreement about strategy makes no sense at all. We need to recognize that we are in the relationship business. That is what our role is – to invest in people and create connection and community where we can do life and business together. That cannot happen when we treat our relationships like something we can just throw away when it is no longer meeting our expectations or needs. That is wrong.
Relationships happen because of commitment. That is what happens when we walk down the aisle to be married, or we choose to do business with a company. And it makes no sense – not even a little sense – to throw away a relationship that often has many years of nurturing and history because something has changed. Life is full of change. Relationships have to adapt. They have to be a little flexible to allow for the changes that life will bring.
Before you turn and walk away from any relationship, consider how hard it was to build it, and how much harder it will be to build the next one. As hard as it is to sometimes repair and fix a broken relationship, it is harder to create a new one. If you have some that are on the rocks – take the time to humbly go and make things right. At the end of our conversation, I asked Matt and Marvin to send me some thoughts I could share with the HTG family. They have done so and their observations are below.
Dear HTG Partners,
It has been an interesting week and I am glad the dust is beginning settle a bit. I have spoken with a few of you over the last two days including an honest and frank conversation with Arlin. Arlin asked that I sent a note directly to the HTG members with our take on the acquisition.
As expected, many of you have valid concerns about Sonicwall becoming a part of Dell. We absolutely understand. Actually, if you re-wound the clock to 90 days ago and told me that Dell was going to acquire Sonicwall, my reaction would have been……Really? Dell? How does that fit?
But over the last two months that we have negotiated and worked with the people at Dell I have changed my opinion. Dell is a company in transformation. They are in a race to move as fast as possible from being a low cost PC and Server manufacture, and a reseller of other peoples products, to becoming a full solution provider based on their own intellectual property. If you look at the acquisitions they have done over the past two years it is about accelerating that transformation. The most telling are Equalogic and Compellant, both of which were, and still are, channel based companies. Both of which enabled Dell to move away from being the world's largest EMC reseller and into a position of adding their own value to their own Intellectual Property. Their acquisition of KACE moved them into systems management, and yes, a channel based company that continues a channel go to market. Sonicwall is the latest, and by no means the last, acquisition that broadens their portfolio to become more strategic to their customers.
More important is that part of this transformation is embracing a channel model. Much to my surprise, they have made huge gains on the channel side. Approximately 30% of their business now flows through the channel and is growing…..that is $20 billion through the channel. They have 100,000 channel partners worldwide, and over 65% of Sonicwall partners are registered in Dell's program. They have made their sales commission credit agnostic so that channel fulfillment is same as direct.
Another factor is that Dell has gone to great lengths to make sure that the employees of Sonicwall are retained, and not just short term. Most of us, including myself, George, Kevin, etc. are "Channel Guys". We have lived channel in some form for our entire career. We built Sonicwall from $0 to $300 million on a channel. I am assuming that if they are making efforts to keep us in the family then we will likely have influence on their channel designs. And you will find no greater channel advocates that the people of Sonicwall.
When forming your opinion on the acquisition and making your plans for the future, I would ask that you take the whole picture into consideration. Take a fresh look at Dell and what they are doing. You have been a great Partner, and when we use the word Partner we mean it. And yes, of course we are going to do everything possible to make sure we continue to be Partners.
At Sonicwall we live by a set of core values handed down by Matt. One of those is "Trust is given not earned". I am still a firm believer in that because I have seen the amazing things that people can do when empowered and enabled. We believe that we have been given your trust and we fully intend to keep it. I could go on for a few more paragraphs, but this is all just words. What is going to count is what we do and the actions we take.
None of us can predict the future, but I truly believe that there is opportunity in this for all of us.
VP WW Sales
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