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.
Thanks,
Marvin Blough
VP WW Sales
Sonicwall, Inc.
Comments
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Thursday, 15 March 2012In my view, partners should take time to digest all the facts. Dell is definitely changing and their course and direction is pretty clear. SonicWALL partners will have plenty of time to evaluate whether SonicWALL under Dell will suit their client needs and business strategy. For most, I think it will be a good thing.
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Friday, 16 March 2012
Why all the angst over the acquisition of a company that wasn't best in class, or even in the top three? SonicWALL partners can switch to Cisco, or offer a managed SOC solution to their clients. It's just not that big a deal. Manufacturers, and technology in general, change all the time. The key is to focus on implementing the best solutions for clients, and remain agnostic when it comes to a particular manufacturer.
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Friday, 16 March 2012
Every point Arlin makes about how hard relationships are to build and maintain, about how relationships are core to life and business, are why I don't trust Dell based on their track record. Trust is an incredibly strong bond that is easily broken by betrayal.
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Friday, 16 March 2012
Hi!
Very nice post by you and nice message from the SonicWALL guys.
When I saw the announcement from SonicWALL in my inbox Tuesday AM, I kind of shrugged my shoulders and thought hmmmm..."interesting, but we are a SonicWALL partner, have invested with them and will continue to partner with them". That is a different take than I would have had 4 years ago (prior to HTG). Perhaps even different than 2 years ago.
We are a small player with SonicWALL (in the scheme of things), but exclusively sell SonicWALL products. They have proven to me, first with Ted Hulsey and now with Charlie Coughlin that they are a company interested in the success of their partners. No matter the size.
I did not form the conscious thought (like you did) about new partnerships being hard to build. But rather saw no reason to ditch all the work we have done with SonicWALL, just because they were acquired by Dell.
Said another way, we have been an exclusive HP shop for 9 years now. We have seen our PBMs go away (to the "cloud" in a manner of speaking) and have thought some of their decisions were dumb. But...they have excellent products and on the rare chance we would have a major problem, I know whose levers I could pull.
I saw a lot of e-mail this week griping about Dell being "bad" and people re-evaluating their relationship with SonicWALL. Or touting their security vendor as "solid" and that SonicWALL partners should come over from the dark side. What a waste of time. So far nothing has changed with SonicWALL. If it ever does, I will worry about it then.
In closing I feel it is more about the relationships you build (like you said) than the shiny object talk of "my security vendor is better than your security vendor".
Chris -
Friday, 16 March 2012
I've yet to hear one Partner (at any level) who believes this is a good for them.
Ernie's post sounds nearly identical to the email I sent to everyone I could find in SonicWALL earlier this week, and sounds identical to every other Partner's story and history with Dell as well.
It's unfortunate that SonicWALL rose to such great heights on the backs of their Partners and now is in bed with a company who is definitely NOT pro-Channel and really didnt even take any of us into consideration.
Many of us were caught off guard by this, and didnt have our contingency plans in place because we were naive to think that SonicWALL wouldn't be overcome by the power of the mighty dollar. While I'm sure nothing is going to change overnight, I think we all know that within 12-16 months SonicWALL devices will be sold en-mass through Dell's 100,000 Partners (instead of SonicWALL's 15,000) and they'll be a commodity item.
Since we know what we are up against in 12-16 months, as Ernie so prudently pointed out, we really need a "Plan B" and our company is vigorously checking out other devices/vendors and products for replacements to the SonicWALL product line. As renewals, new installs, and replacements come up it's highly likely that it won't be a SonicWALL product going in this time (unfortunately) since we pretty much know what we have to work with in the next year and a half with Dell. -
Friday, 16 March 2012
My company is an admittedly small company that has attained Silver Partner with SonicWall. That relationship, the part in how SonicWall's Channel works with me, is excellent. My goal has been to return that favor by working at building a company that SonicWall can appreciate.
I also work with Dell, not as a partner but as a company that sells Dell equipment. Dell has always treated me very well and their service and support are, in my opinion, as good as it gets.
Not being omniscient, knowing what's going to happen in the future regarding Dell SonicWall can only be related to my experience with Dell and one of their other acquisitions: Equallogic. Having just brought an Equallogic SAN online for a company I can simply say that I was not disappointed. That is my hope, no--that is my expectation of Dell SonicWall. My hope is that they work with the incredible channel that SonicWall has built. With that, I have a chance. -
Monday, 19 March 2012
Over the past 4 years, Our Dell Channel teams around the world have worked hard to build long lasting relationships by listening to and reacting with our channel partners. We have integated EqualLogic, Compellent and Force10 into Dell without taking away programs or benefits. In most cases, we have enhanced the benefits to all partners. We will continue to work hard to preserve all partnerships and to grow our channel realtionships by listening to any and all concerns. I encourage any partners who have concerns with the future to reach out to me personally. I can be reached at gregory_davis@dell.com. Your comments and feedback are valuable to us and you can count on Dell to work hard to win your business and devleop a long lasting channel program
GREG DAVIS
VP & GM Dell Global Commercial Channels -
Monday, 19 March 2012
I hope to believe Dell did not buy Sonicwall to transistion the sales to their direct model. However, every day that I keep builing more security systems for Sonicwall, I am certain I am cutting my own throat.
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Monday, 19 March 2012
Marc, with past acquisitions, we preserved most of the channel business and then grew our business with partners much faster than those companies had done before. Our goal is to preserve and grow all the channel business we can.
GREG
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This is not a change in direction or a throw away of a relationship. This is a business that will be consumed by a culture that has a track record of mismanaging partners, have little regard for the channel and the relationships in the channel. We are not talking about SonicWALL taking over Dell and Dell isn't acquiring SonicWALL to learn about how to manage the channel. Unfortunately as we saw with the acquisition of Silverback, servers were purchased and soon after, Dell was calling the client to offer MSP services.
Arlin, I like your thoughts, but doesn't HTG ask that we always have a contingency plan? After 12 years of SonicWALL as our sole provider of security appliances and sitting on SonicWALL's Advisory Council, I will be looking for an alternative and ramping up so I am not cornered. when Dell rears its ugly head we will be prepared.
This may make sense for SonicWALL, but it doesn't work for the channel.