SonicWall CEO Says Revitalization Under Way

In an interview with CRN Thursday, Medeiros reported on his progress as SonicWall's chief after the security vendor posted a second-quarter loss of $8.1 million, or 12 cents a share, on $21.4 million in revenue.

The second-quarter results compare with a loss of $2.1 million on $27.7 million in revenue for the same quarter a year ago.

Excluding restructuring, amortization and other charges, the company reported a loss of $4.2 million, or 6 cents per share, which compares with Thomson Financial/First Call consensus estimates of a loss of 2 cents per share.

When he joined SonicWall in March, the Sunnyvale, Calif.-based maker of Internet security appliances was selling both direct and through the channel, Medeiros said.

"One of the first things I did when I stepped in is said, 'We're not going to have this competitive environment. We're going to live and die by the channel.' The channel has the best and farthest reach that we can get," he said.

That strategic decision hit SonicWall's sales organization hardest in terms of numbers as the company reduced its workforce, he said. The company last month announced a cost-cutting plan that reduced its employee base by about 15 percent and closed some facilities.

On the technology front, SonicWall is retooling its entire product line, Medeiros said. "By the end of the year, we will have 50 percent all new products in our offering." The product blitz will start at the end of this quarter but will mostly happen in the fourth quarter, he said.

Of particular interest to its solution providers is SonicWall's API development, he said.

"We're developing broader and deeper APIs. The APIs will allow us to get software development communities [that are] building software products for our products. That has tremendous impact on the reseller community," he said. "Our box sits at the edge of networks, so therefore our resellers have an opportunity to sell solutions around that edge where our box sits."

SonicWall also is retooling its Medallion partner program to focus on partners' ability to provide services and support rather than on sales volume, Medeiros said.

"We're looking well beyond just the value from the dollar standpoint and much more around the services and support that our resellers can continue to provide to our customers," he said.

Moving forward, SonicWall's biggest challenge is increasing international sales, Medeiros said. And there's always the competition.

"The No. 1 competitor is Cisco. We've got the 800-pound gorilla that's dancing and we've just got to learn how to dance faster," he said.