WatchGuard CEO Departure Won't Signal A Strategy Shift, Partners Believe


WatchGuard Technologies partners say they are not concerned about the company's health or overall direction following the resignation of its CEO this week.

The Seattle-based network security vendor said Tuesday that Joe Wang, who has led the company since 2007, stepped down from the position this week. The company named Michael Kohlsdorf, an executive from Francisco Partners, the private equity firm that holds a stake in the company, as its interim CEO while the board of directors conducts a search to fill the role.

Wang could not be reached for comment. A company spokesperson said the search for a new CEO is expected to take about two months.

[Related: WatchGuard's Thurber Touts APT Detection Service To Channel]

WatchGuard has been building new security capabilities into its unified threat management (UTM) appliances, SSL VPN and email and Web security gateways. In April, the company added cloud-based suspicious file analysis capabilities to detect advanced threats. The APT Blocker service is sold through a licensing agreement with Santa Barbara, Calif.-based Lastline. It also added a SaaS-based dashboard that provides visibility and reporting tools.

Interest in security is moving from chief security officers to CEOs, and even small-business owners are realizing that they need much more than a simple firewall to safeguard the network from threats, said WatchGuard channel chief Alex Thurber, the company's vice president of sales. It is business as usual at the company, which has been in a period of strong growth, Thurber said.

“Joe had a great time here and wanted to pursue other interests,” Thurber said. “I think we are in the right position at the right time and partners are excited about the advances we've made in the market.”

WatchGuard is in a crowded arena vying for a larger share of the small- and midsize-business market with its UTM appliances, competing against Check Point Software Technologies, Cisco Systems, a combined Sophos-Cyberoam Technologies, Dell SonicWall and Fortinet. The company is open about its strategy of licensing its security technology from other vendors, including Kaspersky Lab, McAfee, Sophos, Symantec, Websense and others.

WatchGuard partners say they are happy with the company's commitment to the channel. Solution providers receive strong technical support and sales and marketing assistance, said Richard Galganov, CIO of Dallas-based managed services provider HBR Technologies.

"The change in upper management shouldn't affect the direction of the company from my perspective because it's been a strong product for many years," Galganov said. "We have strong expertise in the implementation and support of their products so it doesn't make much sense for us to change horses midstream."

WatchGuard also is readying some significant channel program changes, Thurber said. The aim is to retool the program to focus less on volume-selling and reward partners based on meeting technical certifications, he said. The changes were partially unveiled during a meeting with Watchguard's partner advisory council last week at the company's annual partner conference.

Thurber said growth has been strong following an increase in margins from 5 to 20 points for its XTM 525 series UTM appliances in October. There haven’t been any major adjustments to the program since then, he said.

“It will partly depend on what level you are as a partner, but this is a pretty major revision to make sure there is strong engagement in the program," Thurber said.

PUBLISHED MAY 16, 2014