Sophos Buys Small Cloud Email Security Vendor To Aid MSPs

Sophos has acquired Reflexion Networks to bolster its offerings around cloud-based email security and support for managed service providers (MSPs).

The Burlington, Mass.-based vendor said the deal, which closed recently and was revealed Tuesday, will fill a major gap in Sophos' security offering and potentially allow for better integration with professional service automation (PSA) and remote management and monitoring (RMM) platforms such as Autotask and ConnectWise. Terms of the deal were not disclosed.

Sophos had spent the past nine months looking at email security players to acquire, according to Bill Lucchini, senior vice president of Sophos' Cloud Security Group, and ultimately settled upon Reflexion because of its technological prowess, ease of use, ability to provide enterprise-class protection and reputation among MSPs in North America. The pending deal was first reported in CRN last month.

[Related: Sources: Sophos To Acquire Email Security Player Reflexion Networks]

"Everyone we talked to had great things to say about Reflexion," Lucchini told CRN. "Life only gets better as we add more resources to address the problem."

Reflexion, based in Woburn, Mass., has 20,000 end-user businesses, a couple of thousand MSP partners and less than 50 employees, all of whom are joining Sophos, according to Scott Barlow, Reflexion's vice president of sales. Reflexion's archiving, email encryption and business continuity services will be folded into Sophos' Cloud division, Lucchini said, and the two partner programs will eventually be merged.

Becoming part of Sophos will give Reflexion partners access to higher-value services around Web security, anti-virus software and unified threat management, Barlow said. Reflexion partners currently either lean on basic Web content filtering services such as Net Nanny for security services or aren't in the market at all, Barlow said.

"Frankly, they have been limited by what they can do as a startup," Lucchini said. Both Sophos and Reflexion sell exclusively through the channel, according to the companies.

The deal will also provide Reflexion with access to new geographic markets, more customers and a larger sales force, Barlow said. The margins should be fairly consistent between Reflexion's email security offerings and Sophos' endpoint security, mobile device management and server security products, according to Lucchini.

Sophos could learn some lessons from Reflexion around how to better serve the managed services market, Lucchini said. The majority of Sophos' Cloud business is sold on multiyear term licenses, while Reflexion operates exclusively on an MSP-friendly monthly recurring revenue model.

Additionally, Sophos Cloud doesn't today integrate with PSA and RMM solutions traditionally used by MSPs, according to Lucchini and Barlow, while Reflexion provides its partners with a fully integrated, self-service, on-demand platform for Autotask, ConnectWise, LabTech and others.

Sophos Cloud's channel partners span the gamut from large-scale, national solution providers to traditional, product-oriented VARs, Lucchini said, while Reflexion is more deeply immersed with MSPs and month-to-month services. Some limited overlap exists between the channel partners of each vendor, Lucchini said.

Reflexion is Sophos Cloud's second acquisition since it launched in 2013. The group also acquired cloud-managed and appliance-based security services firm Mojave Networks in October.

Sophos Cloud has an aggressive growth strategy going forward, Lucchini said, and is open to either building its own capabilities in emerging areas of cloud security or acquiring a market leader in the field.

"We're open for business if the right security solution is out there," Lucchini said.

Sophos has a good track record of effectively integrating previous acquisition targets, according to Sean Stenovich, partner and owner of Sophos partner M&S Technologies. The Farmers Branch, Texas-based company, No. 335 on the 2015 CRN Solution Provider 500, expects the deal to enhance Sophos' product line and allow M&S to provide a more complete offering to its customers.

"Sophos has my belief that they'll do well with this product," Stenovich said.

Email security typically falls midway down the wish list of M&S customers, Stenovich said, though demand tends to be a bit higher at the midmarket companies that make up the sweet spot of Sophos' clientele.

"I don't have customers beating down my door for email security," Stenovich said. "At the same time, it doesn't mean it's low on their totem pole."

PUBLISHED JUNE 9, 2015