Barracuda Networks Post-IPO: Focus On The Channel

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Barracuda depends heavily on subscriptions. According to its prospective, 69 percent of its revenue for the six months ending Aug. 31 came from 190,700 active subscribers, down from 71 percent of revenue for the same period a year ago. The company has a renewal rate of 93 percent in fiscal 2013, up from 89 percent in fiscal 2011.

Despite the losses, the company in the last 18 months has invested in business that Barracuda's Jenkins said will help accelerate the company's growth. Those investments include R&D, which Jenkins said resulted in seven major product releases in the last 12 months.

Customers don't closely watch the financial numbers from a company like Barracuda, VLCM's Mellor said. "The main thing in this industry is word of mouth," she said. "If a product is doing well, that's what counts."

On the channel side, Barracuda has over 5,000 channel partners globally, Jenkins said. Synnex has been Barracuda's primary distributor, but the company in October expanded its distribution reach with the addition of Arrow.

Going forward, Barracuda is looking to take advantage of its storage and security offerings by creating what Jenkins called "Barracuda shops," which are customers who purchased three or more of the company's products.

Jenkins said there are currently about 5,500 customers considered to be Barracuda shops, up from about 1,000 such customers three years ago.

Mellor said VLCM's customers include a few who only have Barracuda in their data center. And, she said, with new offerings from Barracuda, the number of Barracuda shops could grow.

"But some products may overlap with what we're selling from Hewlett-Packard," she said, referring to VLCM's primary vendor partner. "HP has such a breadth of products, we often may not offer similar products from other vendors, including Barracuda. For security, we rely on Barracuda. But when it comes to storage and backups, we have other offerings.


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