Sophos Partners Say Astaro Acquisition A Potential 'Win'

Sophos' is expanding its reach into the unified threat management arena with its planned acquisition of Astaro, a move that channel partners say will broaden its portfolio and create more competition in the SMB network security space.

Sophos on Friday said it intended to buy Wilmington, Mass.-based Astaro and praised its strong play in the network security appliances space.

Astaro, with a wide array of network security appliances, provided an attractive target, touting $56 million in billings and about 30 percent year-over-year growth, largely in European markets.

Thus far, Sophos has primarily played in the endpoint security, Web threat and data loss arenas, potentially putting it at a disadvantage when going up against other established UTM players such as Juniper, Fortinet and SonicWall.

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However, Arabella Hallawell, Sophos vice president of corporate strategy, said that the UTM space is something it's had its eye on for a while after seeing gaps in the market created when traditional network security appliances fell short, often cobbled together by OEMing numerous technologies from multiple sources.

Looking ahead, Sophos plans to integrate Astaro's network security technologies housed in its UTM devices with its own endpoint, mobile, e-mail and data protection capabilities, providing a broader and more comprehensive security portfolio.

"We see that network security is a complementary adjacent market for us," Hallawell said. "We've built our endpoint products and network security is a new business we're going into. The combination of adding a lot of our content together is going to create an extenuated solution. That's why we picked a partner that had great expertise and great products."

Matt Fogelgren, Sophos director of North American channel sales, said that the acquisition also was a good fit because both companies came from a similar channel culture, with Astaro selling 100 percent through the channel. Touting about 2,500 partners worldwide, Astaro's channel program would eventually be folded into Sophos' to create a single, unified program.

Fogelgren said that training programs were being put in place to ramp up channel partners from both companies on the new technologies.

"There are going to be some partners that don’t do each other's core competencies," he said. "One size doesn't always fit all when you start offering broad range of solution sets. But a number of partners are asking 'how do I start getting involved in this?' It clearly hit a nerve with our partners."

Sophos channel partners say that the acquisition represents a strong diversification move for the company.

Andrew Plato, CEO of Beaverton, Ore.-based Anitian Enterprise Security, said that a network security offering infused with Sophos' solid endpoint and data loss prevention technologies could be a win for the company -- if conducted correctly.

"Sophos has good solutions, but they lack a cohesive security strategy," Plato said. "A network product, tied together with host products and e-mail and Web has potential. They’re moving in the right direction here. As long as they don’t become too distracted and ignore their endpoint product. Sophos Endpoint still lags a bit behind the likes of McAfee and Symantec in capabilities and features."

Next: Partner Don't Anticipate Major Integration Issues

Fogelgren said that many of the company's partners who already sell network security expressed interest in offering a comprehensive network and endpoint solution from Sophos.

"Now when we look at the depth of that relationship, we become a lot more relevant to them," he said.

As the acquisition unfolds, channel partners maintained that they didn't anticipate any major integration problems, citing Sophos' relatively smooth purchase of German data security company Utimaco in 2008, but were taking a "wait and see" approach until an integrated product was released and ready for market.

"If they handle it like they did Utimaco, I see it as being a non-issue," said Sean Stenovitch, partner at M&S Technologies, based in Dallas, Texas. "But we won't know until we start getting out there and start running into whatever obstacles may come into view."

Partners said that Sophos would likely have to overcome perception problems of being a late bloomer to the UTM space, especially when going up against reputable and more established network security players.

However, Stenovitch said that the company's reputation for strong product quality could give it a leg up when targeting either their existing Sophos customers or customers looking for an alternative UTM solution.

"They're taking the approach, 'you're already using us. We know that UTM is huge, and we're offering this product.' I don't see how that's a bad approach," Stenovitch said. "Perceptually they're coming in late in the game. But picking up a product that's done well in Europe and tagging that Sophos name on will help. I don’t know that they're going after large enterprises, but that's not where Sophos has typically danced."

And while the UTM space is becoming more competitive, there is still market share to be gained or taken, Plato said, although added that it would require true innovation on Sophos' part in order to do so.

"They are going to need to invest a lot in engineering and development to be competitive. Astaro is a very small player in the US. But, there is plenty of market share to take away," he said. "If Sophos can innovate here, they could easily win market share."