Palo Alto Networks Partners See Big Sales Gains For 2014

Palo Alto Networks partners say they expect to see sales growth of 50 percent to 100 percent in 2014 even as larger competitors such as Cisco Systems and McAfee move aggressively to capture a slice of the booming next-generation firewall market.

The charged-up partners gathered at the Hard Rock Hotel in San Diego for the fourth annual Palo Alto Networks Americas Partner Conference say that kind of growth is what they have come to expect over the past several years. Of the 150 top-tier Palo Alto Americas partners attending the conference, 141 have doubled their sales in the past year.

Partners say they expect that to continue as Palo Alto expands its reach from the perimeter into the data center with the advent of software-defined networking. And they say the Santa Clara, Calif., company is stepping up its game with new sales tools aimed at driving growth as it revs up its 100-percent-channel-focused model to reach into the top 2,000 corporate accounts in the country.

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Nexum, a national $75 million solution provider with 11 offices throughout the country, doubled its Palo Alto business to $6 million this year and expects to double it again in 2014 to $12 million, said J.D. Butt, vice president of solutions at Nexum, Chicago.

Nexum initially was skeptical about the Palo Alto unified threat management product and was "essentially forced" to add the product to its line card two and a half years ago because of customer interest, said Butt.

"We have been very, very happy with Palo Alto," he said. "It has been easy to sell. We have seen even in the very large enterprises where traditionally they are very slow to take on technology, they are seeing the benefits of Palo Alto. Customers are seeing that they can reduce some of the spend on some of the other technologies even though Palo Alto is a premium [product], especially when you compare it to a Cisco. We've had great success with it."

Palo Alto's firewall is the only one that has been accepted by both security and networking specialists in top enterprises, Butt said. That's no small matter given the technology battle lines in corporate America. "A lot of pure networking guys are scared of pure firewall products," he said, noting the preference of some networking specialists to side with Cisco. "Both sides gravitate to Palo Alto," he said.

NEXT: It's Getting Crowded In The Firewall Market

The high praise and ebullient mood of Palo Alto partners comes despite $49 billion networking leader Cisco's $2.7 billion deal in July to acquire Palo Alto rival Sourcefire. And Cisco isn't the only large player trying to break into the market dominated by Palo Alto. Just this week, McAfee, a unit of $53 billion chip giant Intel, signaled its intent at its own partner conference to focus more squarely on the kind of next-generation firewall capabilities that Palo Alto has popularized in the security market.

McAfee spent $389 million in May to acquire Stonesoft, a Helsinki, Finland, maker of multilayer inspection technology. McAfee is currently integrating its Stonesoft technology to provide next-generation firewall capabilities.

Accuvant, one of the leading solution providers in the country at No. 62 on the on CRN's Solution Provider 500 with $430 million in annual sales, has been partnering with the eight-year-old Palo Alto since its early days and has doubled its Palo Alto business year after year, reaching $50 million in 2013, said Andy Welsh, director of partner alliances at Accuvant. He expects that sales growth to continue in 2014 and hit at least $70 million. "It could be bigger," he said. "It's pretty amazing. It's just a good technology. It does what it says it is going to do."

Unlike many technology vendors in disruptive emerging markets, the hype around the next-generation firewall product from Palo Alto lived up to the advance billing, said Welsh. "They are a marketing machine creating the category of next-generation firewall," he said. "Thankfully, they actually backed it up with a product that did what the marketing said it would do."

Adaptive Communications, Portsmouth, N.H., grew its Palo Alto business by 50 percent in 2013 to $4.5 million and expects to grow another 50 percent in 2014 to $6.5 million to $7 million, said Steve Thorpe, president of Adaptive.

"We've been a Palo Alto partner for five years and it's been steady growth for each of those years," said Thorpe. "I'm real optimistic about fiscal 2014. The technology is superior. It is widely accepted. The brand is being recognized not only in the next-gen firewall space but in the next-gen security appliance space. The stuff they are doing in malware prevention is going to be big for all of us this year."

NCI, a Toronto, Canada, security integrator, expects its Palo Alto business to grow 50 percent in 2014 to $3 million, said NCI CEO and President Danny Timmins. "They've got a lot of new advancements in their product portfolio," he said. "They were so strong at the beginning, they need to continue to add feature sets to what they have today to keep up with the competition, and they are doing that. It is the strongest brand we have and probably the easiest product to sell for us."

Blue Door Networks, a Herndon, Va., solution provider, brought on the Palo Alto next-generation firewall appliance in February and is looking forward to quickly building a multimillion-dollar business around the vendor, said Blue Door Networks President Mike Seaton. "We look at Palo Alto as an incredible door-opener for us," he said, noting his company has put a top-flight team of sales and engineering talent on the product. "We are a best-of-breed company and we believe Palo Alto is clearly a best-of-breed from a security appliance and next-generation firewall [standpoint].

"By and large, when we go out and see a customer we put it in place and it kind of sells itself," said Seaton. "It finds all of the holes in the existing firewalls. Certainly, there are a lot of other competitors in this area but our CTO absolutely spot on felt it was best-of-breed. It fits right smack into our portfolio."