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The Channel & the Future

Q: Tell me more about how you have developed your channel program and how it evolved.

A: We have three tiers of resellers. The top tier has the same training that our own system engineers have, and have to be able to install all the products and understand their interaction with our various partner products as well. The next tier has specific service contracts typically for larger corporate customers and they only need to know a couple of our products. The last tier are not very solutions oriented, just sell in quantity one to five units, typically only deal with our desktop products and specialize with one or two products and not sell enterprise-level products.

Our channel has evolved over the past several years. We now have 300 resellers in 91 countries and have added 30,000 new customers in the less than three years since we began our company and taken it out of NAI. In fact, our sales now are better than any of the years when we were part of NAI.

When I was in charge of sales at Symantec, we found that you couldn't rely on the channels to create demand for new products like PGP Universal. The channel makes money on support, service, hardware management, off-site monitoring and so forth. But we had to go out and find the market segment, recruit the resellers, and do things like build hands-on labs to train our VARs and find other partnerships that would work for us.

For example, we just put on a four-day training session in Singapore for our local partners. We get everyone involved in installing the software and understanding how the products work in a very hands-on session.

But we also established a series of technology partnerships with vendors that have major email solutions such as IronPort, SendMail and MailFrontier. These vendors all offer things like anti-spam and content filtering solutions. First they wanted to cross-train their sales teams to resell our products. As they gained experience with PGP, they became OEMs and wanted to bundle their software with ours on a single box. Now they are an active channel for us and we have consolidated reporting. They sell a single solution and everyone gets a better margin and the customer gets one vendor to buy all of it from and fewer vendors to deal with for front line support.

Q: So any final thoughts?

A: We have become successful because of several things. First, encryption is just becoming a standard feature for more and more people. It operates down at the transport layer and is just like a network dial tone, what I call "encryption tone" these days. Second, we got a great start by being established and not having to recreate everything from scratch when we came out of NAI.

Third, it helps that we are an open standards vendor and we publish our source code. We wish more companies would publish their code as well. Finally, we have a very good product road map and we spend a lot of time listening to our customers, asking them what they want in the next two versions of the products and so forth.

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