Sophos’ Secureworks acquisition comes with strategic wrinkles
The recent announcement by long-established security vendor Sophos that it was acquiring Secureworks from Dell for $859 million in an all-cash transaction was described as helping to “strengthen the resilience and security posture of global organisations of any size with a combination of security controls, AI, world-class threat intelligence, and two teams with decades of cyber security expertise”.
It was revealed that Sophos planned to “integrate solutions from both companies into a broader and stronger security portfolio benefiting small, mid- and enterprise customers”.
Joe Levy, CEO of Sophos said the acquisition “represents a significant step forward in our commitment to building a safer digital future for all”. Wendy Thomas, CEO at Secureworks claimed it would “strengthen our go-to-market offering with Sophos’ global scale, expertise and reputation”.
The acquisition comes 13 years after Secureworks was bought by Dell and eight years after it became a publicly listed company, although still majority owned by Dell. So, all told, the acquisition is a big deal in the security sector.
Of more interest to us is that both companies enjoy a reputation for being ‘channel-friendly’. Sophos has always been happy to describe itself as having a 100% channel focus and this story on the CRN website, which quotes Sam Heard, president of Sophos partner Data Integrity Services, suggests it is justified in doing so. “Sophos has been extremely good at listening to the channel, listening to the partners, being more nimble in their response to the channel’s needs,” he told the publication.
The hope is that combining two companies with a good record in the channel will create an even better partner for its, um, partners. Of course, that’s not always the way mergers work. As experience has taught us all too often, one and one doesn’t always make two when it comes to mergers. There are many reasons why this could be the case. Product or customer overlap can be an issue, but it can also be as a consequence of differences in the channel strategies of the companies.
The good news is that Sophos and Secureworks appear to be starting from more or less the same place when it comes to the channel. There’s no potential for the conflict or uncertainty by trying to combine one vendor that works with the channel and another that doesn’t. We’ve all seen how that ends up and it can get quite ugly for all involved.
When the business philosophies are aligned, things go much more smoothly, although it’s not always guaranteed. Even if two companies have channel friendly strategies, they might not fit together seamlessly. A partner that is considered influential by one vendor, for example, might not enjoy such a privileged position once the channels are merged which could cause resentment.
The ideal scenario is where both vendors and their respective channel partners have much to gain from combining their product ranges and their customer bases, where the opportunities for each to cross-sell are clear and well delineated and the possibility of conflict in doing so are limited.
Perhaps the biggest danger of a merger between such two channel-friendly companies is disappointment when expectations are justifiably high. But that’s still a far better place to start from than many others.
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