Sunil Sharma, MD-Sale, Sophos explains Sophos solutions and partner programs and why they remain a favourite with the partners.
What are the solutions and services currently in the Sophos portfolio?
Sophos as of today is serving 400,000 customers in 150 countries, and this all is being supported and powered by our research lab. Sophos Research Lab is a combination of global threat intelligence and data science team which is providing feedback on a 24/7 basis.
In India, we have provided both endpoint security and network security. We have also been the leading security innovation company. We were the first one among the prime players to introduce synchronized security concept, which means that endpoint security products and network security products can talk to each other. As a result, the defense mechanism can be built by these two groups of solutions, what we offer, when they are talking to each other and that is where synchronized security concept comes in. That is what we are best in and that is what we are providing to our partners and customers.
How is this synchronization happening between network and endpoint security in the current WFH environment with increasing cybersecurity attacks?
It is a concept which has been developed by Sophos wherein each product is talking to another product and while they talk to each other, there is a heartbeat which is getting synchronized. It is a concept where there is a heartbeat amongst the products, which are being used by any organization from Sophos side. We are able to provide the synchronized security concept across organizations when they are using our network security products and endpoint security products. There is a heartbeat established between these set of products.
Let us take an example of endpoint device and user name A. If that is compromised, what happens is that the device actually automatically gets into a quarantined zone and it is being declared as an unhealthy machine. And after that, the same machine is being treated with the help of solutions, which are being offered to the customer. Until that machine becomes healthy after it is being treated, and the malwares are being removed, it will not come back to the system. Once it becomes healthy, the machine comes back to the system and the dashboard on the CIO table is able to show green, while it was only reflecting red zone once machine was quarantined. That is how an IT manager or a CIO even when he is working from home or from anywhere able to do it because our console is through the cloud and he is able to manage that on the cloud.
We have actually helped so many customers during the pandemic. When COVID19 started, it was absolutely unprecedented. No one could have imagined that they would not be able to go to office for so many days on a continuous basis. And that is where, Sophos had the real skill because, we have been working from home in our company for so many years. That means our infrastructure, support, architecture has been designed in such a way that we are able to support not only just our own employees, but also our partners and our customers while working remotely from home. That is what exactly came into effect prominently once this lockdown started in India. Before that our employees, were not supposed to be coming to office. Instructions were given to that effect after 16th of March. So while a lot of people started quite late, we stopped as we were concerned about our own people at the same time.
Secondly, we also started talking to our partners and our customer. Our customer support centers, based out of Bangalore and Ahmedabad, were able to work from home and give similar kind of support like we were providing earlier. We anyway have the Follow the Sun Model, which means 24/7 with 5/6 support centers across the globe and this has been a tremendous experience. It was a new normal but the way it was done and the way we actually executed on the ground, we found our partners today can vouch for us and that is where we have taken a lead.
How were the partners and customers sensitized to work in a virtual mode in this WFH environment?
Our partners were really not equipped but during this time of lockdown, we utilized the time in training their resources on technology. We train them as to how they need to make phone calls and give a similar kind of pitch, so-called compelling pitch, on selling a product like they do physically. A lot of people are not comfortable when not having a physical connection and then speaking to the customer. So, we trained, we provided those soft skills kind of training programs to our partners.
We actually had conducted happiness engineering program for our partners and their families too. We invited them on one platform where we conducted this 5 days program continuously, every day, so that our partners can understand when you are mentally healthy, then only you can contribute. It was a sudden lockdown, which we realized have made our partners feeling very uncomfortable, and hence we decided to do that for our partners this kind of program.
I was thickly involved into execution of all these tools and because it is a question of survival for anyone. When any organisation fails, it is not only that there are so many employees under that company. There are so many partners connected to that and there are so many partner reps and account reps, so primarily we decided to have that training program, and teach them what kind of compelling pitch they need to make.
At the same time, apart from the certification programs which we conducted on this virtual platform, we organized webinars, where the partners could invite their customers and listen directly from the OEM. We also had executive roundtables where CIOs could participate. We had limited gatherings of 10 – 12 CIOs coming on that platform, sharing their experience about a particular subject. For example, we had executive round table for pharmaceutical as a vertical, for education as a vertical, for some of the enterprise, for some of the customers from South.
The mindset of a partner was that deals cannot be closed virtually, you literally need to have a physical meeting. I think it is the pandemic effect that the mindset actually started moving in the direction when the lockdown was over. In the month of April and May, people were still expecting that the new norms which are getting set, maybe they will get revised. Unfortunately, they did not get revised. Rather everyone had to accept the new norm as a new normal, and that is where the change in the mindset started happening.
During April-May, the amount of efforts which we have done with our partners for the set of customers started getting converted into results in the month of June. In terms of orders, our partners started receiving orders from customers and partners in turn putting the order through distributed them to us. We could see that change. There was a time when we could not ship any hardware because around March end till May, supply and logistics was completely closed.
The major impact happened was that when the lockdown happened it was end of March and the way our economy works in India it is the end of March, when maximum amount of shipment happens, payments getting released. Everything or anything which have started in the month of January, the the closure happens in the month of March, especially the second half of March. Unfortunately it was 16th or 17th of March beyond that when the lockdown was announced and that is where our partners were bit of concerned about the cashflow, and the working capital.
It all again started happening in the month of June when we started seeing the movement, because customers also accepted that this is not something which is going to stop in the next 10-15 days but this is going to go for a longer period. Hence they started moving the files, started working on the projects, which were kind of halted or delayed. Finally we could see movement started happening in and around June in business and they could close deals on a Zoom call or on a Teams call. All the seniors just come in and the vendor comes in and the partner comes in and the deal was closed.
One thing which started happening was that a lot of customers started saying that now they will not go for three years kind of subscription or contracts. They will only go for one year contract because budgets have started getting revised. We definitely started seeing lots of orders flowing to our organization in the month of June and in July and August. The partners were pretty down in May because of the lockdown, and nothing was happening. They were not able to move out, their businesses stopped, so much of payment in the market was due and they were yet to get that payment from customer.
The ball started rolling in June-July which actually set the benchmark and totally clarified that this is a new normal and all of us will have to work in this direction and to make our business survival and to support each other during this pandemic. It is absolutely good support coming not only just from us as a vendor to our partners, but at the same time, from our customers also. In terms of support, they also started getting support what they needed virtually. In some locations, when the unlock started happening, wherever the engineers were supposed to be sent by the partners, they started doing it. They started deploying it and today I can vouch for my partners that they are doing a pretty good job in terms of deployment, installation and supporting their customers on the premise also while taking all precautions to ensure that their employees are safe.
What were the incentives or relief packages offered by Sophos to partners to tide over the cash flow challenges?
The cashflow was a bit of challenge. Distributors were struggling to get the payment out from partners. But this channel ecosystem is such a robust ecosystem, which I have found in the last six months. They could actually evolve, support each other, give those extensions in terms of payment, just to support each other. They could primarily go through this bad phase just to come out of it, with customers supporting distributors, distributors supporting their partners and partners talking to customers and giving them and assuring them not to worry, that they will not stop any of the services. They were pretty sure that the customers are going to be opening up soon in the sense that they will start releasing the payments. That trust amongst the old ecosystem actually helped, the moving and sailing and progressing.
How did you witness enterprise customers moving to a managed services mode and how did your partners support them?
We have this MSP program and we started seeing traction on this managed service bit. But, MSP somehow has not been a very successful platform because everyone wanted to monetize the three years revenue then and there. Both partners and customers though now started looking for options because of obviously the COVID situation they found that budget is a major concern. So they said, is it possible that you give me a subscription for three months or give me on a monthly basis and as utilization happens accordingly, I can also increase the number of users next month.
We had this program, but we started seeing lot of traction after the lockdown and that same program, which has actually now started taking off with our distributor. We are doing a phenomenal job in this direction and hope to have not less than 100 partners on MSP by end of this financial year. Secondly, the SMB organization, who were working with one server, five computers and used to go to office and operate found themselves with no work when the lockdown happened. Everyone decided that now I would want infrastructure to be on cloud whether private or public. That shift also started happening and since Sophos has been on cloud with any of our offerings, we first come with the product first on cloud and then on-premises. We had the edge, we had the advantage and that’s where our partners today are thriving with us as.
How did all these changes in the overall situation impact Sophos’ GTM strategy?
Our go-to-market strategy changed from the perspective of shifting the engagements on the virtual platform. It was about getting our partners and customers on the virtual platform, but our strategy to sell did not change. We were anyway providing both network security and endpoint security solutions on cloud, whether it was Azure as a platform, or AWS. Customers came to know about this now since they were not using public/private cloud too much. Hence they never explored about it but now we started getting inquiries on that side too.
The incentive for our partners is to sell more in terms. Our partners are able to make more money even today just because of the discounts. Platinum will get a little more because they are committed in terms of more numbers to us. Platinum, gold, silver sub-distributor and we also have a margin detention which means that there is a deal which the partner has done even on which he will get extra discount for his deal. At the same time, there is channel incumbency like you are my partner last year, you have sold to ABC and today you come back this year and say my customer is due for renewal, you get a special discount because you have actually sold. Keeping the incumbency intact, giving more discounts not only just for new opportunity but same customer cross selling and upselling and providing technical enablement to lot of our partners in terms of certification, technical certifications are the advantages we provide.
I think that is where we have an edge over others and especially on the MSP program. For example, you are selling a Rs 100 worth of product on MSP, I will recognize your revenue, I will give you off that Rs 100, and tell you take that as Rs 150 for your revenue achievement perspective. That is where we are different, agile, more beneficial to our partners and give them more profitability.
How has Sophos financially grown in the last 2 quarters and how did it balance between retaining existing clients and acquiring new clients?
I really cannot give you the numbers, but I can tell you internally, we are doing phenomenally well. We are growing compared last year as a organization. Secondly, although in April- May, it was just India where we had this lockdown, the other countries in the world, the shipment was pretty good.
We as a company, whether you talk about India or l global, financially or in terms of our retaining our customers perspective, have done a phenomenal job because when we try and retain our customers, we give them value. So retaining the existing customer, cross selling, upselling with them, even they are phenomenally enjoying with Sophos.
In terms of new customers, with the help of our so many webinars, which we conducted with the existing set of partners, they had competition customers. There are two vendors who almost exited in the endpoint space, so we have a huge space which is being vacated. We are getting those converted and for us, and they are new customers actually. We are leveraging our strength of getting solutions in both the areas of network security and endpoint security. We are able to give them that management of single console to any CIO. Our partners are actually enjoying a very healthy bottom line while doing business with us. Not only they are able to sell in existing set of customers, we are doing pretty well with almost equal amount of contribution from all these three areas.
What will be Sophos’ unique differentiators over its other competitors?
People, partner and products, in all three categories. I would call people as first because that is what makes an organization, the success stories are all about people. We differentiate ourselves with our people who have been with us for so many years working and doing a phenomenal job. That is one aspect.
Secondly, our partners are absolutely committed at different places, and I have seen this at different locations where we have enjoyed sales conference with partners. We also had, times where we had been together at the customer base during midnight. We had times when a customer not giving payment because of various reasons and we have been standing together, shoulder to shoulder with partner and their reps. So that is about our partner commitment and the breadth of what we bring it on the table as Sophos because our breadth is absolutely huge, which gives us a lot of coverage area.
Last but not the least our products are phenomenal. It is a unique proposition about seeing security and we are leaders in both in network security products and in endpoint security products. On top of it, we are being supported by our own threat intelligence research lab with so many data scientists who are there on the panel and they work 24/7. This is what I would call that as an edge. Today whether you talk about ransomware kind of product categories, or EDR, which my competition has been talking about or MTR, which is managed threat response, we are providing solutions across all three.
What were the marketing and marcom activities that Sophos prioritized in the current scenario?
Events which were there are absolutely not happening anymore. Unfortunately during the pandemic, we are not able to get that hug with our partners. Since those physical events are not happening, there is a shift towards the virtual events. We are participating on third party platforms on virtual events. We are doing our own virtual events. The basic philosophy remains the return on time investment and return on our money investment.
Our own team conducts so many events virtually with the partners while they call in their customers. We are having some APJ virtual events with the customers. We are having partner events directly where we are hosting partners. Every week, I have all those 6-7 events happening, which is just phenomenal and the amount of noise and awareness, which we are able to spread. I am truly proud of my team for doing this phenomenal job. Marketing in our company is a bliss for us and we enjoy marketing our products effectively with our team, with our platform and also on the third party platforms.
How effective are these virtual outreach programs and how will they be prevalent in the new normal?
As an MNC we are not supposed to do physical event now till WHO announced no more cases are coming in. Our offices in APJ have not yet been opened in any country or city. We are yet not planning to open up a for example, in Australia Sydney, where the number of cases are reduced to 26-27. I am very positive and hopefully by December/January/February, we will have vaccine. After that we will be able to plan the events will happen physically.
Secondly, this new norm is supposed to be saying for at least- 12 months, this is not going to go very soon. However when we participate on a third party platform and we invite CIOs we do not know, actually who is listening and who is not listening and whether they are enjoying or not. That is the reason when we conduct our internal CIO executive round table, we get seven or eight people and we request them to switch on the camera obviously with due respect to their privacy.
Things have changed and it is a new norm. We will have to accept it, but the number of people who were participating during the lockdown or till the month of June, July are now being reduced as we conduct webinars, because a lot of people have started going to office also. We are still getting a lot of traction from them when we come out with something special subject and content for them.
How has the nature of engagement with CIOs/CISOs changed in the current scenario?
People are more comfortable doing a 10 minutes call on a Zoom rather than they travelling from one location to another location where they had to spend almost 45 minutes in traffic jam. Today they are a very effective, more productive and able to deal with many of the vendors together. Whenever we invite them for a good webinar, when the invitation goes from our side and we have very selective audience, the response has been very positive. I think engagements have rather improved.
How has been the traction among government as a vertical during this time both from an adoption and payment perspective?
Government has been sensitive to the people who are supplying to them. Though it could be not said verbally as a written document, but internally the directions has been that payment should not be stopped for people, for vendors supplying to them. Secondly a lot of projects are getting implemented on the government side, but there is a bit of delay. The Government is expediting those projects, which are on priority for them. Whether it is smart city kind of projects or something, which they want to launch online or virtual platform, there I have seen, where the approval comes within few days. Most of the other projects which we were working on have been delayed. Smaller projects have been approved faster. The bigger the project, there is a bit of delay.
How was the challenge for SMBs and what sort of support Sophos provided for them?
During the lock down period, we straight away provided them extension when their subscription was expiring, we had actually provided them three months, two months, depending upon what they wanted. We provided them extension without having them pay to our partner and so on. Secondly, we have conducted so many webinars for our SMB customers where they can participate and understand the challenges.
In cybersecurity, the major problem is that the challenges which an enterprise is supposed to be facing, the similar kind of challenge is supposed to be faced by an SMB too, in spite of their not having those many resources and those many infra or money. By virtue of our same security kind of a concept and single console and management being so easy and an MSP kind of a concept to our partners, we have been able to provide, such SMBs unique offerings where they could just pay for a month. Then if today they have 10 users, next cycle around 15 users, they will pay as and when they grow accordingly. This gives us an edge in comparison to any of our competition vendors.