Websense Taps Channel to Sell New Web Security Appliance

By D.H. Kass

April 13, 2009

Websense Inc. (NASDAQ: WBSN) a $350 million provider of Web security solutions, has tapped its network of channel partners to sell its first ever hardware device, a Web 2.0 gateway appliance that employs real-time content filtering and threat protection.

Announcement of the product and its accompanying sales strategy coincided with release of the vendor’s first-quarter earnings, which topped Wall Street analysts’ expectations and buoyed its stock. Even though researcher IDC estimates the Web security market will exceed $2 billion by 2011, softened IT spending has worried investors and market watchers.

Company officials said that the year-long development of the multi-function device, named the Websense V10000, was prompted by the emergence and popularity of dynamic content social networking sites which many of its customers believe are necessary to their business but may pose security risks.

Specifically, the Websense appliance is aimed at providing content security for the increasing number of corporate employees accessing Web 2.0 sites such as Facebook, Twitter, MySpace and iGoogle, according to David Meizlik, Websense director of product marketing for Web and data security.

“Ninety of the top 100 Web sites have user generated content,” said Meizlik. “People post every day changing the content on those pages. Our customers tell us that some social networking sites are mission critical to their business but they have concerns about how to do that in a safe environment.”

Meizlik said that the product is unique in its ability to scan specific content on Web sites rather than separating out questionable sites in their entirety. He offered that with the new device Websense is expanding its traditional focus on Web filtering and categorizing to hone in on individual content feeds.

Partners in line for profits up to 35 percent

To make its point, Websense said that in January it discovered that my.barackobama.com, a popular social networking web site, contained links to malicious content within its user blogs. Employees using the Websense software were prevented from accessing the infected pages and, correspondingly, their companies were protected from those threats as well.

Technology underlying the appliance will make it attractive to customers and channel partners, Meizlik said. Central to the device is advanced analytics including antivirus, Web virus and reputation as well as real-time content inspection and classification technologies. The device also offers Web proxy and cache capabilities and the ability to inspect SSL-encrypted Web traffic. It features a Web-based management platform.

Meizlik said that Websense designed the appliance with an eye toward helping business clients to go about their daily activities with a minimum of Web-related disruption.

“We have leveraged virtualization technology to run multiple pieces of software on one appliance,” Meizlik said. “The concept is to run multiple modules concurrently like Swiss knife blades.”

Websense has set the price for the product at $16,000, not including subscription costs for the company’s software. It expects partners’ profit margins from sales of the solution to range from 25 percent to 35 percent.

The vendor plans to sell the appliance, which it will make available by the end of this month, through its roster of 8,000 resellers worldwide, 40 percent of which operate in North America. Channel partners will purchase the appliance from distributor Ingram Micro Inc, which will add it to its existing line card of Websense products.

Next page: "It makes our sales cycle shorter."

One Websense channel partner predicted that the functionality of the appliance and the low price point would win it immediate popularity with customers.

“One of the challenges we’ve had in the past is that our customers were looking for an appliance solution,” said Ken Hamilton, president of Total Tech LLC, a San Diego-based provider of network security solutions. “This is a simple and easy application, with everything on the box and it’s more than powerful enough,” Hamilton said. “It makes our sales cycle shorter and we’re still going to make some money on the hardware piece.”

Enterprise and midmarket customers are the primary targets for the appliance. The company has charted a sales strategy to engage its upper level channel partners that sell into those segments.

Erin Malone, Websense director, sales and channel programs, said the vendor expects up to 50 percent of its upper-tier partners will sell the appliance. The vendor’s ChannelConnect Global Partner Program features three levels of partners based on training and certification commitments.

“Our channel partners have been asking for an appliance for some time,” Malone said. “It allows partners to position themselves uniquely to customers.”

Malone said that Websense has devoted a great deal of resources to assisting partners to prepare for and sell the appliance, including webinars, training sessions, launch kits and evaluation units. In addition, Websense is providing partners with proposal-based market development funds and has upgraded its information-based partner portal to include email and telemarketing campaigns.

The company recently initiated enhancements to its channel partner program, granting partners online access to a variety of resources, including product information, marketing kits, product renewal management, training and certification. In addition, the vendor began a deal registration program that rewards partners with financial incentives for landing new sales in specific markets.

Malone said that with the new device the vendor had “already seen a spike in deal registrations.”