In September 2015 Secunia was acquired by Flexera Software, providing the Secunia shareholders with an attractive return on their investments. The acquisition was the culmination of a transformation process that started in July 2013 when the board of directors appointed a new CEO.
This series of posts documents Secunia’s journey from a company in trouble to a profitable company on a promising growth trajectory.
Secunia is a provider of cloud-deployed and on-premises vulnerability assessment and security patch management software. Secunia’s solutions allow organizations to assess, prioritize and mitigate software vulnerabilities quickly and cost-effectively. The Secunia products belong in the Software Vulnerability Management category. Secunia was controlled by the two private equity funds DKA Capital and The Damgaard Company.
Entering 2013 the company had accumulated a somewhat poor reputation for its aggressive direct telemarketing based sales approach in the Nordics and their international sales efforts had not performed as expected. The company was suffering from internal organizational conflicts and heavy losses. The failed international expansion projects had left the company bleeding with stagnating revenue and an increasing cost base.
Something must be done
Between May and June 2013 the board of directors sorted out the most critical organizational conflicts and assigned Russell Reynolds Associates to search the market for a new CEO. In July 2013 Peter Colsted was appointed CEO of Secunia.
The assignment given to Colsted was clear: Ensure a positive turn-around and prepare the company for sale as fast as possible.
Looking at the P&L for the years 2010-2014 you can imagine that entering the fray in July 2013 was not pretty. Cash flow is inadequate to fund operations and making investments requires asking the shareholders for additional cash. However, the shareholders know that a turnaround will require further investments and they are prepared to chip in.
Situation analysis and mapping the options
- Secunia must shift focus from the low-end market to the upper mid and enterprise market. The low-end market segments are no longer attractive mainly due to competing low cost products.
- Outside North America Secunia must move from a mainly direct go-to-market approach to an indirect two-tier approach. Secunia must continue the direct go-to-market approach in North America.
- Secunia should consider penetrating additional markets and Eastern Europe seems an attractive opportunity.
Migrating from a direct to an indirect go-to-market approach
The decision to change the go-to-market strategy is supported by the fact that there is an existing channel of distributors and resellers specializing in security software. Based on existing relationships, Colsted and his team now reach out to these distributors and in September 2013 a meeting with 15 potential distributors takes place at the Secunia Headquarters in Copenhagen, Denmark. Colsted explains the new strategy and admits that Secunia has no great track record with the indirect channel approach, but he and some of the new members of his management team have substantial indirect channel experience from previous jobs, they know what to do and they are committed to making it work. However, the necessary channel programs and frameworks are far from being in place and the distributors have to cooperate actively in putting it all together in parallel with recruiting resellers and ramping up sales.
The distributors are all excited, support the strategy and most of them sign distributor agreements to get started. Secunia had deliberately only invited specialized Value Added Distributors and left the broad-liners out of the picture realizing that they would be hesitant to this “joint venture” approach of building the markets. To build this market requires a much more active hands-on engagement by the distributor than a typical broad-liner is prepared to do.
Partner Program kick-off
In September and October 2013 Secunia completes the development of the partner program and kick-starts the partner portal and the partner recruitment.
Secunia Partner LogoTraining and certification programs are initially based on classroom training, but during the spring of 2014 Secunia defines the certification criteria for sales and support staff and develops a corresponding curriculum to be delivered as e-learning through the web. The expensive “brick and mortar” type training can be reduced and product presentations and skills development beyond the e-learning curriculum are now delivered as webinars and web-based Q&A sessions.
As Secunia pass their direct sales activities to the distributors and resellers they realize that the pipeline of leads is very thin. Colsted and his team know that expecting resellers to invest in lead generation at this early stage of market penetration is unrealistic and they therefore set off to design lead generation campaigns that they can pass on to the distributors who then can implement these with their resellers.