While the financial and organizational linkages to Quest since it and SonicWall were spun together out of Dell in November 2016 were not at the level of a distraction, the removal of their final elements will benefit the company going forward.
SonicWall has done well since being spun out of Dell in the fall of 2016, and has exceeded financial expectations for six straight quarters. The company was, however, initially joined at the hip from a financial and operational sense with Quest, which was spun out of Dell at the same time in the purchase by Francisco Partners and Elliott Management. The two companies have been untangled over the last year, and now they have been completely separated, with SonicWall being independent of Quest both operationally and financially.
“That’s the big news here, that we have recaptured the company as of last Friday,” said Bill Conner, SonicWall’s CEO. “We are now 100 per cent separate of Dell and of Quest, and all the operating and legal things around that. This is our true Day One with no operational connections to the other companies.’’
Conner said that the continued intermingling with Quest was a consequence of the joint spinoff out of Dell.
“When Francisco and Elliott bought Dell Software, the first step was getting that whole software group — SonicWall and Quest – out of Dell,” he said. “That was the first carve-out, and that was Job One. Job Two took place in October and November of 2017, and that was separating SonicWall operationally out of Quest. Now, what we are announcing is the final carve-out, where we have completely separated the financial debt and structure between SonicWall and Quest. This was the plan all along, and it took perhaps a little longer than we had planned, but it is now complete. That book has been closed and a new book has been opened.”
So what does this mean for SonicWall’s 20,000 plus channel partners, the vast majority of whom have likely been blissfully unaware of all these interconnections behind the curtain.
“We have pulled all this off pretty transparently in the marketplace, even though a lot of people were moving at 100 mph to make it happen, Conner said. “We weren’t distracted by the process. We have put out over a dozen products, with over 120 million lines of code. Our development wasn’t slowed down. We rolled SonicWall University out. We have built momentum beyond anything the owners thought possible, and fulfilled promises on deliverables. That bodes well, that we could get this done.”
At the same time, Conner acknowledged these ongoing issues took up a lot of time – particularly his own time.
“Now I can spend 100 per cent of my time entirely focused on the business, without dealing with these operational issues, or lenders,” he said. “From a corporate view, this will allow us to be even more maniacally focused on our partners and our customers.”
Conner stressed these things had already been taking place. For instance,. SonicWall posted a 90 per cent customer renewal rate, up 14 per cent year-over-year. Their technical support team also recorded an 89 per cent year-over-year decrease in case backlogs, an 84 per cent year-over-year decrease in average case age, and a 74 per cent year-over-year decrease in call abandonment. On the partner side, deal registration was up 112 per cent year-over-year.
“Now, with all of our resources focused squarely on enablement, we will be more focused, and able to move even faster,” Conner said.