Amid the shift from appliance sales to cloud and subscription services, Barracuda Networks won't get left behind, CEO BJ Jenkins asserts. In fact, Barracuda added 690 MSPs and 1,000 cloud security customers to its ecosystem over the past fiscal year, Jenkins revealed during an earnings call yesterday.
For its Q4 fiscal 2017, total revenue rose 7 percent to $89.3 million, compared with $83.7 million in Q4 fiscal 2016. Gap net income for the quarter was $3.2 million, flat vs. Q4 fiscal 2016. Overall, Barracuda's results largely met or exceeded Wall Street's expectations.
However, the company's stock fell 16 percent amid potential concerns about Barracuda's renewal rates. During the call, Jenkins addressed the concerns multiple times -- describing a world where five- and three-year contracts are shifting to shorter renewals based on the cloud's influence. The one-year deals are performing quite well for Barracuda, generating 97 percent renewal rates in fiscal 2017 vs. 96 percent in fiscal 2016, he said.
Shifting to Cloud, MSP Offerings
Although traditional appliance sales are falling, Barracuda has reinvented its sales pipeline to include MSPs and cloud consumption. In recent months the company introduced:
- A "Cloud Ready" Program, which allows customers with certain Barracuda Web Application Firewall or Barracuda NextGen Firewall hardware products to receive a cloud license to deploy the same solution in Amazon Web Services and Microsoft Azure at no additional cost.
- The Barracuda Vulnerability Remediation Service, a cloud-based service that automates security policy enforcement with on-demand or scheduled scanning and automatic remediation of web application vulnerabilities.
- An appliance refresh across the Barracuda Backup product line, which gives customers increased storage capacity up to 100% in some cases.
Cloud, MSP Partner Momentum
Barracuda also is ramping up its channel partner programs. That includes training VARs to support Barracuda firewalls in AWS and Azure; and recruiting partners to support the Intronis MSP Solutions portfolio, which includes backup and business continuity services.
"We believe in order to be successful in our market it’s important to have a strong brand and presence within key routes to market, which includes our traditional channel partners, public cloud providers, and MSP partners," Jenkins said.
During fiscal 2017, Barracuda added 690 new partners to its Intronis platform -- which now includes e-mail security, network security, and data protection services, he said. "Our expanded offerings are attracting new MSP partners, which we believe will be a catalyst for growth in this channel," Jenkins added.
Amid the shift to cloud and managed services, Barracuda must also fend off intense competition. Among the names to know...
SonicWall, which spun off from Dell last year, appears to have momentum with its overhauled partner-centric sales strategy. Also, Datto is expanding from business continuity to networking and unified threat protection (UTP).
Still, Barracuda continues to grow its top-line revenues. And the company's partner base remains in expansion mode.