CSPs, Networking

SecureWorks Shows Managed Security Services Momentum, But…

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SecureWorks (SCWX), the managed security services subsidiary of Dell Technologies, showed considerable recurring revenue momentum in its latest quarter. But shareholders are pushing for even stronger results.

Indeed, SecureWorks revenue rose 21. 5 percent to $107.1 million in Q3 2017. Also, the company's net loss was $7.7 million for the quarter, far smaller than the $18.5 million net loss in Q3 last year. The results, which surfaced today, beat Wall Street's expectations. Even so, SecureWorks shares fell a bit on the news because Wall Street wants an even faster growth story.

SecureWorks provides an important barometer in the managed and cloud security services market. Thousands of MSPs and VARs are evaluating security strategies for 2017. Some pundits, including The 2112 Group, believe solution providers that jump into a market where they have limited expertise (i.e., security) can do more harm than good.

Even so, plenty of channel partners still plan to launch their own managed security services. Other channel partners will leverage white label security services or outsource IT security entirely to a third-party SOC (security operations center).

With those realities in mind, SecureWorks offers multiple partner program options. SecureWorks, which launched an IPO earlier this year, remains a majority-owned subsidiary of Dell's ultimate parent company, Denali Holding Inc.

Despite ongoing growth, SecureWorks shares ($12.01) are trading toward the lower end of their 52-week range ($11.04 to $16.23).

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.