SSL VPN vendor Whale Communications recently appointed Roger Pilc as its new CEO. Pilc most recently worked as COO of Smarts, a network management company bought by EMC last year. As he comes on board at Whale, the company has a fresh $6.5 million in venture funding that he can use to carry out his plans.
But he faces an uphill battle. Major network vendors all have SSL VPN products to sell, and the stand-alone SSL market is starting to consolidate. In addition, the company's sales are sliding - Whale slipped from no. 2 to no. 4 between 2003 and 2004, Synergy Research says. On his first day on the job at Whale, we talked to Pilc about his plans to reverse market-share loss and move the company forward.
Whale used to be no. 2 and now it's no. 4 in the SSL VPN market, according to Synergy. How do you analyse how that happened and what are you going to do about it?
One opportunity I see, there's a number of verticals where we've been strong: financial services, manufacturing's been good for us, healthcare. We'll be stepping up the marketing we do in some of these verticals, lead generation, awareness-building, at the front end of the sales funnel.
The second is building the sales and distribution infrastructure. We've got a very productive team here so I feel very comfortable about continuing investment in direct sales but also indirect. There's a lot of opportunity to invest in supporting regional channels and some global partners.
And third, geographically we've had quite a bit of success in the U.S., we're starting to see tremendous growth in Europe, and I'm looking forward to putting more resources in the field working with partners and customers in some other geographies as well.
What caused Whale's rank to slip?
I view that as certainly not a product issue. It's an issue of how many sales people do you have in front of customers, how many channels do you have in front of customers, how much lead generation you're doing, and we're looking forward to investing in those things.
The no. 1-ranked competitor is Juniper, which has tons of money. How do you deal with that?
There's often larger players with well-established channels and customer bases that will win their share of the business. [Whale equipment] does very well when it gets in front of customers. There will certainly be a lot of cases where Juniper might be in front of a customer where we're not, but as long as we're doing the right things, we'll win our share of the business.
Who do you regard as your top three competitors?
From a market-share standpoint, Juniper and F5 and Aventail are the other players.
Go through them one at a time and tick off how you say Whale measures up to them.
There's certainly a difference in terms of levels of security and could be endpoint security, it could be our AirGap [hardware] platform, it could be our application firewall, it could be increased granularity with which we provide access to customers or end users and certain applications.
The second thing is we have a strong selling point in terms of flexibility and customisability. A large part of the SSL VPN market emerged in terms of being an easier and more cost-effective approach to VPNs than IPSec, but there's a very large part of the market that wants more value in terms of flexibility and customisation, and that's where Whale's been winning its business vs. the other three.
The other two things are access from different points securely and access to particular applications and all the functions within the applications. We've won a number of deals based on superior access.
And there is superior return on investment. Are you able to manage and operate an SSL VPN cost effectively? Are you providing access to the most applications for the most folks? As we go through that value proposition for prospective customers it can be very compelling.
What do you see Whale becoming long term?
In the short term we'll continue to invest in the business and do those things [I've mentioned] and form the right partnerships, and over time it may make sense to be part of a larger whole. Right now we see a lot of opportunity as an independent player.
"Part of a larger whole" - does that mean a possible acquisition?
Right now it's not really on the horizon.
It sounds like you're not talking about broadening the product line.
We've differentiated ourselves by having an application firewall integrated with what we do. There's opportunities in peer-to-peer and other areas of application security that we can apply to SSL VPNs. So I absolutely believe that there's opportunity to broaden the product offerings to adjacent areas.
I suppose at some point you have to stop using venture money and start spending your own. What's the forecast for that?
We were close to break-even last quarter and will probably be the same this quarter, and an important part of our near-term future is becoming profitable. While we thought it made sense to put this investment in to fuel some of the growth areas we've been talking about from a business execution standpoint, we don't anticipate doing another round.