Forcepoint recently announced that it would be culling its partner base in order to better focus its efforts on the Enterprise space. “We’re not focusing our future on the small business,” says Forcepoint CEO Matt Moynahan. “We want to double our investment in half the partner community and really drive strategic partnerships.”
If you’re reading this and among the 10 to 15 thousand SMB-focused channel partners that were once part of Websense’s channel strategy, you may already realize that since its private-equity/defense contractor co-acquisition and rebranding into Forcepoint, the company’s priorities have gradually shifted, and now that transition is reaching high gear.
Ex-Goldman Sachs Analyst, Harvard Business School MBA graduate and current CEO of Forcepoint Moynahan already states that Forcepoint would like to have a majority of its business flowing through less than 1000 channel partners, and that will come at the cost of severing ties with so many of the partners who helped Websense become the company it was before its acquisition and rebranding.
Forcepoint’s focus in this is to better support large government agencies and mid-market and enterprise commercial customers, providing more resources to fewer partners who are explicitly committed to selling multiple Forcepoint products and generate an impression of leadership in the channel, all done at Forcepoint’s bidding of course.
This radical shift will affect far more partners than may be initially conceived, as efforts to recruit any business with less than 500 users will be de-emphasized by Forcepoint. “We’re paying a lot of money to partners who were supporting an SMB company a decade ago,” Moynahan said. “We need to reset that relationship.” Moynahan states this while also “reassuring” partners with nebulous comments like “This is an evolution, not a revolution. If partners are committed, we’ll be committed to them.”
Forcepoint partners not serving target customers of 500+ or 2000+ users each may as well read this as “You don’t make us enough money. Give us more or see ya later!”
A little history here: Vista Equity Partners and Raytheon teamed up to acquire Websense for $1.9 Billion in 2015. Vista Equity, the private equity firm that most famously flipped Marketo for nearly $3 billion in profit, presumably brings the management chops to this deal, while Raytheon, the $50 billion defense contractor most famous for missile defense systems, most likely brings general “security” credentials to this deal and greater access to public agencies and large government organizations.
Ultimately, the tactic that works best for these kinds of buyouts is to either flip the business or maximize profits, which are then returned to partners or used to buyout and flip more companies. The best way to do this with individual firms is to make more money while also passing on costs to employees, customers and partners, and have those same constituencies feel blessed simply to be in league with the likes of Forcepoint.
Disregarding the fact that there are still plenty of SMBs and partners who serve them that work with government and fundamentally support the activities of larger firms, one would expect this forced exodus to deliver great results for Forcepoint’s books in the short term while reducing the reliability and growth potential of their business in the long run. As for the individual channel partners and SMBs who have paid Forcepoint their due for so many years, one would expect that they will move on looking not to get burned again.
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