About

Headquartered in Seattle, WA, WatchGuard Technologies provides integrated network security solutions, including Unified Threat Management, firewall, VPN, anti-virus, malware protection, spam elimination, and intrusion prevention. The Company’s products are available both as physical appliances and as virtual solutions. WatchGuard’s extensible offerings are deployed by customers ranging from small businesses and home offices to large enterprises with over 10,000 employees. WatchGuard markets its products through a network of 15,000 dedicated partners in over 120 countries.

Insight & Approach

Vector identified WatchGuard as an attractively valued public company in a growing network security space. Despite being a pioneer in the Unified Threat Management industry, WatchGuard had misexecuted on its product and marketing strategies and was struggling with the integration of several acquisitions. While the company required a significant management and product reboot, the business’s loyal reseller base and recurring revenue stream of security services gave us confidence that we would have room to execute on such turnaround.

Vector Value Add

Vector has hired a new management team for the business and has driven the formulation and oversight of the strategic plan. Under our ownership, WatchGuard has successfully re-designed its entire product portfolio and released a highly-scalable Extensible Threat Management (XTM) series of security appliances in 2010. We have also enabled the company to invest significantly in its sales and marketing efforts, which coupled with innovative products, have reignited growth and rejuvenated market perception and analyst recognition. Vector has also been active in helping the company identify and diligence acquisition opportunities, including the purchase of BorderWare Technologies in 2009. Throughout our holding period, we have guided and supported the management team in the execution of the strategy, including investment in the product roadmap, repositioning of marketing initiatives, expansion of the support organization, introduction of IT productivity tools, etc.

Results

Under Vector’s ownership, WatchGuard has seen consistent revenue growth, dramatically improved profitability and a shift to a recurring revenue model. The Company continues to innovate and to be recognized as a technology leader by Gartner and other security market analysts.