SonicWall shuffles company managers

Following more than a year of declining revenues, VPN equipment vendor SonicWall has shaken up its leadership, appointing a new chairman and a new president and CEO.

Founder Sreekanth Ravi has been replaced as chairman of the board by Chuck Kissner, who has been on the board since July 2000.

Former Phillips Electronics Components executive Matt Medeiros becomes SonicWall’s new president and CEO, at a time when the company’s revenues have been falling for more than a year. Its profits finally dipped into the red during the last quarter of 2002.

The company’s quarterly revenues steadily grew until the end of 2001, when they peaked at $33.1 million. Since then they have fallen to $23 million.

Medeiros says he is evaluating the company’s business strategy to see whether SonicWall has allocated enough resources, particularly in research and development, to deliver products on the timetable the company has set. If not, that may requre a shift in resources to meet the timetable or altering the timetable. “A company this size has to remain focused,” he says.

The appointment of a new chairman was prompted by SonicWall’s expectation that laws governing board responsibilities will soon be passed to ensure directors operate in the best interest of investors. Ravi is the company’s single largest shareholder. “We’re being proactive here,” says Medeiros.

The company makes a range of VPN gear, from equipment for home offices to gear to protect data centers. The company sells a range of security add-ons including antivirus and content-screening software. It also sells professional services, including vulnerability assessment and training.

The company named Cosmo Santullo president and CEO in October 2001, replacing Ravi. His tenure lasted less than a year, during which revenues started to decline and forced him to impose cost cuts, including a workforce reduction of 15% to 20% in April 2002. He left the company last August, and in the meantime Bill Roach, a former senior vice president, has served as president and CEO.

Over the years, the company has bought other companies, including the November 2000 deal to buy Phobos, which made SSL acceleration and clustering gear for Internet transactions. It also bought VPN competitor RedCreek Communications in an October 2001 deal aimed at securing RedCreek’s customers, management software and load-balancing technology.

In March 2001, the company bought Ignyte Technology, a security consulting firm, and its network operations center for managing customer networks. The deal was meant to beef up SonicWall’s engineering support for customers.

In January of this year, the company announced improved performance and lower prices for its midrange VPN gear, the Pro 230 and Pro 330. Last fall it announced an upgrade to its telecommuter box that enables isolating home-network devices that share an Internet connection.