WatchGuard Technologies Inc [WGRD] wants to sell off its under-performing RapidStream enterprise firewall business, the company said yesterday, reporting a poor financial performance in the third quarter.
WatchGuard bought RapidStream for $48 million in cash and shares 18 months ago, as part of an effort to move into the higher end of the market. But sales have lagged, despite some deep discounting aimed at rival Nokia Corp [NOK]. Both RapidStream and Nokia appliances are built on firewall software from Check Point Technologies Ltd [CHKP].
WatchGuard said it was recording a charge of $3.3 million to reflect the lower than expected value of the RapidStream business. This contributed to a net loss of $7.3 million, compared to a loss of $3.6 million a year ago.
Revenue dipped to $18.6 million, down 7.5%, largely as a result of WatchGuard’s channel partners reducing their inventories. WatchGuard said that sales from the channel were at record levels, demonstrating demand, but that sales into the channel were down.
In keeping with the times, WatchGuard also pulled out its obligatory application level strategy, which involves focusing on developing strategic alliances with industry leading vendors in the fields of anti-virus, anti-spam, intrusion prevention and SSL VPNs.
Every firewall vendor is pushing this kind of convergence. Those targeting the enterprise, such as NetScreen, ISS and Check Point, are delivering products this quarter. Those serving SMEs, such as WatchGuard rival SonicWall, are moving a little slower.
This article was based on material originally published by ComputerWire.