Check Point: We Offer Much Better Margins Than Competitors

‘Compared to some of our competitors, we can do things financially for you that we don‘t believe the competition can do,’ says Check Point global channel chief Frank Rauch at XChange 2022.

Check Point Software Technologies is taking advantage of its strong balance sheet to offer solution providers better margins, more affordable training, and additional services opportunities.

The San Carlos, Calif.-based platform security vendor plans to invest its cash on hand toward providing partners with better deal registration, more services offerings, and enhanced margins for onboarding net new customers as well as landing upsell and cross-sell opportunities with existing customers, according to Worldwide Head of Channel Sales Frank Rauch.

“We believe that we have the flexibility to offer you margins significantly better than what our competition is offering,” Rauch said Monday during CRN parent The Channel Company’s XChange 2022 event. “Compared to some of our competitors, we can do things financially for you that we don‘t believe the competition can do.”

[Related: Check Point CEO: ‘We Think That Our Business Can Grow Faster’]

Check Point has one of the “strongest balance sheets in the industry” when it comes to operating margin, gross margin, cash on hand and lack of debt, which Rauch said has allowed the company to train partner salespeople and engineers at a fraction of the cost of competitors. Salespeople can get trained at essentially no cost to the solution provider, while training for engineers is half the cost of rivals.

“All we want is opportunity,” Rauch said. “That’s all we’re asking for.”

Check Point’s net income dipped 3.7 percent in 2021 to $815.6 million, while Fortinet’s net income surged 24.2 percent over the same time period to $606.8 million. Conversely, Palo Alto Networks’ net loss worsened 86.9 percent to $498.9 million in the company’s 2021 fiscal year, which ended July 31. Neither Fortinet nor Palo Alto Networks immediately responded to CRN requests for comment.

Rauch said Check Point’s professional services training offers not only instruction for partner salespeople and engineers but also the opportunity to shadow the company’s in-house experts. Check Point would absolutely love to offer all partner training at no cost, and Rauch said there’s been ongoing discussion on the matter. The engineering training requires 45 percent less time in the field than peers, Rauch said.

Check Point also has more than two dozen tools to assist its channel partners, some of which are aimed at partners to use with their customers such as assessments and security checkups while others such as dashboards and quarterly business reviews are intended for the solution providers themselves, Rauch said.

“It’s incredibly important that we open up that services opportunity to you, because you want to realize that margin and not have one of the manufacturers realize that margin,” Rauch said.

For every dollar of security software sold, Rauch said the accompanying managed and professional services opportunity is between $7 and $10. The company also plans to enter the managed detection and response (MDR) and managed prevention and response market, which Rauch said could be a good opportunity for both the company and its channel community.

“We believe that we have the best technology, and we also believe we have the best opportunity,” Rauch said. “It‘s one thing to have a great product. But a company needs to be able to deliver that product for its partners to be able to realize the revenue on it.”

Ovation Technology was historically focused on hardware resale, but the Olympia, Wash.-based state and local government-focused solution provider plans to diversify more into Software as a Service to stay relevant to its customers, according to President Malcolm Waters. Ovation is specifically looking to do more around cloud security given how much of a challenge cloud protection is for customers, he said.

“There’s a business opportunity that’s there,” Waters told CRN. “We may need a little bit of hand holding to create those relationships and take advantage of the opportunities that are out there.”