Aventail to focus on products business after services sell-off

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SSL VPN major Aventail Corp. sold off its managed services business to Netifice Communications in March this year, and is at present focusing on its products. While the size of the deal remained undisclosed, Netifice reportedly raised $55 million in financing to fund the acquisition of the Aventail business unit. Prior to the deal, Aventail was deriving more than 60 percent of its revenues from services. Chris Hopen, CTO and co-founder of Aventail Corp., in an interview with CyberMedia News throws some light on the rationale behind the sell-off and the company's growth prospects moving forward.

Can you explain the rationale behind Aventail's decision to sell off its services business?
If you look at the managed services business, a certain percentage of security services are bought through service providers while the rest are products that are run, operated and managed. Our goal of being in the managed services space was to leverage on the services and solutions so that we could get Aventail into more markets. The service was successful in taking what we had and giving it to a service providers and letting the SPs generate SSL VPN-based revenues. We did the deployment fast and that was a good value proposition to managed services providers.

Chris Hopen

Netifice recognized our asset and felt like they needed our managed services business to grow their company. We weren't trying to sell the business since it was successful and profitable. But they made us an offer that we couldn't refuse.

Nothing has changed on the products side of the business. What has come with this sale is a long-term agreement for at least 3-4 years with Netifice. We will provide them with hardware, software and consulting.

Was the move also considered because of the multi-vendor nature of the services business?
Yes. SPs are not necessarily measured on technology and functional portfolio but on services. Those who want to buy from SPs want to buy firewall services, or dial-up services bundled with the services. These are services components that we did not want to invest in. But Netifice is into this and it is part of their services portfolio. So they have a multi-vendor solutions management. We realized this asset could be even more valuable in the hands of a better service operator.

How does Aventail's Indian center fit into the company's overall scenario?
We built the Aventail team back in September 2003 for product and technology development. As we ramped up on development, we also grew the team to include QA and testing. About 90 percent of the entire QA for our products is done here. We've tried to build a set-up in India that mirrors that in the US.

We have 50 people in India now. We are looking at India as a growth vehicle to put more into products and get releases faster than our competition. Now, we plan to enhance the support division.

What kind of new products and features that you are focusing on?
We want to expand the product line both in terms of scale and capacity. We've had a narrow footprint in terms of the product family and so we want to introduce low cost solutions and push them into the SME space. Besides, we also want to grow into larger scale deployments. We are also working on high-density bladed type appliances along with another hardware provider.

How do you compete with players who offer integrated SSL VPN and IP Sec solution?
People who sell end-user based IP Sec solution have included SSL-VPN because they sensed the threat from the SSL VPN space. However, if you look at the functional part of their products, they don't replace the IP Sec part of the product because they don't want to cannibalize that part of their business. The breadth and the type of access we provide with our platform have always included IP Sec like access.

Priya Padmanabhan