Businessmodel of Varonis Systems

Customer Segments

Varonis Systems has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at organizations of all industries and sizes.

Value Proposition

Varonis Systems offers three primary value propositions: accessibility, convenience, and brand/status.

The company creates accessibility by providing a wide variety of options. It specializes in email and file systems that store valuable spreadsheets, presentations, word processing documents, video and audio files, and text. It also supports the following platforms:  Windows, UNIX/Linux, SharePoint, Exchange, Office365, Active Directory/LDAP, EMC NAS, NetApp NAS, HP NAS, Hitachi NAS. Lastly, its software is used for a broad range of use cases, including governance and compliance, user behavior analytics, data security,  search, archiving, and file synchronization and sharing.

The company offers convenience by making life simpler for customers. It allows clients to:

• Know whenever sensitive files and emails are opened, modified, moved, or deleted
• Analyze behavior across several platforms and trigger alerts on suspicious activity/data breaches
• Obtain full visibility on local/domain admins and identify accounts with unnecessary privileges

• Map permissions, automate reports, and manage audit trails to meet data requirements for SOX, HIPAA, PCI, GDPR, GLB, FERC/NERC, and other compliance standards The company has established a strong brand due to its success. It has over 5,350 clients in over 70 countries worldwide. Prominent customers include Toyota, NASA, ING, L’Oreal, and EMC. Lastly, it has won many honors, including the following:

• Recognition as one of the fastest-growing tech companies in North America by Deloitte
• Info Security Product Guide’s Global Excellence Awards in the User Behavior Analytics category
• Recognition as Auditing/Reporting Solution of the Year at the Computing Security Awards
• Network Products Guide Award in the Bronze category
• Recognition as having “Most Innovative Insider Threat Detection Solution“ by Cyber Defense Magazine for its DatAdvantage product ### Channels

Varonis Systems’ main channel is its network of channel partners, which primarily includes resellers and distributors. The company promotes its offerings through its website, social media pages, and participation in webinars, seminars, summits, and conferences.

Customer Relationships

Varonis Systems’ customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services – The company provides phone and e-mail customer service through a team of technical specialists and engineers.

Training Services – The company provides customized instructor-led training programs in 4-hour blocks. They fall into three categories:  Basic User Training, Administrator Training (consists of advanced instruction), and Remediation Training (includes role- and function-specific training).

Professional Services – The company provides a wide variety of professional services from a dedicated project manager and engineers, including risk assessments, project management, product installation, remediation, infrastructure design/planning, product migrations, and customizations.

Despite this orientation, there is a self-service component. The company’s website features useful resources such as white papers, data sheets, compliance briefs, research reports, videos, and answers to frequently asked questions. There is also a community element in the form of a forum.

Key Activities

Varonis Systems’ business model entails maintaining and updating its platform for customers.

Key Partners

Varonis Systems’ key partners are the resellers and distributors through which it sells its products and services. The company also works with “Technology Alliance Partners“, firms that integrate their solutions with its products in order to provide enhanced offerings for customers. Specific partners include CyberArk, ArcSight, LogRhythm, EMC Corporation, FireEye, ONTAP, Dell, Quantum, McAfee, RSA, HP, and Hitachi Data Systems.

Partner benefits include training and sales/marketing tools and access to a Partner Portal.

Key Resources

Varonis Systems’ main resource is its proprietary software platform, which serves over 5,350 clients.  It depends on human resources in the form of engineers that maintain and update the platform, training employees that provide instruction, and customer service personnel that provide support.

It places a strong emphasis on intellectual property, with 34 issued patents and 41 pending patent applications in the U.S., and 10 issued and 61 applications pending for non-U.S. jurisdictions. Lastly, it has relied on funding from investors, raising $28.8 million from four investors as of February 2014.

Cost Structure

Varonis Systems has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is sales/marketing, a fixed cost.

Other major drivers are in the areas of research/development and administration, both fixed costs, and cost of revenues, a variable cost.

Revenue Streams

Varonis Systems has two revenue streams:

• Revenues generated from fees charged to license its software
• Revenues generated from fees charged for relevant maintenance and other services