Wendy Thomas: Secureworks President and CEO
Marc Van Zadelhoff: Welcome to "Cyber CEOs Decoded," where we speak with CEOs, from established security giants to up-and-coming disruptors, getting the inside track on what makes a cybersecurity company tick. I'm your host, Marc van Zadelhoff, the CEO of Devo. And I'm very excited about my guest today. It's Wendy Thomas, the president and CEO of Secureworks. Wendy, welcome to the show.
Wendy Thomas: Thanks very much for having me. Looking forward to today.
Marc Van Zadelhoff: I'm really excited about this. You have a really fascinating career and background and lessons that I think are relevant for some of the times that we're going through now. So I'm really looking forward to the discussion and hearing your perspectives. As you well know, because I know you've looked at a couple of the prior podcasts, I always love to go back to kind of where people begin, Wendy. And just start with that with you. So where are you from? Where did you grow up?
Wendy Thomas: Sure. So I was born in Washington, D.C., and grew up in the Northern Virginia area and absolutely loved how international it was. You know, people were constantly coming in and out all over - from all over the world. Public school kid, lots of family in the area, but I was an only child, and I'm still friends with my best friend from second grade. So she keeps me from getting too big for my britches, as my granny used to say.
Marc Van Zadelhoff: There are a lot of people that are multigenerational from that area. I lived in the D.C. area myself for 10 years. We were in Bethesda, but it felt like it was hard to find a lot of people that had been there for a few generations.
Wendy Thomas: It is a very transient area. But, yes, we're multigenerational and still have family up there.
Marc Van Zadelhoff: Awesome. And what was your first meaningful job as you were growing up?
Wendy Thomas: So my first meaningful job was at a mall store called Bathtique. And so we used to sell everything that you could possibly need to furnish your bathroom. And the thing I remember most about it was - I think I had some small hourly rate, $1.50 an hour or something, but it was a commission job. So it was a sales job.
Marc Van Zadelhoff: Oh, OK.
Wendy Thomas: And we used to kind of compete with each other. There was one other Wendy there, in particular, that I was always looking to see the sales leaderboard to see which one of us had sold more stuff. And so the way that you did that was you would sort of bundle bathroom designs - the toilet seat cover, if you remember the old carpeted things you'd put on, and the curtain and the decorations that would go with it. So I would memorize the catalogs, what we could order. And then as people came in - and I would ask them what they were looking for and what they liked and point out a few things that seemed to match their idea of decor. And then we'd just try to upsell them the whole bundle. So it was a good first job.
Marc Van Zadelhoff: That's awesome. And were you saving for something at that time? I remember when I was working, I always wanted to go back and visit my family in the Netherlands. I was saving for airfare.
Wendy Thomas: So that's a great thing. In my youth, I used to say I worked to travel, but at the time, I really was just saving to go to college.
Marc Van Zadelhoff: Yeah, that's cool. And when you look at your work now - we're going to talk more about your work at Secureworks, which is an amazing leader in the cybersecurity space - what do you take from your upbringing to work? Do you look back on that time of your life and think about sort of either mentors or lessons into today in your day job?
Wendy Thomas: Yeah, there's probably two areas that just - I have memories all the time, right? Certain things flash in your mind as you're going through your day. And one is that my parents - they married really young. They had me really young. And so I actually watched them go to college...
Marc Van Zadelhoff: Oh, wow.
Wendy Thomas: ...And then later go back and get their master's degrees. In fact, I used to take notes for my mom in her business school classes when she had to work late kind of thing. So it just made me understand the value of continuous education. It doesn't matter how old you are. It doesn't matter whether you didn't do it the traditional way or not. They paid for it themselves while working. And it just - that level of diligence and focus on education is something that has always stuck with me and is part of my continuous learning and just curiosity.
Marc Van Zadelhoff: Wow. What did they end up doing? I mean, this is an interesting angle. What did they end up doing?
Wendy Thomas: So my mom was working as a secretary when I was a kid, and then she got her degree. And long story short, she got her CPA when she was about my age now. So she got her master's in business, undergrad in business and accounting and then became a CPA and then a CFO of a small private business and then bought her own firm and started a valuation CPA firm. Yeah, so she really just sold that business just a few years ago and retired. So it's quite a journey.
Marc Van Zadelhoff: That is amazing. That is really cool. My mom was always a secretary, an executive secretary, and funny, she was at EMC for quite a while here in the Boston area.
: Oh, OK.
Marc Van Zadelhoff: So since you were in that Dell EMC orbit yourself here.
Wendy Thomas: So, yeah, I guess the other one - and we talked about this briefly - was my grandfather. So my father's father was a big influence. We actually lived with him for a while when I was young. And then we lived less than a block away from him later. And he - you know, I didn't come from a family that had all gone to college. He left school in eighth grade. He actually took a job to support the family. And his first job, which is a great story, was that he - out in Centreville, Va., he had this huge kind of draft horse. And they would fell logs in the forest, and he had to drag them out with the horse. And so he would always tell that story of, like, they used to fell them so it was hard to get them out.
Marc Van Zadelhoff: Yeah. OK.
Wendy Thomas: And they would watch him do that. And the thing he kept telling me about that was you shouldn't expect everyone or anyone to make stuff easy for you, right? They want to see what you're made of. So, you know, never let them see you sweat. Just dazzle them with what you can do. He ended up working his way through the maintenance department at GW Hospital and running all of maintenance when he retired. And I remember his retirement party. He was a really beloved leader. And it was what I experienced with him - just invested a lot of time in me and treating me like an adult. I think he taught me to drive a car when I was 10. So he was just - he was fearless.
Marc Van Zadelhoff: That's an amazing story. And I can imagine that on your hardest day in your relatively privileged - in our relatively privileged jobs, your hardest day is nothing like trying to drag a massive tree with a horse out of the woods.
Wendy Thomas: Right, when you're 14 years old.
Marc Van Zadelhoff: Yeah. Believable. All right. So we're going to get into your career. And I think this is where - I think it's just a fascinating career because you really have - obviously, you're a CEO of a company now, a quite large company - running that. But you started off really much more - not in cybersecurity - and in the finance area. So walk me through here, as you got into your career, your undergrad and kind of how you got into finance in the early days.
Wendy Thomas: Sure. So I went to the University of Virginia - good in-state tuition - and actually majored in economics. And the theme that attracted me there is the same thing that still I see in cybersecurity today. And it was - economics is basically the mathematical representation of observable phenomena. So...
Marc Van Zadelhoff: Right.
Wendy Thomas: ...You can translate behavior or predict behavior with mathematical models. And I just thought that was a fascinating sort of language translation. And so as I - I worked in commodities trading at the board of trade and off the floor for about four years after undergrad.
Marc Van Zadelhoff: Commodity trading, like busy floor, you're waving stuff.
Wendy Thomas: Pits.
Marc Van Zadelhoff: And is it - pits - that's right. Does that - is that really the way it was?
Wendy Thomas: It was absolutely rambunctious.
Marc Van Zadelhoff: I mean, I can't tell 'cause we're remote. But are you tall?
Wendy Thomas: (Laughter).
Marc Van Zadelhoff: Did you - you know, were you, like, the only woman in that floor at the time? Or how - what was that like?
Wendy Thomas: So when I started at the board of trade, I was in an audit role. And so I - they used to wear jackets based on their bank. And so I would stand in the pit at the opening and the close, and I would arbitrate what they call out trades because you're literally just looking at each other and hand-signaling to each other across the pit to do a trade. And sometimes, things get out. And then if the market moves, you can imagine how angry those folks get. So that's how it started off. And it was very physical and didn't smell very pleasant most of the time.
Marc Van Zadelhoff: And you just dove into that like it was just the most normal thing in the world. Like...
Wendy Thomas: (Laughter) My first day was a little bit overwhelming. But I - they kind of adopted me. They used to call me little lady. I think they thought I was kind of cute (laughter).
Marc Van Zadelhoff: That's funny. I believe if we close our eyes and then open them again, you're in Vienna doing something there. How did you end up...
Wendy Thomas: Yeah. So I got my - yeah - my master's degree. So I went to the international business program at South Carolina. And so you start off and spend most of your time - at least in that version of the program - in Austria at the school of economics there. So I got my master's there. And that's when I moved towards finance, where - based on a lot of advice from people who knew me and sort of knew more about the world of corporate finance than I did, that that would be a good a good fit for what I liked in terms of the combination of using numbers to make good decisions and kind of predict outcomes and that kind of thing. And it was absolutely a great fit.
Marc Van Zadelhoff: After that, you came back to the U.S. And I think you ended up in Atlanta, which is where you still are today, I believe.
Wendy Thomas: That's right. So in 1998, I was recruited out of school into a finance leadership development program at BellSouth, which later was acquired by AT&T. And it just gave me exposure to different rotations from, you know, business unit finance to investor relations. It just kind of put a lot of arrows in my quiver in terms of the different specializations in finance and let me see for the first time how a big global corporation actually runs.
Marc Van Zadelhoff: I spent some time at IBM, which had a reputation for being good at training people and leaders and certainly salespeople. Was BellSouth a good training ground in that sense?
Wendy Thomas: It was extraordinary.
Marc Van Zadelhoff: Yeah.
Wendy Thomas: And I would say that the finance folks that I worked with and the CFO that - I spent two years traveling with him to meet with investors and employee forums and that kind of thing. I learned more from him than probably any other executive that I've worked for. He was a gruff Auburn engineer who became a CFO who had a nontraditional background to become a CFO.
Marc Van Zadelhoff: Right.
Wendy Thomas: And he was absolutely brilliant. So I got some tough love, but some really good advice and insights from him about how to lead very big organizations.
Marc Van Zadelhoff: That's amazing. Anything stand out from that experience? Anything you had to do that was difficult or transformative that you could share?
Wendy Thomas: I would say the toughest transition was the movement from wireline to cellular and DSL. So it was essentially a business that had to cannibalize itself.
Marc Van Zadelhoff: Yeah.
Wendy Thomas: And how do you make that change happen in an organization that's cash flowing, the kind of cash flow it is, and frankly, is moderately still monopolistic?
Marc Van Zadelhoff: Yeah.
Wendy Thomas: And it was watching him make those long-term choices for short-term pain to keep the business relevant.
Marc Van Zadelhoff: Yeah.
Wendy Thomas: That - most of the lessons that, frankly, I apply in my job today - I still remember certain pivotal moments of, are we ready to make this leap? - and how he made those decisions with data and testing assumptions and asking a lot of questions.
Marc Van Zadelhoff: It's a good lesson because I think certainly in the software and technology space, you almost have to cannibalize yourself if you're in a company for more than five years. Things change so fast. And if you're not reinventing and chomping at what you invented five, six years ago, you're probably not renewing. So that was a great lesson to have. Before we get to Secureworks, she had one more pit stop at a company called Internap, I think, 2006 or so.
Wendy Thomas: I did. So we were a colo provider who moved fairly quickly during my time there into a content delivery network. And it was pretty early days for that, so serving customers like Disney. And it was a public company, finance role, but was trying to also evolve fairly quickly with changes in technology and take advantage of that increasing colo - you know, pre-public cloud growth vector.
Marc Van Zadelhoff: Anything you take away from that experience that you brought with you, any lesson?
Wendy Thomas: Yeah. Unfortunately, I had a pretty tough lesson there, where - we had acquired a company right before I joined. And we hadn't integrated the company. It was kind of running on its own. And as we started to migrate - and I was in finance - as we started to migrate that company to our billing system and our accounting system to report revenue, we started getting notes from customers that said, why are you billing me? I haven't been a customer for years. Who are you, and what are you charging me for? And so we had a real moment of realizing that we had a tough situation with the price we had paid and the revenue that we were recognizing.
Wendy Thomas: As you can imagine, anytime people are in a position where there's really bad news associated with that, especially as a public company, that's where the - your character stands out. And there were definitely some tough moments where I had to stand up around our goodwill valuation declining and things like that with the audit committee that were - honestly, they were tough. I was still pretty young.
Marc Van Zadelhoff: Yeah.
Wendy Thomas: But really made me very conscious of how important integrity is in an organization. When the chips are down and it's really bad news, how do you make sure that there's space to be honest and transparent?
Marc Van Zadelhoff: Going directly to the board is - takes some guts. And I can think of one time, also early in my career, I had to do that. And it's - those are moments where you take a deep breath. In 2008, you end up becoming the VP of finance at Secureworks. And I actually got to IBM a year earlier. And around 2008 - I didn't tell you this earlier, but it was around the time that IBM started shipping me to Atlanta almost every other week because I took a job helping an acquisition IBM had done called ISS in Atlanta on Barfield Road.
Wendy Thomas: I'm familiar with that.
Marc Van Zadelhoff: Yeah. And so I remember I got down there, and it was the first time I started hearing about Secureworks, which was competing with a part of ISS' business. But you started in 2008 as a VP of finance there. And today maybe give us a sentence on Secureworks and the size of Secureworks today. And then let's step back to 2008 and what you stepped into then.
Wendy Thomas: Sure. So today we're about half a billion in revenue in about 80 countries with customers, about 2,400, 2,500 teammates here, so definitely a lot bigger than we were back then, which - I think we were just under 45 million, something on that front. I knew everybody's name in 2008.
Marc Van Zadelhoff: Yeah. Those were the days. Yeah.
Wendy Thomas: So we were much smaller, down in a tight office where there were three of us to an office or, you know, cubes stacked up. So it was definitely a startup.
Marc Van Zadelhoff: And so you start there as a VP of finance. And for you, did that feel like a big-reach job, imposter syndrome, hard to do? Or was that a - kind of a lateral move - pretty easy step-in job from your two prior experiences?
Wendy Thomas: That one was a step-in job. I definitely had the big leap as I moved out of finance later. At the time, we were going to take Secureworks public.
Marc Van Zadelhoff: Right.
Wendy Thomas: So they needed to build out a finance team and get ready for that process. So it was a challenge, but it was not necessarily as daunting as when I moved to product.
Marc Van Zadelhoff: You have the right skill sets, and you're going to imitate a new thing, which is take the company public. And so I'm sure that was smooth sailing. That just happened easily, or?
Wendy Thomas: 2008 - the economy was fantastic. There was no such thing as Lehman Brothers (laughter) or money markets breaking the buck.
Marc Van Zadelhoff: Oh, right. Right. So what happened in reality? What was the reality?
Wendy Thomas: So the reality was things really fell apart in terms of the overall market. So we certainly weren't going to go public. Fortunately, we were not cash-strapped, per se.
Marc Van Zadelhoff: Right.
Wendy Thomas: Although we were very much watching every dollar in and out. And our board at the time - we had a little bit of venture capital, a little bit of PE money - said, you know what? Asset prices are distressed. Let's go buy assets, get bigger so that when we do - when the market does turn around, we have a more valuable asset to take public. And that's what we did. So after we sort of dusted ourselves off of not going public, we bought two companies right in a row.
Marc Van Zadelhoff: Yep.
Wendy Thomas: That's why we have a Providence office and then a company in Scotland.
Marc Van Zadelhoff: I remember that.
Wendy Thomas: So we more than doubled the size of the company in six months and integrated those acquisitions within six months of each other and turned around a couple of years later and were obviously a much bigger organization. At that point, we were looking to go public again. In kind of 2010, we were sitting on just under 300 million in revenue.
Marc Van Zadelhoff: I think the dusting-off comment is maybe one we should pause on because I think if you just added a few years - 14 years - to 2008, you'd be in today. And almost every sentence you just said, we could probably apply to a number of cybersecurity companies. And I won't name them. But there are a number that have been beefing up their finance teams and their overall IPO preparedness and assuming that probably by the end of last year or sometime now, they would have been on the Nasdaq - right? - and it didn't happen. And so what did you learn from that time period? I mean, clearly, it was double down and take advantage of the situation. Did you have moments of despair, like, oh, this is going to be easy; I was, you know - maybe make some quick money - and I mean, maybe not just you personally, but, you know, lots of employees all going through the motions of it?
Wendy Thomas: Absolutely. And that's what it is. It's - any time you're on a certain path and all of a sudden, it's jarred loose, there's the speed with which you recognize it and sort of - OK - take a moment, but get over it and pivot mentally quickly to, all right, what are we going to do now? The faster that can happen, the better a business can perform and take advantage of things. But that's easier said than done. The group feels that. At the time, everybody in the company owned a piece of the company. They all knew what we were doing. We had talked about it for years as the goal. And all of a sudden, that's not the goal anymore. And so that change management and that rallying of the collective psychology is a really important part of leadership. And you have to do it with yourself before you can do it with the rest of the team.
Marc Van Zadelhoff: The opportunity you saw there was to buy some assets, as you did, right? That's the opportunity you quickly seized on. We talk about our IPO moment, and we sometimes have some debate internally about, how much do we talk about that at all? - because it's just a moment, right? It's just a moment of the company's history, and there are more important things in companies' paths, like innovation and pleasing customers and all that. Do you think there's too much obsession on the IPO moment and the cyberspace or in the software space? Or do you think it's a good rallying cry to have?
Wendy Thomas: There's a real tricky balance on this, I think - and having been owned by Dell Technologies, which has changed capital structure many times to optimize their business. Right now it's best to be private. Right now it's best to be public, to have debt, to not have debt. Those kinds of decisions - you should always - never set a structure as the goal, in the sense of the structure should enable what's best to grow the business and build value for customers. The IPO moment is a little bit different because there's personal wealth-building for the team. And so that does matter to the team. It is motivating to the team.
Wendy Thomas: So I don't think it's a bad thing to necessarily talk about that 'cause it's also a great deal of work to galvanize the organization to do that and to prepare for the quarterly scrutiny that comes after that. To make good decisions for the long-term, not the short-term, after you're public is a key thing to prepare for as a leadership team. So I think it's good in terms of it's an accomplishment. It's a recognition. It's a great way for people to build wealth for their families, to go to college and do all those important things. But it is not the end-all, be-all. And that's the balance that you have to strike in terms of how important it is to the organization.
Marc Van Zadelhoff: Super. I'm going to take that into - under advisement.
Wendy Thomas: (Laughter).
Marc Van Zadelhoff: Grounding back to where we were - 2008, you get there. Markets change. 2010, you're readying for an IPO, and as you already mentioned, it ended up not happening again, but for different reasons.
Wendy Thomas: So in 2010, we were readying again. So we were much bigger, ready to go out. Markets had turned around. And at the same time, we had just signed a pretty large channel resell agreement with Dell. At the time, we loaded all of our software onto Dell servers of various sizes and throughput and sent those out to customers to deploy in their network. And so they came around and said, who's buying all these servers? And it was us. And at the time, they had just started on an acquisition tear, really. I mean, they acquired quite a few companies back then. We were one of the early acquisitions of Dell, so what turned quickly from a channel agreement into them deciding that security was an important part of their portfolio. And that closed just at the start of 2011. So we shelved our offering and took advantage of the incredible sales distribution capacity of Dell to marry our security offerings up with their sales team.
Marc Van Zadelhoff: So you joined Dell, and you stay for about six months, and then you actually leave.
Wendy Thomas: I did. I joke - BellSouth got bought by AT&T, which is based in Texas. And I left there 'cause I wasn't ready to move to Texas, and then got acquired by another company based in Texas and wasn't ready to move to Texas. So after about six months of integration work, I needed to stay here in Atlanta with my family and moved to First Data, running their finance and financial systems team, which for a processing company, is a whole lot of financial data that's pretty important - but with a crew that was from BellSouth, so the chief financial officer was the old chief accounting officer. We had a good crew there that all knew and trusted each other to work well together.
Marc Van Zadelhoff: So you were at First Data for about two years, and then you moved on to be CFO at BridgeFi.
Wendy Thomas: Yes. So my first CFO role, small private company, software development, online sales - and it was a completely new business for me and really the first time I was in what I'll call traditional software, if you will, and learning all about search engine optimization and optimizing online sales, running call centers. So I actually ran our call center teams there. All of that was just a new learning opportunity for me to be much more operational, and had a great relationship with the CEO, who had a sales background. So that was another opportunity for me to absorb from someone who had a very different skill set than I did and travel with him to meet with prospects and customers. I probably learned more about sales in that couple of years than anything else.
Marc Van Zadelhoff: Wow. OK, great. Obviously, you're back at Secureworks. You rejoined Secureworks in 2015, so a boomerang employee, I think is what that's called.
Wendy Thomas: Yeah, we talk about that here. Look, I had always loved Secureworks - the people, what we did, the culture - and so when the CEO called me and said, we're going to go public, and this time I swear it's going to happen. Come back and help. We're going to spin out of Dell, at least partially. It's something I had never done. So as a finance professional, I had raised that, sold companies, bought companies, but never actually gone public. I've had a couple of runs at it - one at BellSouth, two for the Latin America Division - but it just never worked out, and so I was pretty interested in making that happen, and just because I knew the company so well. So I'd say about nine months, came in, rebuilt the finance team. I obviously had to rebuild the accounting team, spin our systems out, go out and tell the story to investors and went public.
Marc Van Zadelhoff: Awesome. And was it what you expected?
Wendy Thomas: I would say that IPO process was more difficult than I ever anticipated, just the intensity of it, and even the night before, when they're going through the pricing, and is it going to happen and can it happen and do we just - at every moment, it can go off the rails, so it's a pretty intense process. But it forces you to be very focused and deliberate in your message about where the value is created in the company. It forces you to set out a multiyear vision that investors can hang their hat on, and so in that sense, it really focused the company in on what mattered, what the strategy was, how you create value, and that's always a good galvanizing force for an organization.
Marc Van Zadelhoff: Some critique of being public is that it forces you to be more short-term-oriented, this quarter, next quarter. Do you feel that that's true, and how do you mitigate against that?
Wendy Thomas: It is absolutely very, very tempting, as the CEO who's on the phone with sell-side analysts and investors, to take away near-term pain by maximizing certain decisions for near-term growth that aren't necessarily the right long-term decision for the business. You can go back to that DSL cannibalizing landlines story - lots of moments like that as a public company. And for Secureworks, as you and I talked about, we're going through a pretty big transition from a services company to one that really delivers SAS solutions using our own proprietary XDR platform. And that shift has come with divesting certain top-line businesses that have shrunk our top line, grown our margins, but still, no one's ever going to pat you on the back and say good job in the street for declining revenues, even though two years from now that's absolutely the best answer for long-term value.
Marc Van Zadelhoff: Amazing. Yeah. It's hard to get rewarded for that one step backwards, two steps forward motion, especially...
Wendy Thomas: There's no reason for them to have faith.
Marc Van Zadelhoff: Yeah. But you seem to be doing a pretty good job of it. But I just want to go through some steps you made because this is one of the things that I think is fascinating about your career is - I mean, besides starting in that trading pit in the beginning - is going from, really, that finance focus obviously now to CEO. But there are a couple of steps - shorter steps in between that really kind of maybe rounded out your appreciation of all aspects of the business. I mean, walk us through. You were the VP of strategy and finance after the IPO and then kind of broadened, right?
Wendy Thomas: That's exactly right. So - and it was probably the biggest leap for me, personally and professionally, that I've taken at that time. So, as you know - I actually alluded to it - having come back to Secureworks after about four, maybe almost five years out of the security space, I was really struck by how different the security landscape was when I came back. Now, I spent nine months just buried under getting ready for an IPO, but as we came out of that, there was much talk about our strategy, our business model and, frankly, how security wasn't actually working to stem the tide of the fight. And so we spent a good bit of time as a leadership team talking about, people are spending more on security. We're certainly working hard and making more money, but we haven't actually fixed the problem. How do we fix the problem?
Wendy Thomas: And as we went through a strategy process for ourselves in terms of what technology changes and business model changes we needed to take in the way we deliver security to customers to actually turn the tide, that turned into the CEO at the time turning to me and say, that's the strategy that makes sense, and the board - you're now the chief product officer. Congratulations. Go make that happen. And that was probably the scariest career moment I've had, because everyone, just like me, was saying, you're a finance person. You're not an engineer. What the heck are you doing taking over product? And so you have your own internal doubts. You have some number of people with their doubts. How could you possibly pull that off? And I have this philosophy about everybody has a superpower. There is something that everybody brings, and when they deploy that superpower, no matter what they're doing, they can do what no one expects, and my superpower is just the ability to see systemically across an organization or an industry and what the points of leverage are, where the gears touch, and then galvanize people around that to go climb a mountain they never thought they could climb.
Marc Van Zadelhoff: That's a pretty good superpower.
Wendy Thomas: You know, what's funny is, when you work with people who you don't have their skill set, and so you have to rely on them and value them and put them into a system that works best for everyone and everyone's contributing, you can do amazing things without knowing the first thing about how to necessarily write that line of code. Now, I also spend a lot of time online learning a whole lot about our technology and meeting with the team to just pick their brain. So you have to keep learning, but it is truly about seeing the value every person can bring to tackle a tough problem. And this team is unbelievable, what they built from scratch in two years and launched in the market.
Marc Van Zadelhoff: I've been through those moments as well, where you take a job where your background isn't suited to it. And I think if you use that superpower you mention, but I think especially - you can go into it with arrogance. Like, hey, I have other skills, so I don't need to know this stuff. Or you can go in there with curiosity, and I think it sounds like that's what you did, you know, the learning and the curiosity. And I have that a lot. I always say to my sales guys, I didn't come up through sales. I mean, by now I've done more selling than I care to admit, but I didn't grow up in that profession. And I actually am deeply curious about what makes our sales team tick and how they do their craft. And yeah, I think it endears me, going out in the field and hanging out with them.
Wendy Thomas: The fact that you're willing to get out there and put yourself in their shoes...
Marc Van Zadelhoff: Yeah. Yeah.
Wendy Thomas: I think they definitely appreciate that kind of empathy and investment.
Marc Van Zadelhoff: And you went from there to focusing on customer success after that.
Wendy Thomas: Obviously, we're changing the company to start to sell our XDR platform, so a set of software products, which we had never done before, wrapped in certain services - manage detection response, that kind of thing. And so while we had spent two years building this platform and then getting ready to launch it, we had transformed the engineering and the product organizations, but the rest of the team was still delivering managed services on other technologies, and there was a real transformation that had to take place there. That role meant that I took on all of our consulting and delivery, our counterthreat intelligence unit, to take them on the journey of transformation for the company as well. And we very purposefully called that role president of customer success because it was about customer outcomes, not necessarily our business model.
Wendy Thomas: So journey was pretty intense in terms of launching new delivery teams, managing career transitions for everyone in the delivery organization over time and really starting to engage customers about how they use our software. It was just - everything about it, in terms of relationships with customers, the functions of the team, training the team on different skill sets and helping them make their career plans and transitions with us - was a whole lot of change management involved in that. But instead of getting myopic about our own internal change management, we had to stay focused on what created success for customers, and that was the theme that really ran through all the transformation that we were making.
Marc Van Zadelhoff: So, Wendy, you've been CEO since September of 2021. It sounds like, based on what you said - and it may surprise people - that the harder step for you was that CPO role. And it sounds to me, if I were to guess, that becoming CEO by then was maybe not as big of a step, was not as hard. You've gotten all these experiences. But maybe I'm making an assumption that's not valid.
Wendy Thomas: It wasn't easy, but it was a lot less daunting because I had been through - to your point, I also don't have a sales background. I'd say that's the biggest shift in the CEO role is - I spend a lot of time with customers in the product role, but that's different...
Marc Van Zadelhoff: For sure.
Wendy Thomas: ...Than being in one that's more of a sales and relationship management. So there was still that learning curve, right? No matter what job, what company, there's always this learning curve. But the more daunting one was the one where I hadn't proven I could do something different.
Marc Van Zadelhoff: Yeah.
Wendy Thomas: And that was moving from finance to product.
Marc Van Zadelhoff: Awesome. I think that's just fascinating because, again, I started observing you guys in - one might say stalking you guys - back in 2008 as kind of a competitor to the IBM managed security services business. I think we both were innovators in managed security service provider, MSSP, right? And you're making that transition now. So maybe - I'll take a step back on some other topics, but where's Secureworks at today?
Wendy Thomas: So we launched, not quite three years ago, the new platform and started the transition of our business and moved out of certain businesses, either where we were just outsourced security labor for large companies or managing - directly managing other companies' technologies, firewall management, that type of thing. So we've moved away from all of those businesses. The vast majority are almost gone. But we hit a big mark in the first quarter, which is that 50% of our ARR, annual recurring revenue, is now on the new platform, new solutions. And we'll exit this year at least 75% on the new business, new platforms. We call this the end of the beginning year, where that transition is done, and we can really focus on the go forward. But we've been growing really rapidly, double-digit sequential quarter. So we hit $180 million in ARR and 1,400 customers after 2 1/2 years of launch. So we're really proud of the growth rate.
Marc Van Zadelhoff: Congratulations. It's really a great story. If I just take a step back, you told Cybercrime Magazine, honestly, I never pictured myself as becoming a CEO. It could be loaded in so many ways. So unravel that for me. That quote, I found interesting.
Wendy Thomas: It's just so far away from the way I grew up, and honestly, that - it just wasn't painted as the picture of success in my family. It was a very hardworking, always-bettering-yourself kind of picture of success. And so for me, I've always gravitated towards where I could make a big difference, a big impact. And you do that - right? - by helping other people be their best selves in pursuit of some joint mission together. So I've always gravitated not towards a title but towards points of leverage in an organization. And that has to do with the combination of, one, kind of the area of the business where making a change for the better can have the biggest difference, that can make the biggest impact, and, two, where my skill sets are a good match for galvanizing that change. So when people say their career ambition is to be a title - right? - I want to be a director, or, you know, I want to manage people, I always ask them, do you want the job or do you want the title? 'Cause you can have the job now. You don't need the title to go fix that thing that you'd fix if you had the title. Just do the job, and the title will come. You'll actually be making an impact that you're proud of, and you'll care a lot less about that title. So I just think moving towards points of leverage that match what you're good at and what you like to do is my definition of success.
Marc Van Zadelhoff: But it is a pretty cool job, being the CEO.
Wendy Thomas: If it makes young gals start to think, I can picture myself as a CEO or just doing something nontraditional that they may not have the perfect resume for 'cause I've never had the perfect resume for any job I've had, that would make me proud of my life's work.
Marc Van Zadelhoff: That's very cool. You've spent a lot of time, if I read about you, thinking about the talent shortage in cybersecurity. And maybe it relates to a little bit about inspiring people to take the career path to CEO or into cyber. But what's your thinking there?
Wendy Thomas: So it remains an issue. And you certainly read about the statistics of how many millions of openings there are relative to the talent gap. But kind of like turning your mindset of the disadvantage to the advantage - so why don't you change the need for that much talent? We do have a lot of security people who don't necessarily love their early career because they spend a lot of time doing things that machines can and should do. And so if you use the technology, like our XDR platform and automation - you hear about SOAR and orchestration - it's really important for a few reasons. First and foremost, to actually prevent breaches, the customers. Speed matters in terms of finding and evicting the adversary quickly. So automation is most important for that.
Wendy Thomas: And I think for consistency of response, right? So you don't - if you know what best practice is - you've got the statistical. You know, this is the best card to play in blackjack or hit me or don't hit me, right? You're playing the probabilities with machines, then you free people up to focus on the things that are new and different to start to teach the machine. And that makes their job much more interesting. It makes their career path more appealing and shifts the talent need as well. So I think the combination of win-win of making it a much more exciting and impactful job but also actually preventing damage from cyberbreaches - you get the win-win from that kind of automation and, you know, automated detection and automated response capabilities.
Marc Van Zadelhoff: Your leadership - as we close out here, any big philosophies you have on leadership or tips in that area?
Wendy Thomas: So I guess there's probably two that come to mind right away and maybe one that people always tell me that they notice about me that I don't think about consciously. But the first one is mission matters. I think that your personal mission statement in life as well as the work that you do is really important. And that's part of what attracted me to security. It is really a force for good.
Marc Van Zadelhoff: Yeah.
Wendy Thomas: And I sincerely believe every day we make the world a better, safer place. And when you can't get gas 'cause a pipeline is down, I mean, people understand now what that means when a hospital or a school is ransomed.
Marc Van Zadelhoff: Become concrete.
Wendy Thomas: It absolutely becomes very real. And so I think the pride that comes from both a personal and a work mission is important. And the second one that we've talked about a little bit - 'cause I think everyone brings value, and everyone has that superpower. And I think it's our job as leaders to help people find it and apply it in a way that makes the collective organization better, stronger. Those are really the two big ones.
Wendy Thomas: But the one people always talk about with me is I'm very present. So when I'm with them, I'm paying close attention, and I'm listening. I say things back. I ask questions. I look them in the eye. And I make some very conscious decisions about my phone and what alerts and what doesn't, that kind of thing. But that's apparently something that is endemic to me. And I'm very interested and very curious, to your point, about what people have to say and really getting to know them and understanding what that superpower is. But I do think being present is an incredibly important thing for people to know that you care, you're engaged, and they matter.
Marc Van Zadelhoff: Yeah. That's a super skill. And I think I've had to learn that, coming out of a history of probably having attention deficit issues. But I have learned it, and I agree. It's really, really key to be able to understand and leverage that curiosity and learn things and, frankly, get people's respect in meetings that you have with them. So that's great. Where is Wendy Thomas going to be in five years?
Wendy Thomas: I have big ideas for Secureworks. I think we're on the right path to actually solve the cybersecurity problem. And if I'm the one that can help us do that most successfully, that's great. But no matter who or what that is, I just want to be at a place where I'm making a positive difference.
Marc Van Zadelhoff: Awesome. And then finally, any advice for aspiring leaders before we close out?
Wendy Thomas: I guess to think about that personal mission statement and that superpower. I think knowing yourself is really important to be able to lead others and to help them be their best selves and live their best lives. And if that's your mission as a leader, knowing yourself first is kind of fundamental to doing that well.
Marc Van Zadelhoff: I really like that. I was talking to someone on my team recently that was obsessing about things that they wanted to improve. And I like what you're saying because sometimes it's also really good to recognize what your superpower is and make sure that you're doubling down on that source of strength.
Wendy Thomas: Yeah. Fuel the good. There's some things you'll never fix.
Marc Van Zadelhoff: All right, Wendy. Well, thank you so much for joining us on "Cyber CEOs Decoded."
Wendy Thomas: Absolutely. My pleasure. Thanks for having me.
Marc Van Zadelhoff: And thank you to our audience for listening today. Be sure to join us for the next episode of "Cyber CEOs Decoded."