7 March 2007

New resource enhances UTM leader’s initiatives against evolving security threats, supports security market growth in China

SonicWALL, Inc. (NASDAQ: SNWL) today announced that it has opened a new research and development (R&D) centre based in Shanghai’s Fudan Science Park in order to expand its global software development capabilities. The move supports SonicWALL’s mission of making the Internet safer for businesses of all sizes by speeding the delivery of advanced solutions to complex and continually-evolving security threats.

The centre’s strategic location close to Fudan University, one of China’s premier technology institutions, provides unrivalled access to a talent pool of highly trained graduates, while its location in China supports SonicWALL’s increased focus on this growing market. The security market in China showed a 24% increase during 2006, according to Frost & Sullivan’s Q4 06 security report, fuelled by factors including the 2008 Olympics in Beijing, the 2010 World Expo in Shanghai and a steady rise in broadband usage as a vehicle for online entertainment in China’s principal metropolitan areas.

In addition to development, quality assurance and automation for SonicWALL’s product set, the centre will also undertake localisation and development for the Chinese market, accelerating time to market of new technologies and boosting the company’s growing market presence in China. The Shanghai team will work in close conjunction with SonicWALL’s core engineering resources in Sunnyvale, California.

SonicWALL’s R&D centre is headed up by Vice General Manager Zhong Chen, who was previously director of engineering at SonicWALL in Sunnyvale, California. Adding to its core team of experienced SonicWALL engineers, the centre has also recruited graduates from nearby technology universities, and today welcomes ten recent graduates as full-time employees. The company will continue to add headcount throughout the year in order to serve its growing user base.

In a ceremony at the new R&D centre earlier today, SonicWALL president and chief executive officer Matthew Medeiros said, “This new engineering facility is designed to help SonicWALL in its efforts to make web usage safer by strengthening its capabilities in the delivery of advanced solutions to evolving threats. With the location of our first international R&D centre in Shanghai, we recognise a number of factors: the superlative levels of engineering talent now being nurtured in this country, the commitment of the Chinese government to fighting Internet crime, and the high potential of China as one of SonicWALL’s core markets.”

Cybercrime has grown in profitability in the past six months, with average incomes from the malware economy reaching between $80,000 to $100,000 per year, according to Gartner Group research from December, 2006. SonicWALL spam and phishing statistics (November, 2006) indicate that security threats have become more aggressive and more closely interlinked, resulting in a fourfold rise in loss per victim from international cybercrime (Reuters, November, 2006). “Dynamically updated solutions and rapid introduction of new protection are now essential to protect against the new wave of malware,” commented Medeiros.”

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