RSA Media

RSA Media & Analyst Briefing

March 2-4, 2010

The CxOs Balancing ActChanging World, Changing Priorities, Increasing Danger

2

Changing World Business

Priorities

Partner & Customer

Collaboration

High ROILow TCO

Workforce Effectiveness

Risk Management

& Compliance

New & Malicious

Threats

Macro Economics

Mobile

Social Media

Technology TrendsImpacts to Productivity & ROI

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Infrastructure Demands:

Bandwidth

Performance Availability Ease of use

Manageability Security TCOConverged

Comms

Cloud/SaaS Consolidation Virtualization

Web 2.0 Mobile Devices

2001: Network Perimeter 2010: Network ExpansionVOIP Users

Traveling Users

Remote Employees

Corporate Data Centers

Customers or Suppliers

Remote Access

External Users

The Business Impact – Perimeter Contraction / Network Expansion

User Protection

Access Control

ProductivityControls

Saas, Web 2.0 Real-Time Apps

Perimeter / Internal Security

Business Communication

Protection

Beyond 2010 – More Collaboration, More Content, More Communications = More IT Challenges

Partner Access

WANsExtranets

Collaboration

Cloud/SaaS

Converged Communications

Employee Productivity & Security Impact

Copyright 2009 SonicWALL Inc. All Right Reserved.5

Blogging Facebook Twitter IM Streaming video Streaming audio Downloading files Playing games Webmail Wikis

25% of office Internet traffic is non-business related(Burst Media Survey, 2008)

50% of surveyed companies said at least 30% of their bandwidth is

being consumed by social networking traffic

(Forrester, Feb 2009)

Malware, Trojans, BotNets, Intrusions out of control

A Secure Future

What if....

You could control, manage and protect your global network easily, automatically? You could control different applications more easily, manage their bandwidth, and

block objectionable applications? You could receive & share threat and defense data around the world in real time? You could secure any user, any device, using any application from anywhere? You could scale services securely without compromising reliability? You could access any Carrier, SaaS, or Cloud without security impact? You could always see and know what the malicious activities are on your network? You could do all of this and actually lower your TCO? 

Dynamic Security for the Global Network

Global, Distributed, Mobile and Cloud

Real-time Situational Visibility and Awareness

Communication of Shared Threats and Shared Defenses

Proactive Risk Management and Compliance

Best Economics

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What's New?

Introducing Portfolio of Security Virtual Appliances

Family of Virtual Appliances Focused on SECURITY

Deployed in VMware environment

Choice and flexibility for Enterprises, SMBs, and Managed Service Providers

Solutions to range from Global Management, Reporting, Email Security, SSL VPN

New Category of Products Focused on Application Intelligence,

Control, and Security

Multi-Gigabit Appliances delivered with Application Intelligence & Control AND Intrusion Prevention

New Intuitive Visualization Tools to categorize and take action on all network activity for optimization

Flexible Deployment as the Gateway or In-Line behind a Firewall

Delivering Virtual Appliance Solutions

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Technology TrendsImpacts to Productivity & ROI

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Converged Comms

Cloud/SaaS Consolidation Virtualization

Infrastructure Demands:

Bandwidth

Performance Availability Ease of use

Manageability Security

TCO

Web 2.0 Mobile Devices

Cloud, SaaS, Consolidation, VirtualizationDriven By TCO and Optimization Needs

Technology Trends Plus Fundamental TCO Economics

Source:1. IDC, U.S. and Worldwide Server Installed Base 2007–2011 Forecast, Doc #207044, May 20072. IDC, Virtualization And Multicore Innovations Disrupt The Worldwide Server Market, Doc #206035, March 20073. Source: VMware

Benefits of Security Virtual Appliance Strategy

Advantage Details

Increased Security: Hardened SonicLinux Operating System; users are not able to tamper with the virtual appliance

Lower TCO: The virtual appliance is a pre-configured virtual machine - there are no dedicated hardware prerequisites, no professional service fees and no hidden costs. It's all in the appliance!

Higher Performance Optimized software and hardware architecture; no unnecessary processes active

Reduced Complexity:

Simplified product selection, product integration, ongoing support.

SonicWALL GMS and ViewPoint Virtual Appliances

Introduced at RSA

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SonicWALL GMS Virtual Appliance

The GMS Virtual Appliance is based on SonicWALL GMS version 6.0 announced earlier this year

Flexible, powerful and intuitive solution to centrally manage and rapidly deploy all of their SonicWALL firewall, anti-spam, backup and recovery, and secure remote access solutions

Enterprises and MSPs use SonicWALL GMS to manage thousands of appliances simultaneously Centrally create &push security policies Provide real-time monitoring and Alerting Intuitive compliance and usage reports

from a single management interface.

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SonicWALL ViewPoint Virtual Appliance

The ViewPoint Virtual Appliance provides granular reporting on one or more SonicWALL security devices, allowing administrators to closely track network utilization, monitor security activity and view Web usage.

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Delivering Multi-Gigabit Application Intelligent Firewall with IPS

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Technology TrendsImpacts to Productivity & ROI

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Infrastructure Demands:

Bandwidth

Performance Availability Ease of use Manageability Security

TCO

Web 2.0, Converged Communications, Mobile Devices Drive Need for Dynamic Security While Maintaining Performance

Cloud/SaaS Consolidation Virtualization

Converged Comms

Web 2.0 Mobile Devices

SonicWALL E-Class NSA E8500

Application Intelligence and IPS

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SonicWALL NSA E8500: High Performance Application Intelligence & IPS

Comprehensive Inspection W/ Ease of Use Application Intelligence & Control Powerful IPS, Multi-gig performance Management of traffic Visualization of traffic RFDPI Technology (low latency) SSL Traffic Inspection “Bump in the Wire” mode or

traditional gateway

The Technology 16-Core, 4GB RAM 8.0 Gbps Stateful Inspection 3.5 Gbps IPS 2.0 Gbps Application Control Detects over 1,000,000 unique

threats

Detects, Classifies and Controls over 1,100 Unique Applications

Unique Technology ApproachEvery bit, every protocol, every user & application

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Scalable Engine Architecture Re-Assembly Free DPI – at wire speed Virtually no latency introduced Designed for current & future protocols Foundation for all technologies

Clustering Technology Increased availability Increased throughput

Massive Scalability & Bandwidth Multi-core, parallel architectures Unlimited data size or formats Unlimited number of connections

Best Economical Solution Easy to adopt, deploy and manage Modular platform

Real-time, Deep protection Simultaneous, proactive, multi-threat scanning & analysis Real-time communications with SonicWALL GRID Network Behavioral Analysis & Protection

Application Intelligence & ControlIdentify- By App- Not by Port & Protocol

Categorize- By app- By Category of App- By destination- For which person or groups

Control- Allow- Block- Bandwidth Prioritize

Critical Business(Allocate Bandwidth)

Observe, Act, React(Dig in, Take New Action)

Acceptable Applications(Limit Bandwidth)

Social(Allocate bandwidth to Marketing

Block Social to all others)

Application Chaos(So many on port 80)

Bringing It All Together

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Converged Comms

Cloud/SaaS Consolidation Virtualization

Web 2.0 Mobile Devices

Virtualized Environment

Network Security Protection for

Virtualized Environment

SonicWALL Financial Results

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Use of Non-GAAP Financial Measures

To supplement our consolidated financial statements presented in accordance with GAAP, SonicWALL presents certain non-

GAAP financial measures. These non-GAAP financial measures are not intended to replace GAAP results. GAAP results

are the most comprehensive and accurate representation of the performance of the company. Management does, however,

regularly use these non-GAAP financial measures to evaluate certain aspects of the companyÕs operating performance against

established business objectives such as departmental operating results in terms of cash operating expenses as a percentage of

revenue, and inventory turns exclu sive of non-cash expenses. Management further uses these non-GAAP measures as a

benchmark of the companyÕs performance against our competitors who frequently present similar non-GAAP financial

measures. The company has in the past and may again in the future use these non-GAAP financial measures as targ et metrics

for its incentive compensation plans. Additionally, management establishes its annual operating plan and manages operating

expenses each year exclusive of certain recurring expens es which have no impact on cash from operations. We believe that

investors benefit from this additional disclosure as it provides transparency into financial information used by management in

our assessment of operating performan ce, provides a cash basis comparison of operating results against other companies in

our industry, and provides the basis of targets established for the incentive compensation plans.

Fourth Quarter 2009 At-a-Glance

Q4 2008 Q3 2009 Q4 2009 Seq. % Growth

Y-Y % Growth

Revenue $54.3 $50.7 $54.1 7% 0%Non-GAAP Gross Margin 71.3% 73.3% 70.7% -- --

Non-GAAP Op. Margin 15.5% 15.8% 16.2% 5% 5%

Non-GAAP Net Income $5.9m $5.4m $6.0m 11% 2%

Non-GAAP EPS $0.11 $0.10 $0.11 10% 0%Deferred Revenue $103.5m $116.7m $124.2m 6% 20%Cash and Investments

$166.9m $203.0m $215.9m 6% 29%

*Please see non-GAAP disclosures.

Momentum in Deferred Revenue

020000400006000080000

100000120000140000

Q408 Q109 Q209 Q309 Q409

Subscription Deferred Other Deferred

Momentum in Cash Flow

0

50

100

150

200

250

Q4 08 Q1 09 Q2 09 Q3 09 Q4 09

Cash and Investments

$36 million in CFO in 2009

Revenue Breakdown

Q4 08

Q3 09

Q4 09

Product

Lic. &Serv.

60%40%

62%38%

42%58%

Total Revenue by Product Category

Q4 08

Q3 09

Q4 09

UTMSSLSCMCDP

77%

78%

78%

9%

9%

9%

10%

9%

9%

4%

4%

4%

Product Revenue by Product Line

Q4 08

Q3 09

Q4 09TZNSAOther

35%

38%

38%

42%

41%

40%

23%

21%

22%

Our Vision

We believe security solutions should be “smart” enough to adapt as organizations evolve and as threats evolve, dynamically, globally.

We believe customers around the world should have the ability to control, manage and protect their global network easily and automatically. 

We believe our customers should be able to receive and share threat and defense data around the world so they can anticipate and stop attacks before they happen. We want our customers to be able to secure any user, any device, using any application from anywhere so they can collaborate securely across different networks.

All this needs to be achieved with maximum ease of deployment and at the best economic value and in a compliant framework. 

Thank You!

Colleen NicholsSr. Director, Public Relations [email protected]

John Gordineer Director, Product [email protected]

Kelly BloughSr. Director, Investor Relations [email protected]