Counting cash in IT security

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"These legislative changes and compliance requirements are driving many Australian organisations - both large and small - and government departments to adopt technologies," Dzienciol says. "That will help them automate key IT compliance processes to reduce IT risk and operational costs while achieving internal and external compliance objectives."

Nick Verykios, marketing manager for Distribution Central, believes the mystery of cybercrime is keeping the market strong more than regulation. "You still don't know what the threats are that we're going to be protecting against. We just don't." He dismisses the notion that governance is the driving force behind spending in Australia. Instead he argues business continuity is what makes security vital to his customers today.

"The whole notion of governance has got away, it's moved from protecting myself as a director to true business continuity. It's now not so much around governance, which is the compliance story, but it's business continuity which is a tangible, measurable thing."

Verykios is yet to see a slowdown at Distribution Central. He says commoditised technologies haven't seen a slowdown yet, and a lot of the new breed security technologies are really starting to take off which is causing even more growth.

Meanwhile, sales are still looking strong for distributor Westcon Group. Stacy Hall, security and affinity business manager, says sales are strong and the pipeline is strong for the first half of this year. However, Hall admits a number of deals that were about to be signed off have stalled and come back out as tenders. "This we feel is to get the best technology at the best price from the entire channel. This has put pressure back on to everyone to reduce profitability."

What's hot?
For resellers, profits and positive cash flow are fundamental to the survival of business. While vendors are reporting large sums of cash and growth, what products will generate reseller profits and how can resellers jump on the growth bandwagon?  It's all about cost effective technologies, says WhiteGold's Whitehand.

"Cost-effective technologies will be more prevalent this year. Therefore unified threat management (UTM) devices that provide protection from multiple threats will remain strong, as well as point solutions that perform well for a specific task (for example spam filtering) at a low cost both from an initial purchase standpoint and, more importantly, from an ongoing maintenance standpoint."

Fellow distributor Weston Group agrees but says the benefit of unified threat management is that it allows a collection of technologies to operate in a single console. UTM's appeal lies in its easy deployment and because it is very cost effective in rack space and time to deployment, says Stacy Hall.

He adds: "All products/technologies still have movement except for advance technologies; they will be put on the backburner until capital spend is freed up. Maintenance and support contracts are going to be important now more than ever to ensure they can keep themselves up to date with the latest releases."

Further drivers this year will be data loss prevention technologies and conversations around privacy, says O'Loughlin from Dimension Data. "It can be manual as well as technical processes and clearly that will link into privacy concerns, regulatory and compliance requirements such as PCI requirements around application firewalls."

Symantec forecasts big opportunities in the endpoint management space including data loss prevention, software-as-a-service and compliance. "Information continues to grow at an astounding rate and as such, protecting information should be a top business priority," says Dzienciol.

"By focusing on information-centric security, partners are able to take a risk-based approach that allows their customers to more efficiently secure and manage their information. And by taking a risk-based approach to their security needs, partners are helping their customers make the most out of their IT spend," he says.

Aside from data leakage prevention, Symantec also forecasts strong growth in its storage, backup and security products where there is plenty of ROI. The vendor claims the data centre business will drive storage and server management opportunities for the channel.

"Our backup and de-duplication products continue to generate a lot of customer interest. The transition of NetBackup to a platform-based architecture has enabled customers to take advantage of features, such as disk space back up and virtualisation," Dzienciol says.

With a significant increase in sales of security products, Data#3 grew its overall revenues by 46 percent last year. Laurence Baynham, group general manager, agrees that virtualisation is hot this year as it fits in with the year's theme of doing more with what you have and receiving a higher return.

For open source enthusiasts, Sourcefire claims its collaborative approach gives its products an advantage, says Sourcefire's Allen Male. "The extensive adoption of [intrusion-prevention system] Snort worldwide provides a great opportunity for Sourcefire's resellers to upgrade Snort users to commercial offerings," says Male. "The full range of Sourcefire solutions are priced right for the market and offer significant value to reseller partners not only in margin but in services offering potential.

"Sourcefire offers the channel and resellers some differentiated solutions that are gaining significant market attention," claims Male. He points to the Sourcefire 3D9800, an appliance designed to support up to 10Gbps of IPS throughput, and Sourcefire's RUA (Real-time User Awareness), which links user identities to security through their IPS system.

Security is quite profitable compared to other tech sectors, says Check Point's Mckinnel. In fact he almost guarantees its profitability, because of the complexity involved. "There's the implementation services which you would traditionally get with the technology and then there's additional consulting services and professional services.

I'm talking about everything from preliminary consulting to doing rules-based security assessments right through to the physical implementation and documentation," he explains. "Profitability depends on the sophistication of the project and how much the customer outsources. Ongoing support services are also critical."

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