Security Lockdown!

Recently, market researcher Yankee Group predicted that 90 percent of global security infrastructure would be outsourced by 2010. Not surprising given that organisations are increasingly becoming hungry for the services required to protect their precious company data.

With the constant proliferation of attacks such as viruses, malware, spyware, phishing and in the worst cases, cyber terrorism, the security market is one of the very few in this industry that is on a constant upward trajectory. With many of these threats a reality for so many companies these days, the market is ripe for resellers and service providers to take advantage.

And coupled with a big trend towards outsourcing these services over the next five years, there are good dollars to be had for channel players in the right position – most certainly as managed security service providers (MSSPs).

Companies worldwide are also coming under pressure to comply with regulations such as Sarbanes-Oxley, and Basel II, and are increasingly turning to outsourcing. Yankee says the MSSP market will grow from US$2.3 billion in annual revenues in 2004 to US$3.7 billion by 2010.

If you believe Yankee's optimistic prediction for the future, MSSPs will dominate the security market in years to come.

But will this really be the case? Sven Radavics, country manager at security appliance vendor Watchguard certainly thinks so, despite commenting that Yankee's prediction was a bit ambitious.

Radavics says he would like to see the security market go down the managed services path. 'Security is an area that requires a lot of expertise and knowledge and that's always changing,' he says.

Over the past few years in Australia there has been a high adoption of managed security services by big enterprise clients, but the SME market is still behind mainly due to the fact that SMEs haven't been educated enough that managed services are available.

'Security consulting firms really have got the advantage. Security is not a box, security is a process not a product and that's where resellers that understand recurring revenue and consulting will have an advantage.'

Even today there are too many box droppers in the security space, he says. Watchguard trimmed its reseller base throughout 2004 in order to stick with 'the right resellers,' Radavics explains.

These days, selling security is about understanding business process, and managing and mitigating risk, not box dropping and basic consulting, as Radavics points out: 'I think a lot of resellers will sell a firewall today like a product. They'll sell basic consulting and that's it. They'll call [the customer] in a year and remind them that their license is due for renewal.'