Security proving a secure market

Louise Durack.

The security market continues to grow unabated, and with new business areas frequently arising, along with the increasing amounts of data that companies amass (and the growing legislation requiring them to keep it secure), there seems little chance of things slowing down.

A review conducted by IDC has estimated that over 80 percent of all security software in Australia and New Zealand was sold through the channel in 2007. Senior analyst for security solutions, Patrik Bihammar, confirms that the channel is crucial to the security vendor community as it is the “frontline of understanding customer needs as they often own the customer relationship”.

“Unlike the enterprise market in which vendors can closely manage the relationships with their largest clients, the majority of SMBs are managed indirectly through partners,” he said.

Bihammar agrees it is important for vendors to continue on their path of building strong and sustainable partnerships with the channel in order to gain and maintain market share.

One reason for the expansion is the exponential growth in the amount of data that has to be stored and secured. This, coupled with the regulatory compliance such as HIPAA and Sarbanes-Oxley, is driving the demand for large amounts of storage, and ultimately robust security solutions.

Range of opportunity

There is certainly a wide landscape full of opportunities for resellers within the security market. From end point security and security management to network security and compliance and data loss prevention (DLP), resellers have a whole range of areas – both established and emerging – from which to choose to concentrate their efforts in.

But which offering and vertical markets provide the most chance to excel and more importantly, how many areas should a reseller specialise in, in order to call themselves a specialist?
Taking an integrated approach

Most industry pundits agree that due to dramatically burgeoning end user demand, resellers should be taking an integrated approach to their security services.

Gavin Jarvis, national channel manager for RSA, the security division of EMC, says security is an increasingly complex area within technology and that end users are now seeking ‘holistic’ solutions to their security needs, that prevent them from having to juggle a multitude of vendors.

“End user customers are often very limited in resources and so are looking for one-stop solutions that really maximise their investments and risk scenarios,” he says.

He notes that the requirement for business and IT to align together is continuing to grow, with customers seeking to drive down costs and implement 24/7 support.

For its own part, he says RSA offers resellers various opportunities across the board for both large and small companies, but that there is “no silver bullet to address every security problem.

“In many cases, resellers will have to leverage a combination of solutions, which should be dependent on their individual strengths and weaknesses. We don’t try and sell everyone everything any more and that is where it is very important for resellers to get to know their customers intimately, especially if they want to move into growth areas such as DLP or security information and event management.

“Resellers really need to know their clients very well, understand their business and do their homework on the solutions they have to offer. If they don’t do these things, it can really halt a deal from proceeding.”

David Dzienchiol, channels director for Symantec Australia and New Zealand, agrees that resellers should look at an integrated approach when selling in this space.

He says that since the security giant’s merger with Veritas three years ago, Symantec has also noticed that specialist resellers have of late, been embracing storage solutions alongside security.

“Many security resellers have been taking advantage of the overlap in the security and storage markets and have been expanding their portfolios to encompass both areas,” he says. “This has been driven by end users and therefore we believe that both vendors and resellers should be able to demonstrate some expertise in each segment.”

Nick Verykios is director of Distribution Central. Whilst admitting that a high level of specialisation is required to service the complex security space, Verykios remains adamant that resellers do not have to specialise in any one area of the market in order to succeed and be profitable.

He believes that success within security comes from partnering with strong technology partners that will support them and allow the reseller to maintain their access across the entire end user’s technology.

“Rather than having to contract work out to other specialist resellers – and potentially lose control of what they have – resellers are in a position to be able to have access to the whole lot, from networks to storage, if they just partner with a security specialist,” he said.

In agreement with Dzienchiol and Jarvis, Verykios says the integration of policies is a key area that resellers should capitalise on. “The market has evolved so much now that these days it is more about the prevention side of things – the unknown security threats to business that we have not heard of yet – rather than the detection side of things. This is all being unified in one area now and as such, it is up to resellers to move their customers to vendors that have a more unified approach.”
Darren O’Loughlin, general manager at Dimension Data, disagrees however, that clients themselves, are necessarily keen to see a streamlined approach in the number of vendors they must deal with. He says: “End users do not have a number of vendors in mind when they are thinking of their security needs; rather they are thinking of solving their technical issues with best-of-breed solutions which can be properly implemented and supported.

“There is no point in a multi-million dollar solution being embedded without a good reseller who can identify and deliver its full operating requirements. Aspects such as planning, design, architecture, training and staff resources to drive the business model all need to be thoroughly covered.

O’Loughlin agrees however, that there are limited resources in the market, with clients often looking for a ‘virtualised security team’ that has the capability of running complex solutions.

“For this reason, resellers within the security space need to be able to offer customers the whole range of skills to fulfil multiple needs,” he says.

Surveillance – a lucrative area

One area of security which is acknowledged to be providing good returns for IT resellers is the surveillance business. Globally, surveillance is a growing sector, as many countries increasingly look towards beefing up their internal security infrastructure, whether in times of peace or crisis.

Most resellers of SDVRs also offer CCTV cameras and accessories, so the two segments are somewhat related. The digital surveillance channel is made up of distributors, SIs and resellers. Resellers often operate on a smaller scale, focusing on small surveillance applications and usually purchase their products from distributors before selling them to customers as a solutions package. Unlike the large SIs in Australia, resellers often purchase their products from local distributors and seldom import them from overseas.

A spokesman from CCTV reseller, Seagate says: “This is certainly a lucrative area for resellers. However, as surveillance systems are very much solutions-based, knowledge on how to develop solutions applications to address customers’ needs is critical.

“Most end-users view surveillance systems and CCTVs as expenses, rather than as investments because they can’t see the return from the deployment of surveillance systems. Nowadays, many insurance companies offer lower insurance premiums to parties with installed surveillance systems, and claiming for such insurance can be expedited if there are surveillance systems to provide evidence of incidences.”

He continues: “Applications of surveillance systems continue to grow beyond just physical security; we will see increasing applications and deployment of surveillance systems for productivity monitoring, business analyses, risk assessments and remote site management.”

The spokesman says that when getting into this area, there are a few things to take note of.

“Firstly, know your customers’ needs, why they need it and how it can be extended beyond the primary usage. Then make sure you have the technical knowledge in IT, networking, cabling, engineering and lighting.

“Developing a security plan in case of security breaches is also crucial. As surveillance systems are being deployed at key areas to ensure safety, security and protection, customers will need to know about these plans.”

Finally, he comments: “Be aware of the customer request for very high commitment levels in terms of quick turnaround time, long working hours and high after-sales service.”
A vertical market approach

Verykios claims end-point security is a particular area of business opportunity for resellers looking to capitalise within a multitude of vertical markets such as manufacturing and mining which are heavily reliant on devices for people outside of their standard networks.

Pointing to vendors such as Checkpoint and NetApps, Verykios says that again, it is a complex technology area where it is often preferable for resellers to partner up, rather than attempt to go it alone.

Dzienchiol of Symantec maintains government as one vertical market that continues to offer big reseller opportunities, fuelled by increasing federal and state legislation changes in the wake of the new government.

“Privacy is a very hot topic currently and of course, great for those resellers that are focused on working to help government implement data retention and archiving technologies. IT compliance, discovery and retention management and DLP are also areas, which are big within the public sector at the moment and government bodies are looking to partner with resellers and vendors that specialise in these areas.”

Dzienchiol also mentions telecommunications as a vertical market with a strong need for security offerings, especially from an infrastructure point of view, concerning NextG, web-based and unified communications services.

He adds that the finance sector continues to prove itself hungry for cutting-edge security solutions, with various resellers aligning solutions specifically for this marketplace.

“Financial services is still a number one hotspot for malicious web-based activity and therefore holds big opportunities for strong, security-focused resellers,” he said.

O’Loughlin’s company Dimension Data is a reseller with strong credentials in the financial sector. He attributes this to the sector’s ease with which it understands technology.

“We work across many business areas and some are easier to work in than others,” he says. “It is important that resellers are able to assist their end users in helping them understand the technologies and skills involved, and likewise be able to efficiently articulate the business risks to them.”

Gerard Florian, chief technology officer of Dimension Data agrees that government – both at State and Federal level – are big areas for resellers, with the opportunity to provide enterprise solutions on a large scale.

SME angle

Looking at things from an SME point-of-view, Dzienchiol says this business sector specifically – but in line with the market as a whole – is increasingly seeking a one-stop-shop from which to gain all of their security services.

Referring to Symantec research which points to end users looking to reduce the number of vendor touch-points and deal with just the one supplier, he says: “Some resellers have moved to increase their portfolio to offer a managed service solution for this group, maybe by leveraging their vendor capabilities. This can be a good way of delivering a total solution around the whole spectrum of security technologies.”

Indeed, a recent IDC analyst report has stated that most security functionalities will be outsourced by business by the end of this decade.

Verykios from Distribution Central agrees that a migration to managed services provides further opportunities for resellers.

“Most end users and resellers do not have their own facilities or staff on hand 24/7 for dealing with security, so this is certainly an area resellers should look at getting into,” he says.

“The fact that several niche security specialists went bust over the last few years has not gone unnoticed and proves that you need to be offering more than just a couple of technologies,” he adds. “Additionally, with technology constantly evolving, there are ongoing opportunities for the monitoring, upgrading and assessments that are always needed within the security space.”