Network security vendor WatchGuard Australia has seen an upturn in sales since the second quarter of the 2023 financial year, but is also noting that deals take twice as long to close.
WatchGuard’s ANZ regional director Anthony Daniel said that the upturn has been driven by organisations accessing new budgets and becoming more familiar with the need for cybersecurity.
“Early on in the year, things started off fairly slow. There was still success in terms of sales, but we noticed things slowed down due to the effect of inflation, interest rates,” Daniel said.
“But as the year has progressed on, people are noticing you can still live your life and this is not going to go away, so things started stabilising and as Q2 picked up with the end of financial year, things started picking up again.”
“Customers were buying [at the] end of financial year [because] of their budgets and then when we entered Q3, obviously new budgets, people started getting more familiar with cybersecurity.”
“People now are a bit more comfortable with the way that the market is; not saying it's great, but they're realising things aren't going to get better anytime soon, but the need for cyber security is going is definitely be needed. That's not going to change.”
A side-effect of the challenging times is that it deal closure times have more than doubled for WatchGuard.
“What we noticed was historically, opportunities that would take four weeks to close, and now [it’s] looking to [take] eight to 10 weeks,” Daniel said.
“Things are taking double or three times the amount of time to close now and that's customers doing their due diligence, maybe looking for budgets that they don't have; it's a bidding for budgets.”
“We're seeing a lot of the conversations that we had early on the year starting to close now.”
Daniel said that WatchGuard has attracted larger managed service providers as its product portfolio has grown.
“Larger MSPs are coming to WatchGuard because we now have the full range of solutions and what they're kind of looking for to go to market too."
Increase in monthly subscriptions
Daniel said that WatchGuard has seen an increase in customers choosing monthly subscriptions over term licenses.
“We are still seeing growth and success in the term license business, however there has been growth in our subscription business to cater for the market demands and some customers' requirements,” he said.
“Traditionally, it's always been the term license where the customer would pay one and three up- front."
"What we've noticed specifically maybe since the end of last year up until now, [is that] that model slightly shifted.”
“Now they're looking for more flexibility; [they’re saying] ‘I want to be able to do monthly."
"Let's just see what happens with the market,’ and they’re choosing to go with the monthly subscription, which we offer as well, and they're paying month to month to MSPs.”
Lack of cybersecurity training
Daniel said that there’s still a significant need for partners to offer cybersecurity to small to medium businesses.
“I don’t think there is enough [training.] There never is enough."
"A lot of people are unfamiliar with not only the solutions itself, but how scary it is not to have a security product in place, and if you don't, what the repercussions are.”
“That’s still the ongoing challenge for us, but I think we are working with our MSPs quite well to try and tackle that and it does take a bit of time.”
Insurance does a lot of the heavy lifting
Insurance is also on WatchGuard's agenda.
“A lot of customers are actually doing cybersecurity insurance and that does a lot of the heavy lifting for us, because essentially for you to have cybersecurity insurance, you need a lot of these solutions in place,” Daniel said.
On insurance, WatchGuard is trying to “be part of that conversation” by seeking to land a spot on insurers’ list of recommended cybersecurity companies.
Simplifying it all
Simplifying security remains a focus.
“We have partners come to us and say, ‘look, we haven't got the bandwidth anymore. We haven't got the skill set anymore and we've actually downsized’…that's kind of where as a brand we want to try and help MSPs,” Daniel said.
“The strategy here is MSPs doing a security-as-a-service package where they’re packaging all the security services in one, they're adding on their managed services and they're telling the customer this is how much you pay per month and you're covered with a full security solutions that you need – that simplifies it all.”
“It's not so much that [customers] really want to know the nitty gritty of what each product does, but they need to at least ‘I'm paying X amount per month – is it going to protect me for the long term?”
“That's where partners are finding a bit more success in simplifying it all.”
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
.jpg&h=237&w=349&c=1&s=1)
