Fear Factor: Distributors Hold Key To Growing Security Market

"It's sometimes hard to put your finger on the ROI of security," says Fish, president and CEO of Kansas City, Mo.-based VAR FishNet Security. "Most customers have had experiences where lack of security has cost them money, and even CEOs in large Fortune accounts are very aware of spam because it clutters their inboxes."

Still, he relies heavily on his distributor partner, Westminster, Colo.-based GE Access, to help him meet demand and continue to generate new business.

"GE has been really proactive," Fish says. "They recently helped us work out a partnership with a large software house, [which had] no services arm. GE helped us develop a better relationship with the company, so we are now providing services for the software vendor's customers. That's above and beyond what a normal distributor would do."

As in other specialized technological markets, distributors can be important extensions of VARs' sales teams as they try to keep pace with security's fast growth and evolution. "In the past nine months, we've seen a lot more interest in things like single sign-on and identity management," says Matt Reaves, vice president of software sales for Cleveland-based distributor Agilysys.

No wonder that the technical expertise and certifications of a distributor is crucial. "Some of our partners are well-versed across all lines, but some are focused on, let's say, identity management, so when they get outside that area...they can call on our presales technical support group," Reaves says. "If need be, we can get on the phone with the partner to gather all the information so the partner can create the right proposal."

Heather Allen, director of the Network Security Solutions Group for GE Access, agrees with Reaves on the importance of the growing security-management market for resellers. She cites Gartner Group figures showing 10 percent compound annual growth rates for products like antivirus, content filtering, and identity and access- management software. In addition to providing technical certifications for engineers, GE Access offers Web seminars, teleconference calls and on-site training to help educate resellers on the rapidly evolving security technology and how to sell it.

But it's GE's financial clout that's most important to Fish. "Our clients will tell us they need the product now. They can't issue a [purchase order] for 30 days, but they give us their word they want it. With 90-day financing from GE, it's easier to do transactions like that," he says. "Those transactions can be several hundred thousand dollars a pop, and we're still a small business, so 90 days really helps."

Fish is also working with GE Access on a demand-generation program to develop two new markets, Colorado and New Mexico. Similarly, NorthWind, a Seattle solution provider that specializes in enterprise-systems management and security solutions for large organizations, has worked with Agilysys on several marketing campaigns to attract new clients, says Jane Todd, NorthWind's president.

"We recently closed a combined deal of $700,000 in software and services with a major beverage distributor," Todd says. "Agilysys assisted us by providing flexibility with our credit limit to accommodate a large deal and in working with IBM to get the proper pricing and costs for NorthWind."