Security

The average gross margin for network security was 18.4 percent in the 2007 CRN Profitability Study, off 1 percentage point from a revised 2006 average of 19.5 percent. Meanwhile, the average for client/desktop security was 14.6 percent, off 5 percentage points from the revised 2006 average.

"There is no longer the margin there was a year ago," said Steve Barone, CEO of Creative Breakthroughs, a $16 million solution provider in Shelby Township, Mich. "You have to earn that money back in integration."

While the average deal size for network security rose to $25,100 from $17,500 year over year, the average deal for client/desktop security, which many solution providers concede has become a commodity sale, slipped to $7,200 from $10,600.

Still, other metrics illustrate solution providers are able to recoup their investment in a security practice more quickly than in the past, although this finding was disputed anecdotally by at least one of the solution providers interviewed.

The study shows it typically takes 5.4 months to recoup training costs in network security, while the time frame for client/desktop security is 3.8 months. The median sales cycle for network security is three months, the same as a year ago, while it takes a mere two months to close client/desktop security deals—the shortest time for the 13 practices evaluated in the profitability report.

Next: A look at the security profitability numbers