Virtual Tradeshow: Down Economy Creates Opportunity For Security VARs

During Everything Channel's Virtual Trade Show Wednesday, security experts from CA, Kaspersky Lab, Symantec and Trend Micro discussed the new opportunities for solution providers created by the down economy that included everything from beefing up managed service portfolios to expanding assessment and consulting roles.

Panelists, led by Everything Channel CEO Robert Faletra, said that despite the economic recession, security spends often will remain static, and in some cases grow, simply because protecting assets and data is becoming more important for businesses in all market segments.

One potential area for growth will be in the midmarket and lower segments, which generally have fewer resources and less comprehensive security infrastructures than their enterprise counterparts, they said.

"The midmarket is now becoming much more aware simply by the avalanche of threats that are out there. There's probably more opportunity in the midmarket for companies that haven't put in the essential security barriers of the large enterprises," said Steve Orenberg, president of Kaspersky Lab for the Americas.

However, while companies are looking to cut costs, panelists said that most companies are still aiming to get the most bang for their buck and likely won't sacrifice product quality for cost.

"You need to quickly change it to value. No one is going to win on a cost basis. All you're going to do is drive down profitability," said Cody Leser, Trend Micro senior director of North America channels.

Panelists agreed that one trend likely to create more demand for strong security solutions is the increasing sophistication and criminal nature of the security threats. Security threats are more technologically advanced than ever before, they said. And unlike years past, current malware is created specifically for criminal purposes.

"[Malicious code is] clearly criminal," said George Kafkarkou, CA general manager and senior vice president of the Internet security business unit. "It's all going on behind the scenes. It's all trying not to be detected. It's clearly with the intent of profitability."

"What we're seeing is that right now, it's these widely distributed third-party applications that are attack vectors for 90 percent of the malicious code we see," Orenberg said.

In addition, the changing economic climate likely will give way to a rise of business models that incorporate managed security services, panelists said. Managed security services offer a simple, reliable and cost-effective solution for customers in need of security but without the resources to maintain comprehensive security infrastructure. As more businesses incorporate cloud-based services into their security environments, the recurring revenue stream and higher margins will offer a reliable source of income for solution providers.

"It represents a new kind of business model that may be more advantageous," said Rick Hoffman, Symantec's senior director of VAR channels. "There's very little overhead or software to install. It plays purely in an economic environment that's challenged."

"All of these things will find their levels. It will not be one or the other," Kafkarkou said.

Meanwhile, panelists said the tidal wave of global layoffs will create more demand for data loss prevention and data leak protection as businesses will be required to protect sensitive data and financial assets from vengeful insiders.

Going forward in 2009 and beyond, panelists agreed that the down economy will open up doors for partners to provide a wider range of auditing and assessment services.

"We're looking at appliances that can go in and take a look at the entire network," Leser said. "Any time you have increasing threats from criminal activities, it makes sense to take a look at what you have right now."

"You can go out and sell the service if you get certified on the solution," Hoffman said. "This is an opportunity to make money."