NPD Analyst: Security Offers Big Opportunities For The IT Channel

For an IT channel that is already on the rise, security is one of the hottest areas for investment, NPD Director, Industry Analysis, Commercial Technology Michael Diamond said.

"Security is one of the fastest-growing markets in the IT channel," Diamond said at XChange Solution Provider 2017, hosted by CRN parent The Channel Company in National Harbor, Md. "The market is growing, and it will continue to grow."

Diamond cited NPD research numbers to illustrate the booming market, including a security appliance market that has exploded from $77 million in 2013 to more than $1 billion in 2016, at a 10.4 percent CAGR. That growth excludes software appliance growth, which has also seen a rapid acceleration, he said. Ancillary markets, such as physical security, have also grown, he said, with 1 percent CAGR.

[Related: 8 Security Trends Affecting The Midmarket]

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Diamond said venture capital has also poured money into security financing, with more than $13 billion invested since 2010 into security startups.

Partners said they also see that same growth in security in their businesses. Tony Hernandez, president of Norman, Okla.-based BNB Technology, said his business had seen strong growth in security, which he said now accounts for 25 percent of his overall business. He said BNB Technology services a broad range of clients, but particularly those in dental and hospitals. He said of those clients, "everyone is interested in buying" security.

"It's a big part of our business," Hernandez said. "It really affects every facet of our business and every client in our business. That’s one core thing: no one wants to have their data exposed."

Diamond said NPD is seeing cybersecurity rising as a board-level priority at companies across the board. When ranking top five spending priorities by boards of directors, cybersecurity preparedness landed in the number three spot, he said, after board effectiveness and investor engagement. The other two priorities included risk management oversight and talent.

To capture the most of the security opportunity, Diamond said partners should start by thinking like attackers, looking to secure information that would be valuable to a hacker. Some of that information could include intellectual property, financial information, and personally identifiable information.

Diamond said high-growth industries for attack include hospitality, aerospace, retail and high tech, according to NPD research. He said those growth areas for attack add to verticals such as healthcare and finance, that have already seen a high volume of attacks in recent months.

Diamond said partners should also pay attention to emerging areas of technology that might present new opportunities for security. He said big data offers an opportunity for solution providers around security, given a rising amount of data that will need to be secured. He said the Internet of Things also presents a significant opportunity, creating both data and devices that need to be secured across a variety of industries.

The ultimate result is that solution providers don't expect their security businesses to slow down anytime soon, with only growth on the horizon.

"It's important, and I don't think it's going to go down anytime soon. I think the market will continue to go up," BNB Technology's Hernandez said.