During the last 12 months, organisations everywhere have continued to invest in key technologies designed to deliver business efficiencies, competitive advantage, and innovation. But at the same time, economic pressures have meant many of these organisations are also feeling the pinch. The result is that, in many cases, the role played by their technology partners has increased, and they have become more strategic in navigating potential choppy waters ahead.
This is particularly true across the cybersecurity landscape, where a range of emerging trends will determine the success of both vendors and their partners during the remainder of 2023. These include:
1. The growth of open and integrated security technologies
It’s likely that the cybersecurity sector will continue to see a move towards open vendor technologies that can be easily integrated into a tech stack. This is borne out of the fact that the typical SOC and security practices as a whole have a wealth of tools, some that integrate well and others that do a specific task that others don’t.
To get a holistic view of all of those tools and their outputs, there needs to be greater interoperability and visibility at a platform/SOC level. It is clear from the types of high-profile attacks and breaches seen of late that better context around alerts and behaviours is needed to get a complete picture and make faster decisions. As a result, open integration is key.
2. Greater adoption of cloud-scale for storage and compute
Equally important is the need to embrace cloud-scale for both storage and computing power to combat the ever-increasing amount of security data that organisations generate. Each tool and user in an environment typically generates significantly more data than before, and for organisations to store and make sense of it requires cloud-scale platforms that use algorithms and machine learning to identify trends or anomalies.
It is simply not possible for customers or partners to throw enough human power at the problem to address these data challenges. As a result, the use of technology at cloud scale will help bridge the gap between the ever-increasing amounts of data, the complexity of attacks, and the well-documented cybersecurity skills gap.
3. The continuing rise of partner-led XaaS solutions
Together, these trends will also give rise to the continued adoption of Anything-as-a-Service (XaaS) delivered by partners and vendors. A classic example of this is the rise of Detect and Respond (or MDR) services, where a partner (or some vendors) blends technology and people to deliver an outcome to the customer. Essentially, the customer is unaware or doesn’t care about the underlying technology, but the provider is contracted to deliver outcomes based on certain agreed KPIs. In the MDR example, metrics such as Mean Time to Respond (MTTR) or simply the number of incidents investigated in a time period can be employed.
But whilst these metrics are important, customers are also becoming more savvy by moving to business outcomes rather than metrics. This will challenge MSSPs and Service Providers to be more innovative and business-focused on how they report and articulate value in their services.
4. Declining product margins will drive growth in value-added services
Across the security sector, the ongoing decline of product margins will drive growth in value-added services to take up the slack. With many vendors delivering SaaS applications and tools built on hyperscale platforms, the sector will see a rise in the adoption of direct-to-customer marketplaces such as AWS, Azure, and GCP. This has been talked about for a while, and for customers who have contracted committed spending with the hyperscalers, this is becoming an increasingly attractive procurement vehicle.
For complex technology such as SIEM and other enterprise solutions, this will not remove vendor/partner selling effort, but the margins charged for fulfilment through these routes will be low. For those in the industry focused on partner economics, this will be a concerning trend to ensure that value-driven partners can still make money and deliver value to both customers and vendors.
5. Vendor programs will evolve to demonstrate value
In the face of other pressures, vendor programs have to evolve and will continue to do so. While low margins will look great for software providers, partners cannot run an effective business with loyalty to a software provider to then lose out. Vendors in general, and partner-focused sellers within vendors in particular, must work hard to articulate the complete value of a partner ecosystem and build programs to allow partners to stay in the chain, be able to deliver their value, and ultimately make money for their business whilst keeping customers happy and successful.
In the months ahead, it will be fascinating to see how these possibilities play out as organisations navigate potentially challenging economic headwinds.,