Third of security firms at risk, warns research

David Hobson: It is tough out there and a lot of firms do not want to admit that

A third of IT channel firms operating in the security market are making a loss. That is according to new research from Plimsoll that lays bear the precarious existence of life in the UK security channel.

Some 64 of the 216 IT security firms analysed in Plimsoll’s analysis were found to be in jeopardy and were given a ‘Danger’ rating by the research firm. Due to the intensity of competitive pressure, one in three is making a loss, Plimsoll added.

Conversely, Plimsoll identified 86 resellers that are continuing to enjoy commercial and financial success.

VAR Global Secure Systems (GSS) was among the 40 per cent of firms given a ‘Strong’ rating and managing director David Hobson agreed that Plimsoll’s findings matched what he is seeing in the market.

“A lot of people are pretending that everything is rosy,” he said. “But it is tough out there and a lot of firms do not want to admit that.”

Paul Spencer, managing director of Axial Systems, claimed the downturn had led to a polarisation in fortunes among security resellers.

“Some security resellers do a really good job of identifying a niche,” he said. “And these tend to be the ones that do much better when times are tough, because they are able focus on the areas they are strong in rather than having to lead on price. I would expect the 40 per cent of resellers that are in strong health to be mainly comprised of niche specialists.”