How to Sell: Security - Part 5 - Raising your guard

Channels for security products will develop along very different lines to those established in the past, writes Simon Meredith.

Security is now very big business, but the gravy train is already disappearing over the horizon. And, to add another metaphor, the bandwagon is getting pretty crowded.

As one observer puts it: "Security is part of the mainstream now. A year ago it was a black art."

The market is maturing and the channel polarising as the specialists find high-end niches and the rest of the channel takes the 'commodity' products to the market.

The high end of security is addressed by a group of specialist vendors that focus on a particular aspect of the market, such as antivirus, firewalls, virtual private networks (VPNs), access control, authentication and encryption, or sometimes two or three of these.

The mass market is populated by vendors - sometimes the same ones providing the high-end solutions - that deliver low-cost products offering protection that is adequate for most businesses, and appliance vendors that are currently enjoying comparatively rapid growth.

At reseller level, a handful of specialists are taking most of the spoils, along with the corporate resellers which have the resources to develop a security capability and enough of a customer base to convince vendors that they should be supported.

Standard antivirus products, such as low-cost firewalls and appliances, are the domain of retailers and mail-order firms, and resellers and systems integrators in the SME space.

In between, there is a mixture of specialist security distributors such as Allasso, Unipalm, Wick Hill, equIP and e92plus, and those that serve many SME-focused resellers.

The broader players are well aware of the growing appeal of basic products and appliances, and are flexing their financial and logistical muscle.

In the future, the overall picture in the security channel is not likely to change dramatically.

For the most part, security will develop along similar lines to other markets, with the technology becoming an integral part of many solutions and specialist resellers meeting more sophisticated needs.

But there will be some differences. Security systems need to be constantly updated, and heavyweight systems need constant monitoring and maintenance, because new threats are always emerging.

Instant Messaging is the latest area of concern. The industry has already created a virtual network between vendors, the channel and users that enables virus updates to be distributed quickly.

In the future a more complex digital nervous system is likely to develop as the industry tries to stay ahead of the threats.

In addition, we have seen the development of managed security services to cater for organisations that either do not want to or cannot employ dedicated IT security staff.

Channels for these services have already started to form, although how much further they will develop is questionable.

As competition bites hard in security, we are now entering a period of consolidation.

Security is already an opportunity for channel businesses and it will grow in importance. No reseller can afford to ignore it, according to Phil Robins, director of channels at Symantec.

"Security is evolving and so are the partners. Those that don't change will get left behind and become vulnerable to their more capable competitors," he said.

We are certain to see some high-end vendors developing partnerships with smaller specialists, and corporate resellers are likely to acquire real security skills in the same way.

Specialists may well form alliances or merge to broaden their portfolio. At whatever level they operate, though, resellers will need to keep up with developments, according to Ian Morris, founder of equIP.

"If I was advising resellers on the best course of action, I would recommend they invest time in understanding the new technologies and then adopt them into their businesses," he explained.

"Resellers must become as evolutionary as the security business. They will have to keep developing to stay in the game."

Best-of-breed vendors have already been established in many parts of the security market and they work chiefly through specialist security resellers, mostly to the corporate market.

While this channel is not likely to change a great deal, the nature of the opportunities here will evolve, according to David Ellis, director of e-security at Unipalm.

As organisations deploy point solutions, they are building up an array of security products that need to be managed.

Providing the tools and the expertise - and perhaps even the monitoring and management of the point solutions - will be a service that resellers can provide.

"[End-users] are being bombarded with information and it's a bit like trying to find a needle in a haystack, because a lot of it is useless," said Ellis.

For this reason, it is not too late to get into the security market as a specialist. "I certainly wouldn't say that it is sown up," he explained.

"There are a lot of opportunities, because to deploy the management products you need to have skills in all of the security products."

Below the best-of-breed route lies the rest of the channel. Major distributors carry security products, as do all across-the-board resellers and retailers.

Basic products can be bought by mail order or even downloaded, in the case of antivirus products and simple firewalls.

This part of the channel is not likely to change very much either, but it will certainly fragment as more sophisticated appliance products arrive and the basic antivirus and anti-hacker products become free-for-all markets. There will be opportunities for everyone, insisted Ellis.

"At the SME level I think it will be spurred on by the adoption of broadband, and within that sector all-in-one appliances will be big," he said.

"We will probably see the does-a-bit-of-everything reseller start to sell these solutions. At the enterprise level it will be dominated by specialists and corporate resellers."

Robins has a slightly different view of the future. He believes that resellers will have to develop knowledge of the specialist security needs of different types of organisations. The needs of a utility company will be quite different to those of a financial services house, for example.

"Looking at it from a customer's perspective is what's important: how they deal with all the different strands of information and relating that to their particular industry," he said.

For most resellers in the wider market, making a profit in security is going to be a matter of timing, according to Harry Gostling, country manager at firewall vendor SonicWall.

"With our products, all you have to do to install it is hit 'next', so non-technical resellers can sell our solutions. The challenge for us and for resellers is to make the next bit of pre-mainstream technology or pre-mainstream profits," he said.

There are always new threats, and therefore new opportunities for vendors to build functionality into products. This in itself will enable vendors to perpetuate differentiation between products for some time.

Adrian Rowland, operations director at Network Box UK, said: "Security vendors in each discipline have their own solutions in mind. Therefore they are not combining to offer best-of-breed solutions across the board. This leaves resellers with solutions that are good in some aspects but limited in others."

He claimed that the biggest challenge facing the industry now is the growth in 'blended' threats.

"They make it much more difficult to protect customers with simple, piecemeal security solutions. It is also increasingly hard for resellers to keep up-to-date on, and understand how to deal with, these latest threats," said Rowland. Commoditisation, then, may not be so straightforward.

Vendors are always looking at new ways to make their products appealing. Some are focusing on wireless security, appliance vendors are adding more functionality.

Intrusion prevention is the mantra now rather than intrusion detection, and the Instant Messaging threat is also being addressed. They are even starting to package services. SonicWall is already offering security training for its channel to re-sell.

In spite of the new threats many security products probably will grow in sophistication and become easier to use.

This will diminish the services opportunity for the channel, but resellers will not be cut out of the equation completely. Some disciplines require too much specialist knowledge.

"The end-user has wised up to what firewalling is about, and there are smaller organisations coming in that are less knowledgeable but can still get into the installation business," explained Ray Binnon, vice president of Shiva. "VPNs are not going to go that way because end-users are not as interested in getting involved."

The time taken to set up and administer a VPN is one factor, according to Binnon. The other is their technical nature.

"You need to have a good understanding of the network architecture. You can't install default policies," he warned.

Richard Millar, UK sales and marketing director at Internet Security Systems (ISS), goes further. He thinks that, if the channel polarises too much, it will be damaging for customers as well as the industry.

"What needs to be recognised by the channel is the ever-increasing need to provide business-based propositions that encompass a security sale," he said.

"The danger of continuing to sell either a 'niche' specialist solution or trying to commoditise security will leave most of the market poorly served and not understanding what they have purchased. In the long run, security will become a noun as opposed to an adjective."

Peter Crowcombe, EMEA director of marketing at Netscreen, also believes that security is different from other markets and will always need resellers on the front line.

"Vendors can do most of it, but that final bit of delivery still has to be the reseller. It is the human element in security that is different," he said.

With many other product areas, the technology makes most of the running. But with security, Crowcombe claims, people have to make the changes and keep the system up to date.

The defenders of systems have to be as creative and inventive as the hackers and virus writers. This war is going to lead to the development of what might be described as a digital nervous system for the security industry.

"A nervous system is a very good analogy for how it will work," explained Crowcombe. "The big corporations have developed that internally already. It's the smaller guys that don't have the 24-hour watch on guard that will get hit if there isn't something in place."

This network will be on constant watch, not only for viruses but for potential or persistent attacks from hackers.

Just as email monitors can identify spam, they will identify specific threats by looking at patterns of communication and access to systems.

They will then update a network of servers with specific information which means that the security system can fend off any attempted attack.

The technology for this sort of service is developing quickly, according to Bernie Dodwell, sales and marketing director at Allasso.

"We're seeing accelerated development of heuristics and artificial intelligence tools that identify things we have not seen before and isolate them," he explained.

Binnon claims that some European security VARs are starting to develop this type of service.

"We have one partner in Sweden who has written a monitoring system. What he says is: 'If my customer phones and I don't know about it, I have failed.' His aim is to be working on the problem by the time the phone rings," he said.

The final major area of development in the security channel will be around managed services. While these will develop further, they are unlikely to be sold widely by resellers and they will continue to differ from the 'packaged' training and services that vendors may provide for re-sale.

Caroline Quirke, marketing manager at managed security services provider I-Sentral Security, claimed that this part of the market is starting to develop.

"There is a great deal of potential for resellers to get involved. We have developed some good partnerships already and are looking to build more," she said.

Others remain sceptical about the potential for selling managed services through the channel. "You can't partition security into different areas; it's got to be co-ordinated," said Dodwell.

"You need to know where the buck stops. That's the problem with selling managed services though the channel. The relationship will always be between the end-user and the service provider. All the reseller can do is educate the customer."

However, Quirke remains optimistic about the prospect of managed security services going through the channel.

"It's really just a question of getting the momentum and the proof points. Once we have enough customers and enough partners, we think managed services will develop into a major opportunity for security resellers," she concluded.

WIRELESS ALERT

According to analyst Gartner, worldwide end-user spending on wireless local area network (Lan) equipment grew by 38 per cent in 2002.

It predicts that there will be 23 million users of wireless Lan hot spots in Europe by 2007. But it has also warned users that using uncertified products is risky.

Security on wireless networks is far from being sorted out. "There are inherent weaknesses in the protocols," explained David Ellis, director of e-security at Unipalm. "You should use a VPN and look at authentication and access control via a firewall."

Vendors are now looking at bringing specific VPN functionality that will enable the creation of special 'demilitarised zones' for wireless networks.

Wireless will continue to be a key opportunity and, for networking resellers especially, security is going to be something they have to know about.

"Elements of the network will get smarter and even if you don't sell firewalls you'll see security elements coming into the switches and routers on the network," said Crowcombe.

Increasingly this will also mean coping with the problems associated with wireless networks, claims Gary Clark, vice president of sales and marketing EMEA at encryption vendor Rainbow Technologies.

"Resellers need to offer security solutions that can measure up to today's new working scenarios," he said.

"Failure to do so means lagging behind the competition, providing only traditional solutions incapable of protecting the evolving wireless threat."

CONTACTS:

Allasso (01189) 711 511
www.allasso.com

e92plus (0870) 200 9292
www.e92plus.com

equIP (01256) 365 500
www.equiptechnology.com

Internet Security Systems (0800) 085 2976
www.iss.net

I-Sentral (0870) 060 9700
www.i-sentral.com

Microsoft (0870) 601 0100
www.microsoft.com/uk

Netscreen (08700) 750 000
www.netscreen.com

Network Box (0115) 922 5156
www.network-box.com

Rainbow (01932) 579 200
www.rainbow.com

Shiva (01270) 88 41 55
www.shiva.com

SonicWall (01344) 668 090
www.sonicwall.com

Unipalm (01638) 569 644
www.unipalm.co.uk