How Tech Data is addressing fragmentation and skills shortages in the security market and helping resellers meet the needs of SME customers
It’s been a little over two and a half years since Tech Data completed its acquisition of Avnet’s Technology Solutions business, with the intention of strengthening its position in the next generation technology areas of IoT, analytics, cloud, security and cyber security. Over this period, the distributor has continued to expand its security capabilities, most recently with the launch of the RECON Solutions Suite (see box). To find out more about what the RECON Solutions Suite brings to the market and how else Tech Data is strengthening its security portfolio, Technology Reseller caught up with David Ellis, Tech Data Vice President of Security and Mobility Solutions, Europe. We started out by asking him about the particular qualities of the security market and what they mean for channel partners and their customers.
“One of the things that makes the security market so unique is that it is very fragmented compared to other IT segments of a similar size,” explains Ellis. “You have network security, you have endpoint security, you have web security, you’ve got risk and compliance, lots of different segments and beneath them sub-segments and in each of them you have lots and lots of vendors. Ten or 15 years ago I remember trying to count the number of firewall vendors and I got to well over 70.”
Ellis attributes the high level of fragmentation in the security market to the protean nature of the threats it addresses.
“Security is a moving target, with new threats always emerging. Because existing vendors often don’t have a solution, start-ups pop up to address specific threats. Then other ones emerge to address the next tranche of issues, until, over time, you have hundreds and hundreds of vendors in the market. Obviously, there has been some consolidation – the likes of Cisco, IBM and Checkpoint have either been acquired or bought other companies to broaden the coverage they have, but you still have lots and lots of vendors.”
This, says Ellis, creates challenges and problems for end users and for channel partners.
“The average enterprise has products from something like 45 different security vendors. Trying to get those products to work together, trying to acquire expertise in 45 different vendors’ products and then, most importantly, trying to retain those skills is like trying to paint the Forth Bridge – it’s a never-ending job. Even if an enterprise is able to train up everyone on those 45 different solutions, the cyber skills shortage means they will soon be tempted away by bigger salaries. This makes it really difficult for end customers,” he explains.
“It’s a challenge from a channel perspective too, because every vendor that you have requires a certain amount of effort. You have to build business plans for those vendors, you have to execute those plans and review those plans. There’s a high cost of sale in just adding more and more vendors.”
Ellis believes the market needs to change and that it’s up to the channel to make that happen, for example by reducing complexity for end customers.
“We’re not saying a partner is going to be able to take an enterprise down from 45 to three vendors,” he says. “But if, over time, they can take them on a journey and reduce the number of suppliers to 10 or so, it would be a positive thing. It would help reduce their costs and improve their efficiencies.”
Focusing on solutions
The way to do this, suggests Ellis, is to be more solutions-oriented than point product-oriented.
“In the past, we always sold point products. We would sell one product; then another threat would come along and we would sell the next best thing to deal with that; then another would emerge and we would sell something else. That is not sustainable. Tech Data wants to help partners address bloat in the market by building solutions and removing some of that complexity end users are facing.”
Ellis says it is doing this in a number of ways. “Firstly, we work with core architecture vendors – vendors that have solutions that play in multiple segments in the market, like Cisco, Checkpoint, IBM. An enterprise couldn’t build its whole security infrastructure just with Cisco and IBM, but it could certainly reduce the number of vendors it carries, and partners can offer solutions to enable that,” he explains.
This, suggests Ellis, is partly a question of portfolio selection and partly about enabling the channel to offer solutions, which Tech Data is supporting through the creation of solutions-oriented Practice Builder programmes in areas like ransomware, GDPR, IoT and endpoint security. These give resellers everything they need to take a solution to market, including marketing collateral, brochures, Powerpoint data, videos, sales battle cards and so on.
“If you are a big security specialist, you can probably create those yourself. But resellers addressing the mid-market and SMBs probably won’t have the expertise or the deep pockets that are needed to build all these things. They can use our programmes to help them go to market with solutions,” explains Ellis.
Resellers such as these are also the target for Tech Data’s new Recon Services portfolio, a range of security services that partners are able to buy and resell.
“We give them all the service collateral, the SLAs, the legal documentation, everything they need to take those services to market, because to build a 24/7 help desk, to monitor customers’ equipment, to build and design a service is a pretty big investment for an average mid-size, SMB-type reseller. We take those costs away from them so they see a much quicker return on investment.”
End user customers, too, benefit from having one trusted solution provider that can put together integrated solutions encompassing products from multiple vendors. Having ‘one throat to choke’ is especially appealing for SMEs that now take security as seriously as enterprises.
“The way SMBs use data now is very different to 10 years ago. Then, an SMB may not have been doing any online transactions. Now, they may have a full digital transformation programme,” explains Ellis. “They are using data differently, so the threats to them are higher than they were 10 years ago, and because of that they need to ensure they have adequate security. There has been a mindset in the market that says ‘I am a 30-man company and no one is going to want to come after me’. But that’s not true. Attacks these days are very broad-based and smaller organisations are at risk too. The channel has a key role to make sure that message gets across to customers.”
As the market for security products has broadened so, says Ellis, has the type of reseller distributors like Tech Data now deal with.
“Seven years ago, people in the security market tended to be either specialists or very big corporate resellers – the Computacenters, the SCCs of this world. Today, there’s a much broader base. Resellers that have traditionally sold some networking, some Microsoft licences, some printers now also want to sell security. They don’t necessarily have the skills to do everything themselves, so there’s a role for distribution to help support them and provide some of the services they may not have the scale to deliver themselves.
He adds: “If you are an SMB reseller you probably won’t have the deep pockets or the size of customer to build a 24/7 support centre supporting Cisco, IBM, RSA, Checkpoint and those kinds of products. You probably won’t have people who can design managed security services and build the marketing collateral around that. You are going to want a partner to do that. And, as the end customer base broadens out to SMBs, there will be a bigger need to deliver security-as-a-service. Because SMB end customers won’t have security experts on staff, outsourcing to a trusted solution or service aggregator who can manage that security for them makes good sense.”