Like in many industries, the COVID-19 pandemic has made winners and losers of several vendors in the cybersecurity industry. Those companies prepared for the quick shift to remote work greatly benefited, leaving those without solutions behind, said Leah McLean, Head of Business Development at Cyber Future Foundation and former director of partner marketing at Armor Defense Inc. Following are a few select excerpts from her broader discussion with GLG.
To start off, could you share what’s top of mind with the cybersecurity industry given the current status of the world?
COVID-19 changed everything. The move to remote work was a major aspect, and that was really big for security leaders on the vendor side and among end users in terms of needing to provide secure access for their employees and keeping all of their data, applications, and infrastructure safe. All this while connecting and securing an entire remote workforce, let alone running a security operations center (SOC) team remotely, took a lot of effort. We saw advanced spending in cloud technologies to accommodate for virtual and remote work. This all needed to be managed while cyberattacks and ransomware are ever increasing — it’s costly and scary. Some companies did very well in terms of the solutions they offered, while other companies that didn’t quite have those solutions for remote work took a hit.
What did you see regarding pricing changes, any additional negotiations that took place, or incentives within the channel?
A lot of sectors, including retail and even healthcare, took a hit because of the pandemic, and if that impacted their budget and spend, then that impacted vendors. So, there was a big effort to lower prices and do free trials or offers just to keep customers and/or get new ones with those incentives. Companies offered more free support versus charging it as a service line item, and a lot of assessments were done for free, especially for new prospects. Companies focused more on helping than selling tools.
What did you see in terms of demand in Q2, and what do you expect for Q3?
In Q2, a lot of companies went by if they had solutions that could address the remote workforce. Others had to pivot, take a hit, or implement staff cuts and layoffs while their numbers took a hit. In Q3, we started to see companies bouncing back. Companies who didn’t have solutions that could address the remote workforce started playing catch-up. As the number of attacks significantly increased in the period, that made it more complicated, because many companies were trying to pivot fast to the new normal.
Are there any segments that experienced higher demand than others?
Three segments that stand out are firewalls, endpoint, and email security due to the rapid shift to remote work and digital first. Firewall demand peaked even higher in June. Endpoint solutions, which are next-gen and could address remote work and cloud with virtual desktop, due to a significant amount of breaches still originating at the endpoint, continued to increase in demand. Finally, as most attackers go through email in their first attempt, and with everyone working remotely, email usage increased and gave a boost to the email security vendors. A lot of phishing campaigns targeted businesses and even the vendors themselves. Companies that had email gateways, such as Trend Micro, were able to address this threat.
Now that we’re moving toward the end of the year and many people have a grasp on how to work through this pandemic, SD-WAN is on the rise. It’s neck and neck with identity access management (IAM) — driven by 5G, IoT, and the adoption of cloud.
What’s the status of the refresh cycle? Where are we at now within the cycle?
Due to other priorities and newer technologies around artificial intelligence and machine learning, refresh cycles were delayed or put off. Companies are looking at it in terms of when they have to evaluate all of their IT projects or security projects and how vital they are to increase productivity and uptime. That may not necessarily be the refresh. They’re looking rather at where they have to invest in technologies and infrastructure to accommodate the shift caused by COVID as well as potential attacks.
What’s your outlook for the market for the remainder of 2020 and what are you expecting to see in 2021?
Palo Alto Networks projected its earnings guidance for 2021 at the end of October, which looks to be ahead. Others will be trending to meet expectations. Most companies don’t love Q4 because of the sales cycles, but it’s trending upward. Whatever companies had to go through at the beginning of the year with COVID and the entire shift to remote caused a slowdown. But people are figuring it out and managing. We’re getting used to the new normal. This will help in Q4 significantly to exceed or meet expectations. A lot of start-ups have been able to make it further along as well. If it’s a smaller team, they can move faster and be more agile. If they don’t have a specific solution that can especially help with cloud adoption, the pressure on them will start increasing. The survivors are emerging now. It’ll be interesting to see for next year.
Overall, cybersecurity companies have had to pivot fast and figure things out. The major adjustment was to find what works and what doesn’t fast, head in the right direction, and then change leadership will help to stabilize the industry in 2021.
About Leah McLean
Leah McLean is currently Head of Business Development at Cyber Future Foundation. Prior to this she served as Director of Partner Marketing and Business Development at Armor Defense Inc., where she led the marketing and go-to-market strategies with alliance and channel partners to drive pipeline and revenue. Leah is also the Founder of Multi-Cloud Leadership Alliance, driving AWS, Microsoft Azure, and Google Cloud Platform education.
This tech industry article is adapted from the October 27, 2020, GLG teleconference “Cybersecurity Market Q3 Update.” If you would like access to the full teleconference transcript or would like to speak with technology industry expert Leah McLean, or any of our more than 700,000 industry experts, contact us.
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