As we enter the new year, our team of experts have provided us with their 2024 Channel Predictions! Read them below.
1. Customers will seek guidance on cybersecurity regulatory compliance, and especially for NIS2/CRA compliance ahead of the 2024 deadline
Channel partners able to advise customers on NIS2 will reap the rewards. Vendors, distributors, and resellers can play a key role in preparing organisations for NIS2, ahead of the October 2024 deadline for national implementation. Partners can offer expert advice and services to help organisations achieve compliance, working closely with CISOs and their teams to strengthen their cybersecurity posture to better understand organisational risk.
Patrick Scholl, Head of OT, Infinigate Group.
2. Generative AI will continue to drive change across all industries – opening new growth opportunities and raising new challenges
With the rise of Generative AI, technology vendors are launching innovative cybersecurity products to market to meet demand. The channel will need to urgently adapt to this shift, ensuring that they have a deep understanding of Generative AI. Without this expertise, the channel will be unable to help organisations adopt it and miss out on a unique growth opportunity. At the same time, as Generative AI becomes more accessible, new threats will emerge as hackers adopt it for malicious purposes. The channel will need to advise customers on the best tools and intelligence to help detect and mitigate these threats and look at how they can work with new players in the industry to ensure their customers can remain secure in this evolving landscape.
Jamie Little, Pre-Sales Manager (Cyber Security), Infinigate Group.
3. Uptake in managed services will rise as companies grapple with shrinking budgets
Amidst Europe's looming economic challenges, businesses that are already grappling with cyber skill shortages will increasingly turn to Software as a Service (SaaS) solutions for cost-effective, flexible operations. In 2024 there will be a golden opportunity for the channel to step in and provide managed security services, particularly to companies lacking in-house expertise and wishing to have a flexible solution to protect their business from escalating cyber-threat.
In today's economic landscape, many companies face the challenge of reducing costs and increasing efficiency. This pressure has led more and more companies to use managed services. Managed services offer companies the opportunity to outsource IT and business processes, thereby reducing cost and freeing up time to focus on their core competencies. In addition, managed services enable business to adapt swiftly to changing business requirements. The pandemic further emphasised the importance of managed services, as many organisations were forced to quickly adapt to new work models. The need to support remote working and digital transformation has led to increased demand for managed services, particularly in the areas of IT infrastructure, cybersecurity and cloud computing.
Daniel Werner, Director, Technical Services, Infinigate Germany.
4. Resellers will need to find ways to differentiate themselves, as the lines between them and MSPs continue to blur
As demand for IT as a Service (ITaaS) increases, spurred on by the need for business to conserve capital, the line between resellers and MSPs will continue to become blurred. Resellers have an opportunity to differentiate and add value to their offering, through expert consultancy and service optimisation to suit their target customers. MSPs and resellers alike have an opportunity to respond to the pent-up demand for SOC-aaS, to both provide better protection for their customers and also to reduce their own risk not in case of a customer falling victim to a cyberattack.
Distributors can enable resellers to take advantage of this growing tech consumption model, working with forward-looking vendors who have suitable offerings. Infinigate Cloud for example, can help partners embrace the subscription model of technology consumption, helping small and medium resellers adapt without the need for major capital investment in platform and training.
Gordon Lyon, Sales Director, Infinigate UK.
5. The MSP opportunity for SMBs
As work and collaboration continues to switch to the cloud, particularly in the SMB segment where less than 30% of businesses have adopted Microsoft 365, there is a growing opportunity for MSPs to help SMBs implement secure productivity solutions. SMB organisations do not have the skills or knowledge required to properly manage the advanced cloud solutions that are available today, and to keep themselves safe from ever more sophisticated cyber criminals.
Helping SMBs successfully make this transition, is where the MSP opportunity lies. A growing customer requirement is in the SOC-aaS space, providing comprehensive 24*7 monitoring and management of a customers’ security posture. Businesses of all sizes are realising the benefit of outsourcing non-core functions and this transformation continues to accelerate with
99% of MSPs in Europe expecting revenues to grow over the next 3 years.
Keeping customers secure is at the centre of this opportunity and distributors that have both deep cyber-security expertise and cloud capabilities are best placed to help MSPs maximise the opportunity available. At Infinigate Cloud we are unique in our combination of cyber-security experience and expertise, Microsoft cloud capabilities, digital native capabilities with a clear focus on helping MSPs grow their business faster.
Michael Frisby, SVP Cloud Services, Infinigate Group.
6. Distribution will become increasingly services and value led
The shift towards services and value-led distribution has been a notable trend in various industries, and it is likely to continue evolving in the future. This trend reflects a growing emphasis on providing customers with not just products but also a comprehensive package of services and value-added benefits. In today's highly competitive business environment, companies are realising the importance of focusing on customer needs and preferences.
Offering services and value-added features can help businesses better meet customer demands and build stronger relationships with their clientele. In crowded markets, it can be challenging for companies to stand out solely based on the products they offer. Adding services and value to their offerings can provide a unique selling proposition providing a competitive edge. Services often involve subscription-based or recurring revenue models, which can provide more predictable income streams for businesses.
This approach is appealing and can enhance long-term financial stability. The increasing digitalisation of businesses has made it easier to deliver services and value-added features, such as online customer support, data analytics, and personalised recommendations. Providing value-added services can enhance customer loyalty and increase customer retention rates, as customers are less likely to switch to competitors when they perceive significant value beyond the core product. Value-led distribution can align with sustainability goals, as companies can emphasise services and features that reduce waste, improve efficiency, and promote eco-friendly practices. As consumer expectations change, businesses must adapt to meet these evolving needs. Consumers increasingly seek convenience, personalisation, and efficiency, which services can deliver.
Daniel Werner, Director, Technical Services, Infinigate Germany.
7. The cybersecurity market continues to shine for partners, vendors, and distributors with a $360 billion market size by 2027. The opportunity is there for channel partners to develop their service offering and grow in this buoyant market, taking advantage of the channel services 15.1% CAGR. More vendors and partners will diversify into selling cybersecurity products and services, but many will struggle to find the skills they need.
Digital transformation has led to an explosion in IT complexity that has expanded the attack surface. The huge volumes of data companies collect – mostly processed and stored across multiple clouds – render traditional perimeter security methods ineffective. As a result, the scale, frequency and cost of cyberattacks is escalating. Against this backdrop, companies need partners who can help them mitigate risk and respond to threats in an agile way.
As
Canalys informs us, the cybersecurity market continues to shine for partners, vendors and distributors with a $360 billion market size by 2027. Total growth of security software, hardware, and services over the next 4 years averages 12.8% (per year), while services alone have a CAGR of 15.1%. This market is dominated by the channel, as more than 90% is sold or serviced by the ecosystem. While this presents an opportunity for the channel to grow its business, driving more vendors and partners to diversify their offering to tap into these opportunities, this process is not without challenges. This is likely to prompt increased demand for specialised distributors with deep industry networks, skills and services, able to help new entrants access these marketplaces.
Klaus Schlichtherle, CEO, Infinigate Group.
8. What will be the key challenges for the channel in 2024?
The channel has several challenges, which, if overcome, can open the door to as many opportunities:
- Keeping up with the pace of innovation and offering expert advice to customers trying to orienteer in a very complex IT landscape
- Stepping up to delivering IT solutions as a service, responding to customer needs to access IT in a flexible way
- Negotiating the skills shortage affecting the global IT industry, leveraging automation and AI-enabled solutions.
- Responding to the steep rise in demand for effective, holistic cybersecurity in response to escalating cyber crime and more stringent cybersecurity regulations
The transformation from a traditional value-added reseller to a managed service provider with strong cyber security capabilities will continue to accelerate due to end customer demand. Especially from the midmarket end-customer clientele.
Service providers and end customers will complement each other in terms of services (co-managed security operations and services), since on the one hand the complexity and requirements for cyber security solutions are increasing, and on the other hand the infrastructures of most end customers are becoming more complex (hybrid – on prem/cloud).
Both channel partners and end users are struggling with the shortage of cyber specialists. On the part of the channel partners (MS(S)P`s), a high degree of automation and the use of AI-based solutions will therefore be necessary to compensate for this and to ensure a high level of IT security.
In addition to developing and delivering the new services, another important aspect is that MSPs protect themselves from cyber threats, as they usually hold valuable customer data and intellectual property of their customers.
Despite all cybersecurity technologies and services, the likelihood of a customer suffering a cyber incident is very high. Therefore, channel partner's competencies in incident readiness, incident response, remediation and recovery are essential for a holistic cybersecurity offering.
Even though there are some challenges for channel partners to overcome in order to be successful in the cybersecurity market. This business enables long-term customer loyalty, high growth opportunities and the possibility to generate high quality recurring revenues.
These metrics create sustainable value for a channel company.
Andreas Bechtold, Regional Vice President (RVP) DACH, Infinigate Group.
9. What are key security technologies that you expect to generate business for the channel in 2024?
AI enabled solutions, leveraging machine learning and automating processes will be in rising demand as more autonomous, highly efficient for business to run.
Zero Trust Security, due to the need to change tactic in protecting the extended attack surface for rising cybercrime.
SASE solutions integrating networking and cybersecurity at source, making for more efficient and secure networks built right into the architecture of the network.
Security orchestration and automation (SOAR) is a framework that integrates security automation and orchestration tools. This helps to improve the efficiency and effectiveness of security operations.
DevSecOps integrating security into the development and operations processes ensuring security throughout the lifecycle of an application.
Continuous threat exposure management (CTEM) is a systemic approach for organisations to continually and consistently evaluate the accessibility, exposure, and exploitability of their digital and physical assets.
Security awareness training educates employees about cybersecurity threats and how to protect themselves and their organisations.
Julien Cafiero, Global Business Development Director, Infinigate Group.
