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Wed 22 Oct 2008 04:00 AM

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Strength in security

Security distributors in the region are creating a niche for themselves as more companies are making protection of information a top priority.

Security distributors in the region are creating a niche for themselves as more companies are making protection of information a top priority. Channel Middle East quizzes some of the region's leading IT security distributors on the fast-changing nature of the business and asks them to predict the future of the market.

The region's IT scene is full of specialised nooks and crannies occupied by unique systems integrators and served in turn by distributors offering carefully-developed portfolios. However, there is one such niche that is emerging from its corner all guns blazing and that is security.

If channel players in this segment are heard then security is no longer an after-thought for enterprise companies. Gone are the days when security merely entailed a virus checker and password protection.

Now that the market has increased in sophistication, members of the distribution channel are profiting from developing a dedicated security business and hunting for vendor partners that can answer the changing security needs of the market.

As the security domain exhibits strong signs of maturity and even greater potential - not to mention an ongoing consolidation trend among vendors - it is the distributors in this realm that are facilitating the quality of service systems integrators offer to secure sustainable revenue. In fact, it is often difficult for distributors not to be involved in the reseller channel's work.

Security distributors are taking responsibility for reseller, and indeed end-user, training and education, as well as working tirelessly to develop leads through pre-sales work and round out their offering with a range of post-sales services.

Almost every proponent of value added security distribution in the Middle East is adamant that the revenue and margins gained from their approach far outweigh those garnered from butting boxes around in a broadline distribution fashion.

But regardless of whichever model distribution bosses follow, the business is not without challenges that have to be deconstructed in order to achieve the rich rewards available.

These include finding the staff with unique skills to service the security channel, maintaining commitment and loyalty from resellers in a competitive market, and convincing vendors to invest in educating end-users and working with governments to implement security standards.

Thus, there's a serious workload that security distributors must absorb in addition to their traditional responsibilities. Here the region's top security distribution players explain why the hard work pays off and give their verdict on what action must be taken to drive channel growth. Computerlinks

"If the IT industry equates to 100%, security distribution is 2% and security VAD is 1%," asserted Lee Reynolds, managing director for Middle East and Asia at Computerlinks. Despite this seemingly low percentage, Reynolds is effusive about the importance of distributors that specialise solely in security.

"A lot of people think they can offer security but they can't," he argued. "The route of the normal distributor is territory managers with multiple products selling into many markets. We have product specialists and systems engineers behind them. There is the continuation of one guy selling a product to one channel and we add value and services around that," he explained.

In addition to specialisation, Computerlinks regards training as the road to security distribution nirvana.

Training must be inclusive of the reseller network, end-users and indeed its own staff - a resource that Reynolds views as the most important to a distribution business, even though talent can often be hard to come by. A challenge also comes in the form of convincing resellers that security is a strong enough niche to embrace.

"If you take Emirates Computers' top 20 customers, are they selling security into those top 20? Absolutely not. They are interested, but they are more focused on selling US$20m worth of Cisco than security because it is niche," declared Reynolds.

What trends will shape the Middle East security distribution channel during the course of the next year?

Integration and consolidation of technology and vendors, that is the main point. I predicted Websense and SurfControl, but I don't know what will be next.

Obviously I know the roadmaps of the vendors. I can't reveal those, but there are some significant technological mergers around the corner next year. What should security vendors be doing to improve their Middle East prospects in the future?

Consolidation and more end-user education. In the security space I think we carry maybe 90% of the vendors. I think channel recruitment and channel partnerships are key for all of these vendors in the Middle East.

And the specialisation in each of the countries in their partner structure is very important to them. For vendors we are everything that they miss and everything that a local distributor cannot offer them.

What are your top tips for resellers selling security products?

Sell more. It's as simple as that. Sell more and make more margin! Secureway

The statistics speak for themselves, according to Secureway's managing director Zafar Shabdiz: "IDC forecasts suggest that this market is going to expand at a compound growth rate of 25% over the next five years."

As well as spying considerable potential, Shabdiz points to a shift in the security channel's dynamics and says vendors now regard VADs as co-managers of their extended channel.

The current position is in contrast to the distributor's prior role as a wholesaler and where the vendor used to own the channel relationship.

"This position is in contrast to the distributor's prior role as a wholesaler of products and where the vendor used to own the channel relationship," reflected Shabdiz.

Consequently, VADs in the security domain must be on top of their game and this, insists Secureway, is ensured in a variety of ways. Firstly, it says it pays to keep a keen eye trained on technology leaders in the security market and not to rule out smaller players as part of a varied portfolio.

Secureway claims that both vendor and reseller partners can look to make use of its "demand generation foundation", while it also remains the responsibility of security VADs to work with resellers to craft multi-vendor offerings.

What trends will shape the Middle East security distribution channel during the course of the next year?

Mergers and acquisitions will play a big role. A few large companies will try to snap up specialist market niche leaders to round out their portfolios. How smartly they manage these acquisitions is the question.

They have the power to either develop or kill the newly acquired company by enforcing their traditional non-fit channel strategies on them.

What are your top tips for resellers selling security products?

Get a product manager on board who is there to listen, learn and present the best solutions internally. IT security products are resource-hungry and resellers need to offer management support for their new vendor partnership investment initiatives.

A focused product manager is the enabler of the requirements of the vendor and end-user. FVC

For FVC the proverbial key to city in security distribution is devoting time and money to education. Networking unit manager Guru Prasad can not emphasise this enough, explaining that FVC works hard to educate reseller partners and end-users.

Teaching integrators comes in the form of a host of certifications. "Within what we call industry initiatives we educate partners with ITIL and ITIL Express workshops to prep them and give them a real taste of what they can offer going forward," said Prasad.

Training is also an internal priority at FVC - which says 80% of its business is security- focused - with staff undergoing CISSP programmes and the like on a regular basis.

The subject of resources cannot be broached without paying concession to the current regional staff shortage, a pain felt by FVC and indeed its industry counterparts.

"It is one of the key challenges security distributors face, finding the right people. What we, and I'm sure other distributors have been doing, is to build resources from the ground up," he explained.

FVC harbours major plans to expand into the storage security market through new signings, but says that, in general, vendors could still do a lot more to drive security adoption in the region.

"Vendors need to engage more with governments to drive regulation. That is something the larger vendors tend to do but core security vendors focusing on specific security areas don't take as seriously," asserted Prasad.

What trends will shape the Middle East security distribution channel during the course of the next year?

I see three systems integrators currently setting up their own security practices and this trend will continue. It is no longer going to be acceptable for channel partners to go in there and sell security as part of their infrastructure offering. You will see more investment in specialist resources and certified resources from the channel.

What are your top tips for resellers selling security products?

Separate infrastructure business from security. These are two distinct and sizable opportunities. IDC says the security market alone is worth US$275m in the GCC. Invest in a security practice head at least and focus on security teams in end-customers rather than IT heads. Comguard

The region is likely to see an influx of global security vendors and niche providers in the future, coupled with continued consolidation among vendors. That is if Ajay Chauhan, CEO at Comguard-owned Spectrum, is to be believed. He is not alone in this assertion as other distributors also predict that market entry and consolidation will continue to mould the regional security channel landscape.

This interjection of vendor attention is welcomed by Comguard.

"There is huge room for growth," professed Chauhan. "People have now at least understood security is a key component in budgeting and that something has to be done at a desktop level, such as antivirus, gateways and firewalls. However, hackers are getting more intelligent and it can be difficult for enterprises to understand this."

Even with the growth potential of security, Chauhan says competition among distributors is rife because security has become a lucrative avenue to pursue.

"We thought it was apt to get into this space, but I think we entered into an area that is particularly overcrowded. There are many companies focused on security as a business because the proposition is compelling," said Chauhan.

And how do you fight for space in a populated market? "We create opportunities for our channel and go into new areas of lead creation while with broadline distribution the opportunity is already there and it is just a question of logistics and delivery," answered Chauhan. "We keep offering solid knowledge and that is the main reason we are different."

What trends will shape the Middle East security distribution channel during the course of the next year?

Distributors will keep investing more in education and making sure the channel has the right skills to understand the needs of the market. This has been more vendor-driven, but distribution will start taking an interest because as the revenues grow they will have a circle of cash to invest in those things.

What should security vendors be doing to improve their Middle East prospects in the future?

Open their offices in more areas because most of these vendors are still working through distributors. They have to open offices and invest more in their own resources, rather than just the distributor's resources.

They also have to meet with customers on a one to one basis. If they do I am sure that they will change the whole channel view. Aptec

Aptec takes a dual approach to distribution by operating a broadline business and an established value division.

It is the value added distribution that Bahaa Salah, managing director at Aptec, admits is the most rewarding when it comes to security: "Value added distribution includes security, storage solutions and service solutions, and it is essential for us to invest more time, effort and money into this because the return on investment is very much recognised and better than the other part of our business."

Aptec - which works with vendors such as Cisco, McAfee, ISS and Symantec - insists investment must be forthcoming if the security market in the Middle East is to realise its full potential.

"One thing we need to understand in this region is that there is a whole lot of investment that should be made into security because the market is still behind Europe and the US in terms of proper security structure," explained Salah.

While this investment must largely come from vendors, Salah feels resellers can do more to drive secure solutions with end-users. For Aptec, taking a hands-on approach has become an essential aspect of being a VAD.

The company's enterprise arm, ATS, employs specialists that focus entirely on post-sales service, which in addition to pre-sales carried out by Aptec is the make-up required to answer the sophisticated demands of the discerning Middle East enterprise end-user.

What trends will shape the Middle East security distribution channel during the course of the next year?

People will offer more time and effort and resources because it's one of the growing areas of value added distribution. There will be more niche distibutors that will divide up the market into normal and niche areas of security. The number of distributors overall will increase.

What are your top tips for resellers selling security products?

To focus more. Some of the resellers would really do well to develop more of a niche and some of them need to invest as much as possible in resources that will then allow them to offer the right kind of solutions.

If they put in the right amount of time and effort, and have a good focus, then working in the security market will definitely pay off in the long run.

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