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Exclusive: IDC NZ tells how you can win in the growth security services market

27 Jul 16

Vertical industry knowledge is more crucial than security expertise for resellers wanting to tap into New Zealand’s burgeoning security services market which is expected to top $312 million by 2019.

Donnie Krassiyenko, IDC New Zealand IT services and security market analyst, says the ability for resellers to demonstrate knowledge of an end-user’s industry will predispose end-users for open engagement.

“In fact, industry expertise is valued more than security expertise,” he says.

IDC New Zealand has forecast the New Zealand security services market to hit $312.9 million by 2019, with a 12.2% compound annual growth rate. That growth makes security one of the fastest growing services in the country, alongside hosted and managed services.

But resellers looking to capitalise on that growth will need to fully understand the variations between verticals, with the vertical of the end user affecting both their desired business outcomes and their industry threat profile.

“For example, since the greatest industry risk in banking, financial services and insurance is financial loss, data loss is perceived as the biggest threat, while exposure of retail/wholesale to reputational loss inclines this sector to address denial of services attacks before anything,” Krassiyenko says.

He says the importance of security in New Zealand has risen ‘multifold’ over the last year, with security a top five focus area on any given IT investment agenda, alongside technologies like cloud and mobility.

“However, security is not pursued as a business outcome, it is rather a hygiene requirement for an external IT provider – end-users clearly articulated that vendors and service providers must take care of all security needs for all procured products and services,” he says.

“The key to note is that security expertise is not a differentiation criterion it is simply a must-have attribute of an IT partner in the same way as it is expected from a restaurant to have bathroom facilities.

“In reality factors affecting selection of ICT provider remain fairly distant from security expertise. Instead, companies are looking for value-adding attributes that technology providers can offer, such as service management and flexibility to accommodate custom requirements. Nevertheless, pretty much all conversation in the industry start with security. So in a way, security can act as a gateway topic for further negotiations.”

Krassiyenko says a ‘consulting-based style of conversation’ is also crucial for resellers wanting to maximise their opportunities and make the best of both vertical and security expertise.

“Companies do not invest into security to generate revenue nor for any other business-related outcome,” he notes. “The key driver is to improve or update security of their ICT systems – in other words, to make sure the organisation is safe and the risk is minimised.

He advocates turning the security topic into a risk mitigation exercise to gain traction from the end-user and says using the business language of the vertical, rather than talking tech, is needed.

He notes the profile of the IT decision maker has also changed, with increasing numbers of line of business and CxOs now involved with IT investment, rather than just CIOs and CFOs.

“Thus a consulting-led conversation is an opportunity for a vendor to establish rapport with for example, a CMO, understand its business and vertical challenges and offer a security solution that would address those issues in a business manner,” Krassiyenko says.

“A consultancy-led approach of engagement is critical for all parties.

“End-users are willing to have an open partnership with an IT service provider (ITSP) who is willing to adapt to the changing requirements, and yet help the end-user to mature at the same time.

“In order to deliver business value in such circumstances, ITSPs need to engage with the end-user via a continuous dialogue, focusing on helping New Zealand companies to succeed by providing independent professional services,” he says.

“The key point is to have a genuine focus based on end-user's current business and future needs, building together a roadmap to increase customer's maturity and stage-by-stage adaptation of the XaaS consumption model aiming at a smooth and painless transition from capex to opex."

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