Harpreet Bhatia, Director, Channels & Strategic Alliances – India & SAARC, Palo Alto Networks, shares the company’s channel strategies for 2019
Key highlights 2018 and opportunities for 2019
2018 was a volatile year for the channel industry in India. Repercussions of GST continued to affect the business throughout. The industry witnessed considerable transformation as well, by expanding its horizons to sustain itself. With 2019, we expect various changes to take place within the channel partner ecosystem with more of them focusing on the services component of their business. Many of them will expand their services practices, adding new types of cybersecurity consultative implementation, customisation and optimisation services.There will be a rapid expansion into managed cloud and security services as well as an emergence of managed detection and response (MDR) services. 2019 promises vast services opportunities that offer significant profitability gains for channel partners.
According to Gartner, Software-as-a-service (SaaS) shows the most significant growth among software segments projected at more than 22 per cent in 2019 compared to six per cent for all other forms of software. In 2018, the average enterprise used 16 SaaS applications in their daily business. This will continue to increase exponentially.
Top tech trends for channel community
This year expect to see the channel community betting big on cloud services and realigning its key partners for opportunities. Here are some technology trends that organisations should look forward to in 2019.
Expansion of security services led practices: 2019 will witness more channel partners focusing on the services component of the business. While some will strengthen existing services practices, others will expand upon their services practices, adding new types of cybersecurity consultative, implementation, customisation and optimisation services.
Offering more services translates to greater profitability for channel partners, and there is a higher demand for services than ever before. Several factors contribute to this growing need for cybersecurity services, including:
- Cloud adoption: Simply put, cloud adoption increases the risk of cyber attacks. Within a cloud or hybrid cloud environment, data is distributed across many locations within the network. All too often, IT teams lose visibility into their assets and the traffic flowing among them. This creates inconsistent security policies and unknown vulnerabilities, leaving many organisations prime targets for an attack. Organisations need help securing every access point across the entire network.
- IT talent shortage: The shortage of IT talent compounds the challenges introduced by cloud adoption. The demand has reached a new high. Globally, according to Cybersecurity Ventures, the projected demand will increase exponentially, with 3.5 million cybersecurity jobs needing to be filled by 2021. India is no different, our customers and our partners are facing a shortage of trained security manpower.
- Compliance and regulations: Obtaining a good compliance posture can be difficult to achieve and undoubtedly complex when deciphering the various guidelines that differ based on local, national, or industry origin. Maintaining a good compliance posture becomes an even greater struggle as rules and regulations change and update quickly. Indian organisations, while doing business globally, have to make sure that they adhere to global as well as local transacting country compliance norms, hence they need to have visibility of their current status versus what is required to be fully compliant.
- Increase in managed security services providers (MSSPs): Partners around the world are augmenting their businesses with managed services. There is a rapid expansion into managed cloud and security services plus an emergence of managed detection and response (MDR) services, an approach to identify a breach and manage an incident through remediation. According to Gartner, “By 2021, at least half of small and midsize enterprises will use managed services to secure their infrastructure, up from less than 20 per cent in 2018.” Factors driving adoption for managed security services, a few already explained above, include the growing complexity of enterprise IT infrastructure, IoT, cloud and multi-cloud, the shortage of security talent, continuously evolving, and the opex benefit. Organisations would need MSSPs to help them rapidly ramp up and scale their cloud environment while deploying security measures specifically designed to reduce the attack surface and secure critical applications and workloads. MSSPs that adapt to the new dynamics and offer a full cycle of security services have vast opportunities in front of them and stand to gain a significant competitive advantage.
- Changing consumption habits: The prolific preference for cloud and SaaS has created a shift in customer consumption habits for ‘everything-as-a-service’. Organisations have widely accepted the simple, easy-to-consume experience of SaaS and it has fundamentally changed their expectations for procuring and licensing software. Enterprises are shifting to pay-for-use models that offer flexibility and speed to add or reduce capacity. SaaS cybersecurity offerings provide customers the ease and speed they have become accustomed to. And it allows vendors to automatically deploy updates and patches to protect against newly detected vulnerabilities.
Channel directions for partners
At Palo Alto Networks we believe in scaling the Indian channel ecosystem and help them become more profitable. Our channel program offers renewal protection, rebates and incentives especially for partners who are technically sound to support and service our customers as well.
The industry, once dominated by hardware products, is taken over by software offerings today. At Palo Alto Networks, subscriptions and services make up 60 per cent of our business, and it is growing twice as fast as our hardware business.
Software-as-a-service (SaaS) shows the most significant growth among software segments. This has created a shift in customer consumption habits for everything-as-a-service. Organisations have easy-to-consume experience of SaaS and it has fundamentally changed their expectations for licensing and procuring software. Enterprises are shifting to pay-for-use models that offer flexibility.
Our mutual customers are increasingly comfortable consuming mission-critical, cybersecurity SaaS offerings. It meets their preferences and brings many advantages in maintaining a strong security posture. SaaS cybersecurity offerings give customers the ease and speed they have become accustomed to. And it allows vendors to automatically deploy updates and patches to protect against newly detected vulnerabilities.
As consumption habits
change, our partners have a major role to play based on the expansion of security services and an increase in managed security services providers.
Our mutual customers have an ever-expanding need for partner services to successfully integrate cybersecurity offerings into a hybrid infrastructure, optimise security features, and secure the network from end-point to the cloud. Palo Alto Networks relies on our NextWave partners to serve this need and touch our more than 1100 customers in India.
With our cloud providers, we are building a new pool of born on cloud set of partners.
Channels are critical to us in terms of market coverage. Hence, we align with large loyal partners with a local presence through a two-tier model. The optimised channel strategy then spans across the ecosystem of distributors, systems integrators, service providers and small resellers. Partners should start embracing cloud security and understand the framework, as the network side of the business will not be seeing much of growth. But both endpoint and cloud will be the main run rate business for the channel.