Security Channel May Be Heading for a Contraction

A few years back there was a mass migration in the channel to security technology as solution providers, driven by a hunger for more profitability, looked for new areas where they could find higher margins.

Most were responding to the fact that the number of solution providers selling network infrastructure had ballooned so much that it was hard to make a living, and customers were spending an increasingly larger percentage of their IT budgets on security.

What drove a lot of this customer spending was an existing network infrastructure that was unable to stand up to the performance requirements of security. This, as a result, gave rise to a whole class of security appliances that within the industry were referred to as "router helpers."

From the perspective of Cisco Systems and Juniper Networks, the vendors that make security appliances are little more than interlopers camped in their back yards. For years these networking companies have worked to create routers and switches that would include enough raw horsepower to allow them to embed all the required security functionality into the router.

Now both Cisco and Juniper are finally close enough on a technology level to make the case that there is a greatly reduced need for security appliances, if only customers would upgrade their routers and switches.

And unfortunately for some solution providers, customers are increasingly interested in hearing about lower cost approaches to managing security. As the economy continues to slow, IT organizations want to figure out how to reduce the cost of managing their security infrastructure.

A lot of that cost is tied up in managing all the various security appliances that now run at the edge of their networks. If they can reduce the number of devices needed, it then follows that they can reduce the number of vendors they need to do business with and the number of people they need to manage those devices.

None of this is lost on Cisco and Juniper. They are both now stepping up their efforts to woo security solution providers back into their folds. The only real question is which of these two vendors is most likely to succeed. Clearly Cisco has the advantage when it comes to market size and depth of channel commitment. But Juniper should not be so easily dismissed.

The fact of the matter is that a lot of security solution providers have already voted with their feet to sell something other than Cisco products. When it comes to deciding between Cisco and Juniper, a lot of these solution providers are likely to think that there is more opportunity to sell Juniper because there are simply a lot fewer solution providers selling Juniper.

Juniper is pretty much running the same game plan in the channel as it tries to roll up all the partners selling switches other than Cisco. The core idea is to give solution providers an alternative end-to-end approach of selling network and security infrastructure. To back that up, Juniper has created a value-based program where it deliberately limits the number of partners allowed to sell its products, which stands in stark contrast to Cisco’s approach to channel.

It’ll still take a number of years for this reverse migration scenario to play out across the channel. But as the economy continues to slow chances are that Cisco and Juniper are going to gain a lot more traction in the security space. And we all know the solution provider that spies the market shift first is usually the one that benefits most.