Always a highly profitable market for VARs, network security looks set to remain that way as market data and trends indicate good times ahead for selling network security solutions.

The worldwide network security market grew 10 percent year-over-year, from the first quarter of 2009 to the first quarter of this year according to data released last June by Infonetics Research. The firm forecasts the content security appliance and software market will hit $3.8 billion in 2014.

IDC's security products research team believes key market drivers in 2010 will focus on the inter-related issue technologies of software-as-a-service (SaaS), cloud computing, virtualization and mobility.

IDC also believes organizations must have a data protection security program that includes encryption to maintain the integrity of their proprietary data; to safeguard information entrusted to them; and to remain compliant with company, industry, and government policies and regulations. The firm estimates that the endpoint encryption market will reach $1 billion by 2014.

"The need for companies to protect their networks and the data inside them is becoming more important every day, so understanding the solutions and opportunities around network security is crucial for VARs," says Tech Data Vice President of Networking Product Marketing John O'Shea. "That's why
Tech Data established our Network Security Specialized Business Unit (SBU) earlier this year."

In just a few months, the SBU has partnered with dozens of leading security vendors to provide resellers with an extensive solutions portfolio backed by the expert, dedicated support they need to conquer the network security market.

SMBs Rely On Their VARs

"Small and medium businesses (SMBs) are most vulnerable to network intrusions, and they rely on resellers to educate them about how to protect their data," says O'Shea.

The SMB market presents VARs with many lucrative sales opportunities-not just to sell products but to wrap add-on services around the initial sale, he adds.

"For many SMBs, an all-in-one security appliance is the answer to their security needs as it offers excellent protection, requires little or no user technical expertise and leaves maintenance to VARs," O'Shea says.

Vertical Markets, Web Apps And Mobility

Network security also is a strong vertical play, says Tech Data Marketing Manager Calista Wetherbee, who oversees the Network Security SBU.

"We see the strongest opportunities for VARs in banking and finance, education, the federal government, healthcare and retail," she says. (See sidebar on page 14.)

Leading vendors agree with Wetherbee's assessment of the vertical market opportunities for network security solutions.

"SonicWALL's Unified Threat Management (UTM) solutions are selling well in key verticals, notably healthcare, education and the government sector," says John Keenan, vice president of distribution for the Americas at SonicWALL.

Juliette Sultan, head of marketing at Check Point Software Technologies, stresses that Data Loss Prevention (DLP) should be top of mind for businesses or institutions in any heavily regulated industry.

"Check Point has focused on simplifying solutions with pre-configured DLP technologies that meet regulatory requirements without disrupting the flow of business," she says.

Companies of all sizes need to provide secure network access to employees, customers and partners, no matter where the parties are, says Keenan.

"This need is exacerbated by the increasing use of Web-based applications by businesses and consumers," he adds. "Web-based attacks are rising at an alarming rate as the Web becomes a major threat vector for hackers and criminals."

Keenan believes that anything to do with Web 2.0 creates tremendous strains on an organization's ability to protect its network. And, he notes, the strains multiply due to the widespread use of virtualization and mobile devices.

"Securing the data of mobile users and the networks they connect to is a big part of our business right now," says Jim Ouellette, owner of Hyphenet, a San Diego-based VAR. "Many customers want us to protect their entire wireless infrastructure as well as their data, so we're selling and installing lots of appliances and data encryption solutions."

Managed Security Services

According to SonicWALL's Keenan, "More and more SMBs choose VARs to help them conquer the chaos of security. Many choose managed security or SaaS because it gives them a reliable, outsourced solution at a fixed monthly fee."

Keenan says managed services are a great business for partners, because they enable VARs to consolidate their line cards, provide management tools to their customers and generate recurring monthly revenue.

By using SonicWALL's Global Management System (GMS), a VAR can manage thousands of customer sites from a centralized location and provide a full range of network security solutions, including SonicWALL's line of Internet security appliances, wireless products, intrusion prevention and gateway antivirus.

Fortinet is another vendor seeing major action in managed security services. According to Fortinet, the main benefits of their UTM solutions are the company's consolidated approach to network security and the FortiGuard Labs security subscription services. Instead of having to deal with multiple vendors for multiple security functionalities, managed security service providers (MSSPs) can rely on Fortinet for consolidated firewall, VPN, IPS, Web content filtering, anti-spam and antivirus solutions.

"This allows MSSPs to be more efficient and to see immediate ROI with reduced maintenance costs and reduced manpower costs associated with managing large and distributed networks," says Kendra Krause, vice president of channel sales at Fortinet.

She adds, "It doesn't matter what size an enterprise is. Everyone faces similar security challenges."

Those challenges include regulatory compliance and increasingly complex threats that are coming in through multiple avenues such as social media, SaaS and even audio/video applications.

"A next-generation firewall is not enough to protect network environments today," says David Dadian, CEO of powersolution.com, a VAR based in Ho-Ho-Kus, NJ. "We deploy UTMs because they deliver high-performance firewall, data loss protection and antivirus."

Dadian adds that UTMs enable his company to quickly provide additional services, such as anti-malware, anti-spam, intrusion prevention, WAN optimization, SSL content inspection and endpoint control without having to purchase solutions from multiple vendors.

"Another trend we're seeing is businesses making a transition to the cloud are looking for ways to move from an upfront capital expenditure intensive model to a more manageable operating expenses-based ‘pay-as-you-grow' model," he adds.

The explosive growth of cloud computing and its security challenges give VARs new opportunities to sell cloud security services. A 2009 Forrester research report found that one of the fastest growing segments in the market is managed security services, which, at 16 percent, has one of the highest compound annual growth rates.

A February 2009 Frost & Sullivan report predicted that managed security services will grow to a $2.2 billion business by 2015, up from $1.2 billion in 2009.

Frost & Sullivan attributes the market's growth to several factors: MSSPs focusing on driving business after considerable industry-wide consolidations, increased security efforts in key vertical markets and a slew of compliance issues forcing companies to tighten security processes.

From Prevention To Detection

An IDC study found that 15.5 percent of organizations have specific plans to purchase DLP technologies.

Check Point has developed new DLP solutions that provide greater levels of proactive protection to users. For example, Check Point technology can block an e-mail containing sensitive financial information to an external recipient, alert the user of the potential breach in realtime and ask the user to remediate the issue with options to discard the e-mail, send it if it is a valid communication-i.e., to an external auditor-or review it to understand why the alert was generated.

"Network security is a market full of innovation, and we continue to focus on delivering simpler security solutions to combat the evolving needs of the marketplace," Check Point's Sultan adds.

Navigating Network Security

"Network security can be intimidating to VARs, but it's an opportunity they shouldn't shy away from," says Mike Goodell, a senior product sales champion with the Network Security SBU. "A comprehensive network security solution provides tremendous value to end users, and that equates to lucrative revenue opportunities for VARs."

Goodell adds that while the threat landscape is constantly shifting and evolving with new technologies and more sophisticated attacks, leading vendors like Check Point, Fortinet and SonicWALL are keeping up with innovative new solutions.

"Backed by Tech Data's Network Security SBU and our industry-leading vendor partners, VARs can confidently deploy these solutions and profitably capitalize on the demand for network security," Goodell says.