Heightened Threat Levels Drive Cybersecurity Spending to $19 billion in Q2
Investment in cyber-resilience remained a top priority for organizations in Q2 2023, according to market research by Canalys. Overall, the worldwide cybersecurity technology market grew 11.6% year on year to US$19.0 billion, according to the company, despite ongoing macroeconomic uncertainty and constrained IT budgets.
“Threat levels are at unprecedented heights, with the number of publicly reported ransomware attacks up by more than 50% and breached data records more than doubling in the first eight months of this year,” said Matthew Ball, Chief Analyst at Canalys. “At current rates, 2023 will be the worst year on record, far exceeding 2021 levels, when ransomware came to the forefront after a series of high-profile events,”
In Q2 2023, total cybersecurity technology spending through the channel accounted for 91.5%, up from 90.5% in the same quarter a year ago.
“Discovering vulnerabilities and establishing asset inventories, as well as categorizing them based on the level of risk, is critical to prioritize investment in protection. This is also an important foundation for partners in creating remediation plans for customers when attacks take place,” added Ball. “The cybersecurity services opportunity for partners will be larger than selling cybersecurity technology this year, with spending forecast to grow 13.2% to US$143.2 billion in 2023. Managed security services and integration services will be the fastest growing areas.”
On a regional basis, spending remained resilient in North America (+12.6%), EMEA (+11.1%) and Latin America (+13.4%). But growth rates slowed in Asia Pacific (+8.8%), as organizations scaled back their spending.
The top 12 vendors accounted for nearly half of this spending. Leading the market in Q2, Palo Alto Networks grew 25.4%, fueled by demand for SASE, SecOps and cloud security. Fortinet ranked second. Cisco accounted for 6.1% of total spending, down from 6.7% last year. CrowdStrike, Check Point, Okta and Microsoft rounded out the top seven.
More than ever, customers need channel partners with cybersecurity expertise to help build cyber-resilience.
Westcon-Comstor Posts Record First-Half Revenue of $1.85 Billion
Westcon-Comstor, a global technology provider and specialist distributor, posted a 14.9% year-on-year increase in first-half revenue to a company record US $1.85 billion. Westcon-Comstor reported double-digit revenue growth for the six months to 31 August 2023 across each of its three operating regions: Europe, Asia-Pacific (APAC) and the Middle East and Africa (MEA).
Gross profit saw a 33.4% year-on-year jump to US $203.7 million with gross margins increasing to 11% due largely to more stable foreign exchange rates compared to H1 FY23. EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by 15.9% to US $59.7 million.
Cybersecurity and networking accounted for 90% of Westcon-Comstor’s revenue during the half-year period, with strong growth in sales across the specialized portfolio for the selected markets in which the company operates.
Westcon-Comstor’s H1 FY24 results also highlight its ongoing shift to software and services-based revenues, which saw a 17% year-on-year increase and now account for 45% of the company’s total revenue.
“We’re excited to report an excellent financial performance for H1 FY24 as we maintain our growth trajectory across all regions and accelerate our transformation into the world’s leading data-driven technology provider and specialist distributor of cybersecurity and networking solutions,” said CEO David Grant. “Looking ahead, our shift to software and services means we are ideally placed to thrive in the subscription-based, everything-as-a-service (XaaS) platform economy of the future.”
The data represent good news for two-tiered distribution as the market continues its evolution toward software and services.
Radware Launches Enhanced Program for Managed Security Service Providers
Radware, a New Jersey-based provider of cyber security and application delivery solutions, has announced enhancements to its Cybersecurity Partner Program with an expanded offering for Managed Security Service Providers (MSSPs). Under the revised program, partners will have access to new licensing models, expanded technical training, and more marketing and sales enablement tools.
“The updated program is designed to put a portfolio of high margin, state-of-the-art application and DDoS protection and web application firewall services into the hands of MSSPs that want to build predictable, new revenue streams while helping customers defend against more frequent and sophisticated cyberattacks,” said Yoav Gazelle, Radware’s chief business officer. “The program is built on low cost of entry, easy deployment and integration, and more flexible licensing models.”
Through the global program, MSSPs can white label or resell Radware’s suite of integrated application and network security solutions, including DDoS mitigation, application and API protection, a web application firewall, and bot detection and management.
Pay-as-you-go, subscription-based pricing, and service-based licensing have been added as well as an expanded portfolio of partner enablement and marketing support tools and enhanced training resources. The overall proposition also includes expanded sales and technical support, real-time threat intelligence, a unified management platform, plus automation and orchestration capabilities.
The refreshed program is intended to make it easier for MSSPs to expand their value-added service portfolio and manage the hosted security services needed to address the surge in cyberattacks and shortage in skilled cybersecurity talent.