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Channel explainer: How focusing on data will drive sales
Security and storage have always been profitable areas for the channel, and both will continue to deliver for various reasons as the year progresses
Two of the longest-standing areas of the market and two of the most consistent for generating revenues have been security and storage. Both continue to drive customer spending, and both are going to enjoy a strong fourth quarter.
But just being able to provide security and storage is not enough, and more success is likely to come from understanding the pressures customers are under and how the changing market dynamics, particularly the impact of artificial intelligence (AI), are making life even more challenging for users.
Numerous pieces of research have indicated that customers are still being targeted and data breaches are rising year-on-year. No one is now exempt, with businesses of all sizes and across all sectors being targeted. Recent attacks on the NHS have underlined that nothing is off limits, and the motivation is for maximum impact and usually a hefty ransom.
For the channel, the wave of research can be almost overwhelming, but the key themes are that the majority of users have been attacked, most are struggling with a lack of skilled staff to fend them off and many fear that the arrival of AI will make everything harder.
In amongst that, it has also become clear that the channel, particularly managed service providers (MSPs), are being leaned on more heavily and expected to carry much more of the security load.
“The biggest shift over the past few years has been the evolution from simple transactions to establishing long-term relationships with trusted service providers,” said Natalie Billingham, senior vice-president of sales and channels, and managing director for EMEA at Akamai Technologies. “Channel sales leaders who possess regional market knowledge and a deep understanding of new legislation play a vital role in driving the company’s continued sales growth – especially in an uncertain macroeconomic context.
“From a security perspective, the emergence of AI-powered cyber attacks means that businesses of all sizes, including resellers and MSPs themselves, risk more frequent and sophisticated breaches than ever before,” she added. “In fact, Gartner predicts 45% of organisations worldwide will experience attacks on their software supply chains by 2025. Organisations are also facing growing risks from bad bots, and being used for competitive intelligence gathering and inventory hoarding. Recent Akamai research found that bots compose 42% of overall web traffic, with 65% being malicious.”
Handling security
Not only are customers expecting more support, but they are looking to the channel to be able to handle security full stop. Users are looking for a supplier to be able to protect data, so the pressure is on everyone to either develop those skills or partner to cover that area.
Recent research from CyberSmart underlined how the channel was now being expected to deliver security, with Jamie Akhtar, co-founder and CEO of the firm, talking of a need for MSPs to fundamentally change how they operate.
“Managed service providers are a lifeline for many SMEs [small and medium-sized enterprises], and the under-appreciated backbone of much of our economy’s IT infrastructure as such,” he said. “As IT and cyber security threats become increasingly intertwined, it makes sense that managed service providers would begin to offer more security services.”
As a result of those changing expectations and increased demand, the rest of this year should be a positive one for those able to meet them. Billingham is expecting demand in Q4 to continue to be strong, giving the channel revenue opportunities to help close out the year strongly.
“Based on my current conversations with customers, the demand for robust cyber security solutions is at an all-time high, as organisations look to draw on the expertise of their channel partners to support in-house security operations,” she said. “This presents an opportunity for channel partners to position themselves as essential allies in protecting clients’ digital assets, offering services such as threat intelligence, incident response and managed security services.”
How is increased compliance legislation driving sales?
Compliance is always a driver of investment, and over the years, the European Union (EU) has been a generator of a fair amount of legislation. For anyone looking to support customers across Europe, and demonstrate knowledge of the latest requirements, there are further reasons to feel good about Q4.
The next piece of compliance legislation that will dominate conversations in the coming months is NIS2. From fairly early on at the start of the year, the channel was being encouraged to get on top of the rules that require businesses and organisations to take a zero-trust approach to security.
Daniel Hurel, vice-president of cyber security and next-gen solutions for EMEA at Westcon-Comstor, was among those advising partners to get on top of the legislation and get into a position where they could support customers.
“From education and enablement to managed services, partners have an opportunity to add value by serving as a trusted adviser to their customers and demonstrating expertise,” he said. “First, however, partners are quite rightly seeking to build their own understanding so they can seize the NIS2 opportunity equipped with the information they need.”
Others in the industry have also spotted an opportunity in the next few weeks and months for partners to benefit from the introduction of fresh compliance rules.
“Partners can also help their customers navigate and understand the EU’s NIS2 security directive and achieve readiness ahead of its implementation in October,” said Akamai’s Billingham. “Tapping into the directive’s need for businesses and organisations to take a zero-trust approach to security is a revenue opportunity for the channel, as it helps customers reduce their compliance time by using fewer resources to achieve robust security across expanded networks and supply chains. There’s also significant scope for them to support customers with compliance requirements for DORA and CSRD.”
Trusted advisors
It all means that those able to get on top of the various requirements and demonstrate their ability as “trusted advisors” will find themselves in demand in Q4.
“Vendors are relying on partners more than ever to take them to their next stage of growth,” said Karin Pike, director of regional partners for Northern Europe at Okta. “Building a partner ecosystem around the core brand and product set is essential going into the latter half of the year as customers in EMEA prefer a few trusted partners over numerous vendors.
“Given the size of the region as we move into H2 and the end of FY25, vendors will increasingly depend on partners to ensure that technology is faster, more efficient and reaches everyone.”
She added that the introduction of more legislation, in the light of recent elections across Europe, would mean an increasing number of customers would be looking for support from partners.
“With the proceeding changes in leadership, we are going to see AI and cyber security regulation put back under the spotlight with renewed energy,” said Pike. “This creates both complexity and opportunity in the channel as partners look to balance a growing demand with increased regulatory scrutiny.”
How is AI benefitting storage players?
The flip side of protecting data is generating and storing it. On that side of the market, the year so far has been an interesting one, with those able to help deliver strong data management tools seen as the first port of call on the journey to an AI strategy.
Those in the storage market have found themselves at the heart of the AI story, with data crucial to providing useful insights for customers. Those delivering management tools are well positioned to take advantage of increasing demand in Q4.
Earlier this summer, Chris Shaw, UK channel manager at AvePoint, said more use cases for AI were emerging, and that Microsoft was driving the market forward with Copilot. But there was a danger that just dropping in tools and waiting for inspirational results will put the MSP in a position where the odds are stacked against it.
“If you look at it from an end user’s perspective, there are four or five stages you can take us to,” he said. “The first one is getting the data into the right place, whether that’s coming out of legacy systems or whether that’s coming from multiple platforms. You migrate the data, and from there, you can then apply security, governance and control, and that’s where our AI data security piece starts to fall in and become very valuable.
“Everything that AI does is actually based on data. So, if your data is not controlled, if your data is not secure, if your data is not in a usable format, it actually gives you really poor results. And that’s actually what I think is holding a lot of people back.”
Andrew Palmer, UK channel lead for enterprise data and cloud solutions group Seagate Technology, agreed that AI was having a significant impact on storage from both the need to contain more data as well as the desire for insights.
“The surge in AI adoption has led to an exponential increase in data demand,” he said. “As AI models become more sophisticated, they require vast amounts of training data. Simultaneously, AI has become a source of content creation. When it scales, unprecedented data volumes are needed. The value of data has never been higher.
“Over the next six months, channel partners will face the challenge of helping their customers manage this data explosion. The sheer volume of data necessitates robust storage solutions. The cloud has been the epicentre of AI progress; however, the rise of real-time and hyper-personalised use cases is also pulling AI applications and services to edge and on-premise storage locations.”
How are the demands changing?
Not only is data exploding, but it requires systems that are also fairly challenging to use, and that again provides those with the skills with a chance to make a difference over the course of Q4 and into 2025.
“Managing high-capacity storage systems is complex,” said Palmer. “Few vendors and customers are equipped to optimise storage infrastructure for AI workloads. As the capacity of drives becomes larger, effectively deploying them will be a core challenge. Channel partners can bridge this gap by offering specialised services, including storage architecture design with data protection that can be stored at massive scale.”
Even when the channel is working with a customer that has not yet embraced AI, there are still storage challenges because the fear of missing out on future insights is already impacting behaviour,” he said. “Businesses are storing data in anticipation of AI, often on cloud services, which are very expensive.”
Whether it’s protecting it with security tools or helping manage it and get it prepared to be mined by AI insight tools, the importance of data has never been greater. For the channel, the key is that the next few months and beyond are set to be buoyed by sales and services in all areas connected with defending and analysing information.
