September 20, 2019
This year’s Channel Partners Evolution, held last week in Washington, D.C., drew a number of first-time cybersecurity exhibitors touting opportunities for MSPs and other partners.
This summer, Vade Secure obtained a $79.2 million financing agreement with General Catalyst to build a go-to-market strategy focused on MSPs in North America. Also, Vade Secure and Exclusive Networks entered a partnership in which Exclusive has added Vade Secure’s email security solution, Vade Secure for Office 365, to its cybersecurity portfolio, providing access to all key cybersecurity market segments.
Trey King, Vade Secure’s senior solutions architect, tells us his company is looking forward to using the financing for further development of its Office 365 security solution.
Vade Secure’s Trey King
“It’s very easy to integrate – in about 10 minutes – for the administrators; it’s very light-touch and invisible to the users, so it keeps them in an environment that they’re very comfortable in,” he said. “We currently protect 600 million mailboxes in 76 countries, which is a very large amount. Most of those are with ISPs from around the world, some of the largest. We currently have Comcast here in the states, so that’s nice. But we use all the data that we see from that traffic to train our machine-learning models and we put that intelligence toward our phishing and spearphishing protection. So those are really the things that stand out about this product and the company.”
Ninety percent of all security breaches begin with a phishing attack, so that’s why it’s on everyone’s mind, King said.
“This is really a solid SMB product and we don’t work with the end customer; we work through our partnerships with the MSPs, and because Microsoft Office 365 is gaining such traction as far as number of users – I think they’re at 180 million now, adding 1 million new customers every week – this is a fantastic product for something that will continue to be more popular among the MSPs,” King said.
Vade Secure has launched a partner portal for MSPs to manage their customers and licenses, and “we are going to be doing a lot more development for the platform and for the different portals that they work inside of so that we bring a lot of functionality,” he said.
“Now is a good time because we have the money to put forth, and we’ve had such good input from so many MSPs that we really believe that shortly this is going to be a product that really speaks to everyone,” King said.
Jeffrey Locke, Hornetsecurity’s business development analyst, tells us his company sells through the channel, specifically targeting MSPs, VARs and MSSPs.
Hornetsecurity’s Jeffrey Locke
“We work in email and cloud security,” he said. “We focus on spam filter, advanced threat protection – for which we have an award-winning product – encryption, archiving, continuity services, and we do a little bit of email signature and disclaimer, which is a marketing side thing that we can do across the domain level. We also integrate seamlessly with Microsoft Office and we have a product that’s called 365 Total Protection.”
Hornetsecurity is based in Germany and is capping off its second year in the United States, Locke said. Its U.S. operation is based in Pittsburgh.
“The goal is to build awareness … and I think we’re almost to that point where we’re ready to actually make a name for ourselves in the market, and that’s why I want to attend shows like this because we want to put ourselves right next to those people that we’re competing with, and not just …
… on the phone when talking to a customer,” he said. “We can actually show them how we’re different here.”
Sontiq was on the show floor demonstrating its mobile cybersecurity and identity theft protection.
Sontiq’s Andrew Bollman
“We are targeted at SMBs and we’re the first pure-play in the market that brings together the power of our identity theft protection solutions both for SMBs and their employees, as well as the mobile device cybersecurity solution for the endpoint devices,” said Andrew Bollman, Sontiq’s director of vertical marketing. “We rebranded our company to Sontiq earlier this summer, and it’s a combination of our product brand EZShield and IdentityForce, so with those two brands we have a combined 60 years in this space.”
Sontiq is able to support any type of channel model, including master agents, agents, MSPs, VARs and resellers, Bollman said.
“We like to think that, because of the way we’ve combined our two different solutions, that we have a unique position in the marketplace right now,” he said. “Traditionally on the identity theft side, you’ve got LifeLock and Identity Guard, and companies like that, but in the mobile cybersecurity space, because of the way we’ve introduced this, we’re trying to differentiate ourselves and not bang up against the many solutions in the market.”
Acronis Surpasses $1 Billion with Investment
Acronis has received $147 million in new funding from an investment round led by Goldman Sachs, bringing the company’s valuation to more than $1 billion.
The cyberprotection company plans to expand its engineering team in Singapore, Bulgaria and Arizona, build additional data centers, and grow through acquisitions. Additionally, it will use the capital to accelerate the business growth in North America in partnership with Acronis SCS, an independent software vendor and distributor for the public sector.
Acronis’ Gaidar Magdanurov
Gaidar Magdanurov, Acronis‘ CMO and chief cyberstrategy officer, tells us his company will increase investments in Acronis Cyber Platform that allows third-parties to customize, extend and integrate cyberprotection. This means that partners will have more workloads to protect and more services to sell to their customers — getting a new sales opportunity and increase in margins, he said.
“For instance, a third party can support a new workload – let’s say Salesforce – and then partners will be able to sell the protection for Salesforce as part of their services,” he said.
Acronis is a partner-focused and partner-driven organization with 95% of sales going through partners — resellers, service providers, OEMs and retailers, Magdanurov said. The company continues to strengthen its partner network, focusing on education, sales and marketing materials for partners, recruitment and training of service providers, and helping traditional resellers to become cloud resellers and service providers, he said.
Acronis cyberprotection products are available through 50,000 partners and service providers in more than 150 countries in more than 30 languages.
Cybersecurity Deals Heat Up in August
Temperatures weren’t the only thing sizzling last month as …
… strategic deal volume in August soared and included 38 transactions completed totaling $13.3 billion in deal value across M&A, with 16 transactions totaling $12.9 billion, and 22 financing transactions totaling $371 million, according to Momentum‘s Cybersecurity Snapshot for August.
Big cybersecurity M&A was highlighted by the acquisitions of Symantec’s enterprise security business by Broadcom for $10.7 billion, and Carbon Black by VMware for $2.1 billion.
The most active sectors for M&A in August were: security consulting (four), application security (two), endpoint security (two) and network security (two).
In terms of financing, the biggest deals included: Cybereason’s $200 million Series E, AU10TIX’s $60 million private equity, Axonius’ $20 million Series B and Securit.ai’s $18 million Series A. Some 59% of total financing deals were early stage to Series A, and the median amount raised in was $3 million.
The most active sectors for financing included: data security (five), risk and compliance (four), network security (three) and SecOps/incident response/threat intelligence (three).
Momentum’s Dino Boukouris
Dino Boukouris, Momentum’s director and founding member, tells us due to the mega deals that took place, August was the single largest month on record in terms of M&A deal volume.
“Increasing strategic activity further fuels the cybersecurity feeding frenzy that’s happening at all levels in the market,” he said. “New cybersecurity venture funds are being created, including new strategic investment vehicles entering the space, such as the funds recently announced by Splunk and Crowdstrike. Existing cybersecurity-focused investors are raising larger and larger follow-up funds. Significant amounts of capital are flowing into the sector from private equity firms such as Thoma Bravo, Vista Equity Partners and many more.”
SMBs Playing a Dangerous Game
It’s shaping up to be a banner year for ransomware and other cybersecurity threats with a growing list of high-profile attacks on state and local governments, health care providers and now potentially the 2020 election.
Yet, SMBs still have a laissez-faire attitude toward IT security, according to the latest findings from AppRiver‘s Q3 Cyberthreat Index for Business Survey.
The survey polled 1,083 cybersecurity decision-makers at U.S. SMBs with fewer than 250 employees, covering a diverse range of industry sectors. The findings suggest many SMBs are sitting ducks for cybercriminals:
They severely underestimate the impact of a cyberattack. Some 67% of SMB respondents believe they will sustain total damages of less $25,000 in the event of a successful cyberattack, and 55% believe they would even sustain less than $10,000 in damages. In reality, the average cost of a data breach for SMBs is estimated around $149,000.
They are slow to patch vulnerabilities. Only 38% of all survey respondents claim that they apply patches immediately once available.
They simply aren’t taking steps to improve their security. Roughly one-third of respondents at smaller SMBs say they “have not done much” to improve their cyberpreparedness since 2018.
For the first time since the survey’s inception in the first quarter of this year, the third-quarter Index score tipped over …
… the 60-point mark, registering at 60.5 on a 100-point scale and indicating a trend of higher alert among SMBs as compared to the first and second quarters of the year.
Troy Gill, AppRiver‘s manager of security research, tells us the two most significant challenges are helping SMBs understand that the threats they face are real and more costly than many of them think. They also need to realize that there is no “magic charm” that will protect them against every threat, but there are simple things they can do, like updating their software, that can make them much harder targets, he said.
AppRiver’s Troy Gill
“The survey findings also show that MSPs can no longer count on personal relationships and competitive pricing alone to win and keep SMB customers,” he said. “The data indicates that these are among the least important criteria SMB executives use to choose security providers. What’s more important is expertise, experience and [around the clock] support. At the end of the day, it doesn’t matter how much they get along with an MSP rep or how affordable the solution is, but rather, when there is a security threat, only expertise, experience and 24/7 support will make the difference between surviving or folding their small business.”
Fear-based selling works just fine if the aim is to spread fear and hopelessness, Gill said. What it doesn’t do is give SMBs a good understanding about their specific risks and their most cost-effective cybersecurity strategies. In that sense, the best tools available are education, awareness and consultations with trusted advisors (MSPs, MSSPs) who understand their business, he said.
“We have to make cybersecurity a standard component of the business process, from the startup phase onward,” he said. “It should be part of all professional curricula and treated as fundamentally as other business functions like accounting, marketing or sales. Additionally, banks and investors need to incorporate cybersecurity into their due diligence before financing any new business or expansion, regardless of industry.”
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