SMB Budgets, Rising Cyberattacks Create Headaches for Channel

There is a real opportunity for MSSPs and other cybersecurity providers to increase their educational programs.

Edward Gately, Senior News Editor

January 23, 2020

4 Min Read
Business mistake, headache

SMBs’ budgetary constraints are preventing many channel partners from providing all the protection they need to fend off cyberattacks.

That’s according to network security provider Untangle‘s second annual Voice of the Channel report. It surveyed more than 100 partners, both domestically and internationally, to better understand the current cybersecurity trends impacting the channel, as well as their security predictions for 2020.

The survey results look at current trends and barriers partners face when protecting clients against emerging threats and how they will shape future strategic business decisions for MSPs and VARs.

Heather Paunet, Untangle‘s vice president of product management, tells us that 44% of the partners surveyed had clients that still fell victim to malware attacks.


Untangle’s Heather Paunet

“We believe that this can be attributed to, in many cases, client budget limitations,” she said. “With 29% of SMBs, for example, spending less than $1,000 on IT security annually, channel partners must decide what is the best way to protect their client’s network within these limitations. Sometimes, clients will focus on what they believe is their most vulnerable entry point –  such as a point-of-sale system, card reader, etc – without being able to allow channel partners to provide additional layers of protection. Simply, they don’t have the budget to increase the breadth of services that a channel partner could provide.”

Cybercriminals shifted their target to weaknesses within business supply chains to gain entry into networks, but MSPs were fast to mitigate and help customers recover from these attacks, according to Untangle. However, those surveyed continue to face three significant barriers within the cybersecurity market: budget constraints, limited client solution knowledge, and limited time to research and understand new threats. This echoes results found in 2018.

“We learned from the report there is a real opportunity for MSSPs and other cybersecurity providers to increase their educational programs,” Paunet said. “With 20% of customers being skeptical about cloud adoption, another 26% noted their limited experience with these applications that also gave them reason to forego adopting these new business trends — even if they could save them money and streamline critical business processes. MSSPs, who are the front line between an SMB and network connectivity, now have the opportunity to extend their service role by transitioning into an ongoing education and training guide for their customers.”

Other highlights of the report include:

  • Five percent of partners purchase cybersecurity solutions directly from a vendor.

  • Twenty-seven percent of partners believe that moving customer and client data to the cloud offers better security than on-premises solutions.

  • Last year, respondents said providing cybersecurity solutions was more than half of their overall business, compared to 2018 when 77% of respondents said cybersecurity was less than 30% of their overall business.

  • Partners identified their clients were specifically targeted by phishing (84%), malware (84%) and ransomware (63%) attacks.

  • Thirty-five percent of partners are considering adding identity and access management (IAM) along with risk and compliance management to their 2020 portfolio.

  • Price (36%), limited experience (26%) and lack of trust (20%) are the top barriers the channel experiences when their clients begin or consider adopting cloud security solutions.

“In general, channel partners have a majority of the foundational offerings needed to protect themselves and their customers from cybercriminals, such as firewalls (87%), web filtering (77%), endpoint security, remote monitoring and data loss prevention,” Paunet said. “The ongoing shortcomings channel partners face are twofold: There is the lack of …

… time to study, understand or continue to monitor emerging threats as fast as they are created by hackers, and also continuing to educate their customers on the benefits of new technologies.”

An unexpected trend that emerged when partners were asked about additional services and features they plan to offer was compliance as a service, she said.

“The idea that so many school districts, local governments and medical offices were targeted in 2019 through holes in the supply chain have opened up the idea that compliance and audits around compliance may be the next service offering channel partners should consider,” Paunet said. “New laws, such as that in California regarding data privacy, are going to need active and thorough reporting, and who else is better equipped to maintain and run these reports than the channel partners who manage the network?”

The good news for SMBs is that 99% of partners indicated that cybersecurity, as an overall part of their business, will increase or stay the same in 2020, while 85% believe that their cybersecurity revenue will increase in 2020.

“For many organizations, MSPs are the first and sometimes the only line of defense against a cyberattack,” said Steve Young, Untangle’s channel marketing manager. “Channel partners, by nature of their role in helping source solutions, inherit the barriers that SMBs face in the cybersecurity market and need to work within the budgets allocated.”

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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