The EMEA Encryption and Authentication Markets

Transcription

1 The EMEA Encryption and Authentication Markets Current Trends in the Channel whitepaper Evolving, increasingly advanced threats, the increased adoption of cloud services, mobile device proliferation, and virtualization are just a few of the factors that are creating disruptive change. This market disruption generates some clear obstacles and challenges for the channel, but it also presents some significant opportunities. Executive Summary Encryption and authentication markets continue to evolve with increasing rapidity. Evolving technologies and threats have ushered in fundamental change, creating a market landscape that bears little resemblance to the one we knew just a couple years ago. This paper draws on a survey of the EMEA channel to provide resellers with insights into the current state of encryption and authentication markets, and to offer insights for capitalizing on the emerging opportunities these markets are presenting. Introduction Both for enterprises, and the channel that serves them, change continues to come fast and furious. The technology landscape, and the security framework erected to protect it, is highly dynamic. Evolving, increasingly advanced threats, the increased adoption of cloud services, mobile device proliferation, and virtualization are just a few of the factors that are creating disruptive change. This market disruption generates some clear obstacles and challenges for the channel, but it also presents some significant opportunities. This paper is intended to help integrators and resellers that deliver encryption and authentication solutions. The paper draws on market research to help readers make more sense of the current state of the market, and get a more informed picture of where it s heading. The Opportunity: Market Demand for Authentication and Encryption For those who ve been in security for some time, this will come as no surprise: Customers are increasingly concerned about security, and their concerns are broad and far reaching. According to our survey, 77% of respondents say customers are more, or much more, concerned about security breaches. Only 1.7% say customers are less concerned. The EMEA Encryption and Authentication Markets Whitepaper 1

2 Based on security breaches in the last 12 months, are your customers expressing more or less concern than a year ago about protecting their data? Less concerned than a year ago Same concern as a year ago More concerned than a year ago Much more concerned than a year ago 0% 20% 40% 60% When asked what concerns or issues customers are facing, respondents were presented with 14 categories. Nine categories received responses of 30% or more. For resellers, these areas represent potential opportunities because these concerns are driving security investments. Further, the categories that received the highest responses, Increasing reliance on authentication for network security (44.6%), Managing encryption and disparate encryption keys across the enterprise (49.1%), and Loss of a mobile device (48.2%) all are areas in which encryption and authentication vendors have opportunities to address significant market needs. Session hijacking Phishing attacks Man in the middle attacks Malicious code attacks Loss of a prototype Loss of a mobile device (smart phone, laptop) Key logger attacks Inappropriate data access Data leak incidents from internal employees - accidental Data leak incidents from internal employees - intentional Proliferation of smart phones and tablets in the workspace Complying with increasingly complex and changing security regulations Managing encryption across the enterprise and disparate encryption keys Increasing reliance on authentication for network security None of the above Technologies and Opportunities 0% 10% 20% 30% 40% 50% Encryption and Key Management Over the past few years, as organizations have adapted to increasingly pervasive regulatory and compliance mandates and more stringent internal polices, encryption deployments have grown in number and scope in most enterprises. What these organizations are finding is that, particularly when many disparate encryption platforms get deployed across an enterprise, managing policies and keys both efficiently and securely is an increasingly troublesome challenge. The EMEA Encryption and Authentication Markets Whitepaper 2

3 The survey numbers bear this out: Of all 14 categories, Managing encryption and disparate encryption keys across the enterprise received the highest response, with 49.1% of respondents identifying it as an area of concern for customers. Consequently, channel partners that can deliver solutions that help bolster security and administrative efficiency in cryptographic key management can capitalize on a significant opportunity. Further, it is important to note that another key application area for encryption, reducing the risks associated with data leaks, is also a significant area. In the survey, data leaks from internal employees were broken down into two categories, intentional (which received a response of 33%) and accidental (43.8%). Combined, these represent the most prevalent area of concern and encryption and authentication clearly play a significant role in mitigating these types of risks. Mobile Devices For years, organizations have been struggling with the implications of an increasingly mobile workforce, and the threat posed by sensitive data on corporate-issued laptops. The bring your own device (BYOD) phenomenon, and its incredibly fast and pervasive impact on virtually every organization, necessitated a fundamental rethinking of security approaches. Not surprisingly, the survey found that mobile devices were a concern for the clients of a large percentage of respondents. Two categories, Loss of a mobile device (smartphone or laptop), with a 48.2% response, and The proliferation of smartphones and tablets in the workplace, with 40.2%, represent clear priorities for many organizations, particularly from an authentication standpoint. Toward that end, when respondents were asked what type of authentication technologies customers were expressing interest in, several areas of mobile device authentication received high responses, which demonstrates the pressing demand for solutions in the mobile arena. 77% expressed interest in software (mobile device) authentication, 49.5% in SMS (out of band) authentication, and 43% in authentication strategies for consumer (personal) mobile devices. Authentication Technologies The increased demand for authentication is prevalent in many of the findings that the survey uncovered. When asked about concerns and implications that customers are expressing, 44.6% of respondents listed Increasing reliance on authentication for network security, the third highest among all the categories included. When it comes to hardware-based authentication mechanisms, respondents indicated that there is comparable interest in both Certificate-based authentication (including USB or smart card form factors), which was noted as an area of interest for 55.9% of respondents, and OTP hardware authentication with challenge-response, which received a figure of 48.6%. Following are some additional statistics surrounding authentication: 36% are seeing demand for authentication in virtual desktop infrastructures. 25.2% are seeing interest in biometric authentication. 18.9% said their customers are interested in using authentication for transaction signing. These numbers point to strong demand for authentication across a range of use cases, deployment scenarios, and delivery models. The EMEA Encryption and Authentication Markets Whitepaper 3

4 Which of the following authentication security technologies have your customers expressed interest in learning more about/evaluating for future use? Software (mobile device) authentication SMS (out of band) authentication OTP hardware authentication Authentication strategies for consumer Authentication for virtual desktop Secure browser solutions Biometric authentication Transaction signing authentication Identity federation for SaaS applications Knowledge/context-based authentication None of the above Cloud While the cloud represents a clear area of growth, the survey indicates this market hasn t yet started to generate sizable revenues for the bulk of the channel. For a big majority, 77.5%, revenues from cloud computing currently account for less than 25% of revenues. Still, a decent percentage, 17.1%, saw between 25 and 50% of their revenues originating in the cloud, and 4.5% saw between 50 and 74% of their revenues originating in this category. When considering the relative nascence of many cloud offerings, it s clear these numbers are up significantly from a year or two ago, and that they ll continue to climb. When asked about interest in authentication solutions, Identity federation for SaaS, only received 17.1%, which was one of the lower areas of response. It seems clear that the demand for solutions that help address this area will grow as customers continue to rely on an increasing number of cloud services. However, it remains to be seen what kind of deployment types and business models will gain critical mass, and what kind of role VARs will have in delivering these emerging solutions to market. What % of your authentication and/or encryption security revenue is cloud-computing based? 0-24% 25-49% 50-74% % Business Approaches and Considerations Many questions in the survey looked at factors around business approaches and trends. Following is an overview of some of the most significant findings. The EMEA Encryption and Authentication Markets Whitepaper 4

5 Customers Open to Change Given the pace of change in IT, and security more specifically, it stands to reason that resellers and their customers are open to change, making for a fluid market. When it comes time to renew contracts for authentication projects, a solid percentage, 62% of respondents, typically discuss alternative technologies and platforms with customers, and those customers are interested in exploring alternatives. Openness to New Partnerships Market fluidity also is evidenced in the dynamic nature of collaboration and partnerships. A significant percentage of resellers are open to, or expecting to form, new partnerships. 45.2% expressed that they were likely (39.4%) or very likely (5.8%) to work with a new complementary vendor. The takeaway? Given the pace of change, there s an increasing realization that partnering with complementary vendors can improve service offerings and enable vendors to more rapidly adapt to changing customer requirements. Bundling Opportunities with Authentication It is very common for resellers to quote authentication offerings when customers are looking for other types of solutions. For example, when customers are looking for VPN solutions, 79% will also quote for authentication offerings. When selling hard disk encryption solutions, such as Checkpoint, McAfee, and SafeNet, 63.9% will also quote for authentication products. A sizable percentage, 47.4%, selling virtual desktop infrastructure, such as offerings from Microsoft and VMware, will also provide bundling options with authentication. When selling online banking and databases, 25% of resellers will also pursue authentication sales efforts. Do you, as a matter of course, quote your current authentication vendor technologies when your customers are looking to purchase any of the following? Databases Hard-disk encryption Online bank applications Virtual desktop infrastructure VPN solutions Purchase Criteria When customers evaluate new authentication offerings, they have a lot of factors to consider, and pretty much all are important. Across all 8 factors in the survey, virtually no respondents labeled a factor not at all important. Still, there are a few factors that customers deem most critical. Costs to deploy and manage and Interoperability with existing infrastructure, each had the highest percentage of users that gave these criteria a ranking of extremely important. These also had the highest average rating (3.98 and 3.90 respectively) of all categories. Ease of deployment, which 47% rated very important, had the next highest rating average. These top ranking factors all speak clearly to the deployment experience. When selling authentication solutions, channel partners will be well served by understanding the clients authentication infrastructure and objectives, and selling a solution that will deploy optimally within that environment. The EMEA Encryption and Authentication Markets Whitepaper 5

6 Incentives When trying to boost sales of their offerings in the channel, encryption and authentication vendors have several promotional options to choose from. Which are most effective? In our survey, we asked respondents which types of promotions they find most valuable. 71.7% of resellers indicated that Extra margin discounts were the most effective incentives. 63.6% listed Starter pack discounts, which was the second highest alternative. Individual voucher incentives and Attach-rate bundles with other technologies (eg VPN) were less popular but still received a sizable percentage of responses (30.3% and 25.3% responses respectively). What types of promotions do you find valuable from current or potential authentication or encryption vendors? Attach-rate bundles with other technologies Individual voucher incentives for resellers Extra margin discounts Starter pack discounts Conclusion For resellers of authentication and encryption solutions, the market is both dynamic and full of potential. For each disruptive change taking place in the market whether increased adoption of cloud services, mobile devices, or virtualized infrastructures there are resulting opportunities. While the pervasive concerns of customers will continue to drive adoption of authentication and encryption solutions, resellers will need to grow increasingly nimble to ensure they are delivering solutions that align with customers evolving infrastructures and objectives. About the Survey This paper draws from a survey of approximately 150 channel vendors across Europe, the Middle East, and Africa. The majority of these respondents were value-added distributors or resellers that sell authentication or encryption solutions. The survey was conducted in early About SafeNet Founded in 1983, SafeNet, Inc. is one of the largest information security companies in the world, and is trusted to protect the most sensitive data for market-leading organizations around the globe. SafeNet s data-centric approach focuses on the protection of high value information throughout its lifecycle, from the data center to the cloud. More than 25,000 customers across commercial enterprises and government agencies trust SafeNet to protect and control access to sensitive data, manage risk, ensure compliance, and secure virtual and cloud environments. Contact Us: For all office locations and contact information, please visit Follow Us: SafeNet, Inc. All rights reserved. SafeNet and SafeNet logo are registered trademarks of SafeNet. All other product names are trademarks of their respective owners. WP (EN) The EMEA Encryption and Authentication Markets Whitepaper 6