While challenges persist for security vendors due to COVID-19, opportunities abound as customers adapt to the new world

Acquisition sprees continue despite economic woes

As noted in TBR’s 1H20 Security Benchmark, consolidation continues in the enterprise security market as customers continue to seek to work with fewer vendors to secure their IT portfolios. This encourages larger firms to make tuck-in acquisitions to meet customer demands. COVID-19 rapidly increased the need for enterprise security in remote and edge environments to enable employees to securely work remotely.

Logistical challenges with hardware shipping threaten multiline vendors’ ability to deliver solutions

Many multiline vendors in the enterprise security market also sell data center infrastructure and attach security sales to hardware sales to provide customers with solutions. The logistical and supply chain challenges that data center hardware vendors encountered due to COVID-19 hampered their ability to fulfill orders, resulting in a hardware sales backlog in 1H20. However, this backlog will be cleared out in 2H20, which will enable these vendors to realize the revenue. This should, in turn, enable multiline enterprise security vendors to realize the revenue of attached security solutions in 2H20 as well.

New use cases created at the edge amid pandemic

COVID-19 has fundamentally changed how society works, rapidly increasing the demand for new use cases for IT infrastructure as companies swiftly seek new ways to continue to do business. A key example is the emergence of new edge use cases to help slow and monitor the spread of COVID-19, including leveraging surveillance equipment to monitor social distancing and mask wearing as well as assist to assist with contact tracing if a person tests positive. These new uses will result in the need for more technology at the edge and heightened security to protect individuals’ privacy.

TBR’s Security Benchmark provides clients a deep dive into the enterprise security market, highlighting the financial performance of public and private, multiline, and pure play vendors within the industry.

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