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Cyber liability insurance: Modern security apparatus for modern security threats

Cyber liability insurance: Leveraging an old concept for modern challenges

Despite modern security challenges, there are modern solutions emerging to help customers navigate security risks, reduce risk for enterprises, generate better security hygiene, and perhaps even foster stronger standard bodies. One solution is taking an old concept, insurance, and modifying it for the data age.

Insurance is a concept that has existed since the Babylonians built the hanging gardens, and likely in some form before that. Insurance generally exists in a love-hate relationship with those that are covered. However, it is often deemed essential (or made essential through law) to cover the many what-ifs of life.

We discussed in the prior section several ongoing security challenges related to liability and business risks that are causing customers to reconsider pursuing digital transformation. However, what if customers’ digital footprints were insured? What if damages from a breach were paid through an insurance company, or if an expert recovery team was funded through a policy that would be dispatched as soon as there was an incident? And what if such a policy included damage control and positive marketing services following a breach? This would make customers much more comfortable by mitigating part of the risk associated with taking the technological leap toward digital transformation.

This is not an “aha” moment. Cyber liability insurance already exists on the market. It is defined by the International Risk Management Institute Inc. as:

 A type of insurance designed to cover consumers of technology services or products. More specifically, the policies are intended to cover a variety of both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data within its internal electronic network.

Most notably, but not exclusively, cyber and privacy policies cover a business’ liability for a data breach in which the firm’s customers’ personal information, such as Social Security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm’s electronic network. The policies cover a variety of expenses associated with data breaches, including: notification costs, credit monitoring, costs to defend claims by state regulators, fines and penalties, and loss resulting from identity theft.

Companies such as Nationwide and Hiscox, among a long list of others, provide it. However, it is hardly brought up in the digital transformation discussion, and TBR believes it has important market impacts as well as drives opportunities for current security vendors. In terms of the market, TBR believes the more mature cyber liability insurance becomes, the faster organizations will adopt digital transformation. It would be beneficial if cyber liability insurance were part of the conversation when a vendor leads a digital transformation implementation, just as car insurance must be a consideration when buying a new car.

Not your father’s partner programs: How vendors and partners are evolving cloud ecosystems

Chicken or egg first? For partner programs, that makes a big difference

As Intel (Nasdaq: INTC), Microsoft (Nasdaq: MSFT) and Cisco (Nasdaq: CSCO) created the modern computing era in the 1990s, partner programs were at the forefront. The success of these companies and the distributed computing era in general was largely built on the backs of technology and distribution partners. In fact, these companies still rely on partners to drive a majority of their revenue today. The same cannot be said for the cloud era of IT, which was led by the direct sales strategies of top vendors such as Salesforce (NYSE: CRM) and Amazon Web Services (AWS; Nasdaq: AMZN). These two vendors became leaders in their respective cloud markets by selling directly to customers, bypassing distribution partners altogether. Partners are certainly playing a larger role now, but the timing does impact their position in the value chain for cloud. Without a well-defined value-add in the self-service, transactional and passive sales strategies for cloud, partners are forced to create or carve out activities that are both unaddressed by the cloud provider and hold value for the end customer. Rather than traditional IT vendors relying on partners to drive their business, in cloud those partners are on their own in many respects to identify and develop their own value-add. Being creative, developing intellectual property and focusing on the gaps between multivendor solutions are much more important activities for partners in cloud programs compared with traditional ones.

Partners may look the same, but are in fact quite different

“What does a cloud partner look like?” was a common question as these new cloud-centric programs came to be. It was unclear if a new startup class of born-on-the-cloud partners would come into existence, or if the existing stock of VAR, distributor, MSP, systems integration (SI) and hosting partners would eventually transform their businesses to align with the new cloud business opportunities. As shown in Figure 1, the types of partners participating in new cloud programs is just the first category of changes programs are undergoing. As the answer to what type of partners are needed for these programs comes into view, it is looking like a little bit of the former and a lot of the latter. Cloud-native partners that are focused on consulting, managed services, intellectual property development and cloud solution integration hold a small but important space in the market. The difficult thing for vendors is that there are not very many of these newly formed partners, and to make matters worse, many are being acquired. It is also difficult to spur their creation or fit them into a traditional partner program. While traditional partners are cattle that can be controlled and herded in a consistent direction, cloud-native partners are wilder animals that create, forge and follow their own path. In terms of existing partners changing to focus on cloud solutions, that, too, is a difficult task. The truth is that many traditional VAR-type partners, focused on reselling and implementation activities, may not survive the transition to cloud solutions. Part of this is generationally driven, as many of the baby boomer-owned partner businesses lack the incentive to adapt their business model with retirement looming. Many of these partners will ride the slow decline of traditional IT opportunity until eventually closing their doors. Those traditional partners that do make the transition to a more cloud-focused business model will compose the largest segment of cloud partners. While they may keep the same name, these partners will be operating in a fundamentally different manner compared with traditional partner models.

emerging trends in partner program attributese
Figure 1: Emerging Trends in Partner Program Attributes

Distributors and VARs: The unsung heroes of the IoT market

The background

Commercial IoT has received substantial press over the last three years. It started in 2015 with hyped claims of IoT’s ability to deliver total transformation, but expectations around the technology have matured and IoT is now viewed as a reasonable technique for solving business problems. However, one thing has not changed: When it comes to IoT market participants, the focus of the discussion remains on larger IT vendors, SIs and customers. The missing story is the involvement of the distributors, VARs and smaller SIs, and the current needs of the small to midsize customers.

What are distributors?

Distributors sit between IT vendors and VARs or SIs, procuring equipment or software from the former and distributing it to the latter two. Because distributors generally have a very large customer base, they can help vendors reach more customers or provide a channel for vendors that cannot afford to build their own, such as smaller ISVs. Because distributors procure equipment from vendors and stock it themselves, they are incentivized to educate VARs or SIs about vendor products and help market them as well as to deliver sales training, demos and exhibitions. Distributors are masters of the supply chain, bundling and contract negotiations.

What are VARs?

VARs, along with SIs, serve on the frontline of IT and offer a more tailored storefront to customers than a larger vendor. VARs will seek to build and deliver turnkey solutions by mixing and matching technology and software, as well as layering on services of their own, such as integration, customization, consulting, training and implementation. VARs are often organized by customer type, from those offering general IT services to those specializing in education, the public sector, heavy industry and other niche areas. VARs, along with SIs, often have the keenest grasp on customer challenges, making them well positioned to package IoT components, build applications or offer services.

The IoT market has begun sorting itself out in 2019 — a vast improvement from its disorganized past

It has been a wild and chaotic ride for Internet of Things (IoT) vendors, with many placing big bets on IoT in the past and entering 2018 largely disappointed by the results. While IoT will likely never meet the expectations placed on it in 2015 and 2016 — the peak of hype — IoT’s contribution to IT vendor revenue will increase, with IoT ultimately becoming a core revenue driver. IoT, as a technique to solve business challenges through the assembly of technology to drive results, such as predictive maintenance, resource efficiency, value-added services or generally, increase insight, is not going anywhere.

The good news for vendors is IoT is getting a lot easier as the ecosystem sorts itself out. The increase in portfolio focus and partnering is making the market easier to navigate for vendors and customers. Offerings are becoming easier to implement and integrate as vendors begin to converge on architectures and standards, as well as orient go-to-market strategies toward coopetition rather than “winner takes all.” Customers are coming to market with a greater understanding of what they are looking for thanks to efforts by vendors and early adopters educating the market and cutting through the hype pays off. TBR believes 2019 marks the emergence of “go-to-market 2.0” as an evolved strategy for both IT and OT vendors seeking to better profit from IoT.

 

The 1Q19 Commercial IoT Market Landscape looks at technologies and trends of the commercial IoT market. Additionally, TBR catalogs and analyzes by vertical more than 450 customer deals, uncovering use trends, identifying opportunities, examining maturity, and discussing drivers and inhibitors.

The IoT market continues to stabilize, with the overall market growing at a moderate accelerating CAGR of 24.8%

4Q18 Commercial Internet of Things Market Forecast infographic

TBR projects total commercial Internet of Things (IoT) market revenue will increase from $456.1 billion in 2019 to $1.4 trillion in 2024, a CAGR of 24.8%.

Topics covered in TBR’s Commercial IoT Market Forecast 2019-2024 include deeper examinations, such as trends, drivers and inhibitors of the seven technology segments we track (e.g., cloud services, IT services, ICT infrastructure, and connectivity), the 10 vertical groupings we cover (e.g., public sector, healthcare, manufacturing and logistics), and four geographies (i.e., APAC, EMEA, North America and Latin America).

In addition to a more in-depth examination of the aforementioned topics, we also delve into the rise of “bundles” and “packaged solutions,” and how vendor partnering is lowering cost of sales for IoT implementations.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].

The IoT market continues to stabilize, with the overall market growing at a moderate accelerating CAGR of 24.8%

TBR projects total commercial Internet of Things (IoT) market revenue will increase from $456.1 billion in 2019 to $1.4 trillion in 2024, a CAGR of 24.8%.

It is important to remember that IoT is a technique for applying technology components, not a technology itself, which leads to certain drivers and inhibitors. Because it is a technique, IoT has an unlimited shelf life. Vendors that invest now and solidify their IoT go-to-market strategy will benefit in the long run. Methods for connecting equipment and solutioning may evolve, but the overarching technique is not going away. However, IoT growth is limited by the components and solutioning that compose the technique, including capabilities, standards and cost. This leads the numerous submarkets and sub-technologies of the IoT ecosystem to experience varied growth.

IoT revenue will accelerate as technological capabilities and standards mature and common solutions appear, culminating in lower cost and complexity.

Graph showing commercial iot market forecast alternative market performance scenarios 2019-2024

TBR believes an emerging growth accelerator is the fact that IoT offerings have evolved from the initial DIY stage to easily integrated components to component kits to, finally, almost complete solutions. At each point in this evolution, IoT becomes less expensive, less burdensome and less risky to customers, while still delivering business benefits. This greatly broadens the market, resulting in market growth and revenue growth for vendors that participate in this evolution.

However, customers remain concerned with the cost of IoT solutions, including the expense associated with transmitting, processing and storing data. The amount of data stored increases as IoT projects remain in operation, and a thoughtful data collection and storage policy is key to maintaining positive ROI.

2019 Devices & Internet of Things Predictions: The mists are clearing as IoT becomes more realistic and better organized

IoT is getting a lot easier

While it is too early to say that the Internet of Things (IoT) market is fully mature, it is maturing. The first three years of the IoT era were filled with extravagant claims, inadequate products and services, and a chaotic partner ecosystem. Starting in 2018 and accelerating throughout 2019 and 2020, more customers will come to the market with an understanding of what they are looking for, offerings will be easier to implement and integrate, and the partnership ecosystem will be more navigable for both vendors and customers.

Increasingly, IoT will be delivered in complete solutions, typically including components from several vendors. As IoT matures, more specific use cases with sufficiently broad applicability will be implemented as solutions, addressing common problems both within and across verticals. Solutions will vary in customizability and integrability.

The economics of data collection, transmission, processing and storage will play an increasing role in the design of IoT solutions. Data-related costs dictate the feasibility of many IoT projects and have driven the adoption of edge solutions.

2019 predictions

  • The IoT ecosystem will sort itself out; vendors will find their niches
  • Packaged and bundled IoT solutions will proliferate
  • Not all data is valuable: Data economics will drive design

 

Register for TBR’s webinar IoT is getting easier, Jan. 23, 2019.

BearingPoint offers collaborative transformation that integrates advisory services and solutions

BearingPoint is transforming from a consulting company that delivers services in a traditional way into a company that is flexible in the way it works with clients and values innovation, collaboration and entrepreneurship. In a discussion, BearingPoint’s new Managing Partner Kiumars Hamidian stated, “We try to reduce the use of PowerPoint with clients,” which essentially leads to increased interactions during the proposal and solution development phases. On the other hand, BearingPoint is increasing its use of collaborative activities with clients and encouraging people to bring their best ideas, often using design thinking and agile-based methodologies. BearingPoint places innovation at the center of its activities across its three business pillars — Consulting, Solutions and Ventures — utilizing its “Be an Innovator” process to generate ideas for new services. The company uses IP assets such as accelerators, as well as incubators and ventures, to drive innovation.

BearingPoint is a European consulting company with global market reach

Executing on its three priorities — markets, portfolio and people — and utilizing its three business pillars will enable BearingPoint to continue to grow revenues and reach its 2020 overall revenue goal of €1 billion (or $1.2 billion). On the markets side, BearingPoint positions as an independent and partner-owned management and technology consulting company that has European roots and global reach and enables clients predominantly in its core European territory to become global leaders. Utilizing its European market reach and a new design and brand profile that emphasizes creativity, innovation, and a collaborative, agency-like approach, BearingPoint is set to attract such clients. As BearingPoint updates its brand profile to represent the company’s diversity, its bold, fresh and modern character will likely lead to growth opportunities, especially in new digital segments. To serve clients outside its core territory, BearingPoint utilizes its Global Reach Offices in Dallas and Shanghai and expands its global market reach through consulting and technology partnerships, such as with West Monroe Partners in North America, ABeam Consulting in APAC and Grupo ASSA in LATAM.

 

 

BearingPoint selected Lisbon, Portugal, as the host city for its Analyst Summit 2018. The event, which was held on Oct. 11, was not a traditional analyst day, as it was held at a former needle manufacturing facility, rather than in a conference room, and the vendor refrained from using PowerPoints to display its capabilities. Instead, the vendor transformed the facility to use personalized setups and spark attendees’ imaginations, and it relied on engaging conversations to gain the attention of the audience. The agenda was rich in topics, ranging from strategic and business overviews to five client case representatives talking onstage about their work with BearingPoint. The company also used a mobile app that was specifically developed for the event to provide personalized information about the event, share files and take live polls of the audience, which further enhanced engagement with the audience.