Market and technology trends for the channel in 2024: challenges and opportunities

November 22, 2023

Value-add distributor Infinigate predicts challenges facing the channel, vendors and distributors in 2024. These include compliance with regulations such as NIS2, the integration of generative AI into cybersecurity products, the increasing importance of managed services, key security technologies with growth potential and a continued highly interesting market volume for cybersecurity services.

Infinigate, the company specialising in cybersecurity, secure networks and a secure cloud, announces its expectations for 2024. As a growing VAD active across the EMEA region, it can draw on insights and experience at the interface between cybersecurity vendors, resellers and MSPs. The experts at the Infinigate Group have made the following nine predictions:

1) The cybersecurity market will remain very interesting for channels, vendors and distributors with a volume of USD 360 billion by 2027.

Channel partners have the opportunity to develop their service offering and grow in this dynamic market by capitalising on the 15.1% CAGR for channel services.

Klaus Schlichtherle, CEO: “The cyber security market is largely determined by the channel, through which more than 90 per cent is sold or supported. On the one hand, this offers an opportunity for business expansion as more vendors and partners diversify their offerings to capitalise on these opportunities, but on the other hand it also presents some challenges for those involved. It will lead to an increased demand for specialist distributors who are well connected in the industry, have extensive expertise and offer a broad range of services, making it easier for new entrants to access these markets.”

2) The channel faces major challenges, but also new opportunities. In an increasingly complex IT landscape with escalating cybercrime and stricter cybersecurity regulations, channel partners are required more than ever to keep up with the pace of innovation and support their customers with expert advice and the provision of IT solutions as a service. To overcome the skills shortage in the global IT industry, the use of automation and AI-powered solutions can be an answer.

Andreas Bechtold, Regional Vice President: “The transformation from a traditional value-add reseller to a managed service provider with strong cyber security competences will continue to accelerate. In addition to developing and delivering the new services, another important aspect is that MSPs protect themselves from cyber threats, as they usually hold valuable customer data and intellectual property of their customers. Despite all cyber security technologies and services, the likelihood of a customer suffering a cyber incident is very high. Therefore, the expertise of sales partners in the areas of incident readiness, incident response, remediation and recovery is essential for a holistic cybersecurity offering. This business enables long-term customer loyalty, high growth opportunities and the possibility of generating high-quality recurring revenue.”

3) Customers will seek advice on cybersecurity compliance and in particular NIS2 / CRA compliance.

Vendors, distributors and resellers can play a key role in preparing organisations for NIS2 before the October 2024 deadline for national implementation.

Patrick Scholl, Head of OT: “Resellers who are able to provide expert advice and services to their customers on NIS2 will reap the rewards. They can support organisations with compliance and work closely with CISOs and their teams to strengthen their cyber security posture and better understand the risk.”

4) Generative AI will continue to drive change across all industries, opening up new growth opportunities but also creating new challenges.

With the advent of generative AI, technology providers are launching innovative cybersecurity products to meet the demand. The channel urgently needs to adapt to this change and ensure they have a deep understanding of generative AI.

Jamie Little, Pre-Sales Manager Cyber Security: “Without this expertise, the channel will not be able to help organisations adopt it and miss out on a unique growth opportunity. At the same time, as generative AI becomes more accessible, new threats will emerge as hackers utilise it for malicious purposes. The channel needs to advise its customers on the best tools and information to detect and mitigate these threats and look at how it can work with new players in the industry to ensure its customers stay safe in this evolving landscape.”

5) Demand for managed services will increase as organisations struggle with shrinking budgets.

Given the economic challenges in Europe, organisations already struggling with a shortage of cyber skills will increasingly turn to Software-as-a-Service (SaaS) solutions to ensure cost-effective and flexible operations.

Daniel Werner, Director Technical Services (Infinigate Germany): “In 2024, there will be a unique opportunity for sales channels to offer managed security services. These will enable companies to quickly adapt to changing business requirements. The need to support remote working and digital transformation has also led to increased demand for managed services, particularly in the areas of IT infrastructure, cybersecurity and cloud computing.”

6) The MSP opportunity for SMBs: Small and medium-sized businesses don’t have the resources to properly manage the advanced cloud solutions available today and protect themselves from increasingly sophisticated cyber criminals.

Michael Frisby, SVP Cloud Services: “The shift to the cloud is also increasing in the SME segment. However, less than 30 per cent of businesses have adopted Microsoft 365, so there is a growing opportunity for MSPs to help implement secure productivity solutions. Customer security is at the centre of this and distributors that have both in-depth cyber security expertise and cloud capabilities are best placed to help MSPs grow their business.”

7) Resellers need to find ways to differentiate themselves as the lines between them and MSPs become increasingly blurred. Resellers have the opportunity to differentiate and add value to their offering through expert advice and service optimisation for their target customers.

Gordon Lyon, Sales Director (Infinigate UK): “With the increasing demand for IT-as-a-Service (ITaaS), fuelled by the need for businesses to save capital, the line between resellers and MSPs is becoming increasingly blurred. Distributors can help resellers capitalise on this growing model of technology consumption by partnering with forward-thinking vendors that have suitable offerings.”

8) Distribution will be increasingly service and value orientated. Offering services and value-added features can help organisations better meet their customers’ needs and build closer relationships with their customers.

Daniel Werner, Director Technical Services: “The increasing digitalisation of businesses has made it easier to offer services and value-added features, such as online customer support, data analytics and personalised recommendations. Offering value-added services can boost customer loyalty and increase customer retention rates, as customers are less likely to switch to competitors if they perceive significant added value beyond the core product. Value-based sales can also be harmonised with sustainability goals. Overall, consumers want convenience, personalisation and efficiency, which can be achieved through services.”

9) Key security technologies will boost the channel’s business.

Julien Cafiero, Global Business Development Director: “AI-powered solutions that utilise machine learning and process automation are increasingly in demand as they are more autonomous and highly efficient for businesses. These include Zero Trust Security, as tactics need to change to protect the expanded attack surface for increasing cybercrime, and SASE solutions that integrate network and cybersecurity at the source for more efficient and secure networks that are directly integrated into the architecture of the network. Security Orchestration and Automation (SOAR) is a framework that integrates security automation and orchestration tools. This helps to improve the efficiency and effectiveness of security operations.DevSecOps integrates security into the development and operational processes and ensures security throughout the entire lifecycle of an application. Continuous Threat Exposure Management (CTEM) is a systemic approach for organisations to continuously and consistently assess the accessibility, exposure and exploitability of their digital and physical assets. Security awareness training educates employees about cyber security threats and how they can protect themselves and their organisation.”

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