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Channel consolidation predicted, number of security VARs to decline

IT security vendors forecast security channel consolidation in the coming year, but a select few security VARs will survive and even grow.

Security vendors predict the number of security solution providers will decline worldwide throughout 2011, but industry observers say there are steps security channel organizations can take to survive and even thrive in a time of channel consolidation.

The reasons cited for the expected channel consolidation are varied. SonicWall Inc. recently published a white paper for its channel partners call Channel Facing Trends for 2011. The paper included VAR consolidation as a key trend for 2011 and the next 5 years. SonicWall claims that this consolidation will be caused primarily by acquisitions among the VARs.

Ted Hulsy, Director of Channel Marketing for San Jose, Calif.-based SonicWall, said there are specific solution provider sectors that may be more likely to consolidate.

"We see a trend toward more consolidation in the managed solution provider (MSP) community," Holsy said. "Mainly we will see one MSP acquiring another, most often to fill a geographic gap. In some cases, a solution provider will acquire another to gain expertise in a specialty area."

Ed Correia, president and CEO for San Jose, Calif.-based Sagacent Technologies Inc. and a gold partner for SonicWall and other vendors, has a somewhat different perspective on the impending channel consolidations.

"In five years, many smaller solution providers, like SMB mom-and-pop shops, will go away to attrition," Correia said. "Only the larger, more efficient ones will survive."

Security solution providers need to focus on consulting and become a trusted advisor to customers in order to survive in 2011.


Jerry Jalaba
VP of channel salesWebroot Software, Inc.

Webroot Software Inc.'s predictions for 2011 also included a prediction of fewer security VARs by the end of 2011. Jerry Jalaba, VP of channel sales at Boulder, Colo.-based Webroot, said, "In this soft economy, being acquired in the coming year may be an exit strategy for some long-time security solution providers."

Even so, Webroot is actively seeking more security channel partners around the world.

"If the role of the VAR is to be a point-of-sale for the customer, that VAR will die out. Security solution providers need to focus on consulting and become a trusted advisor to customers in order to survive in 2011. This is the pressure on VARs this year," Jalaba added.

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