Internet Security Systems (ISS), a long-time player in the Intrusion Detection market, jumped into the managed services market last year when it acquired Netrex Secure Solutions (see Best-of-Breed Platform for Managed Security Services). The combined company has a five-year history of selling managed firewall, VPN, antivirus, content filtering, intrusion detection, assessment, and emergency response services directly to large enterprises. Along the way, ISS also built ten resale partnerships, helping providers like BellSouth, Ameritech, and SAVVIS offer managed security to their own customers. Earlier this month, ISS announced nine new partnership agreements, signaling a shift in its go-to-market strategy.
According to Mark Hangen, president and general manager of ISS Managed Security Services, direct sales to ISS Enterprise Solutions customers account for 60 percent of services revenue. This approach continues to be profitable: A half dozen Fortune 100 companies were signed during the last quarter. But Hangen expects the market to change significantly.
"We're seeing a shift," said Hangen. "Enterprises are buying security as part of a larger offering from network integrators, web hosters, and cyber-carriers. In the long run, we expect 90 percent of our revenue will be derived from this larger market." To accomplish this goal, ISS Managed Security Services has changed its focus to signing partners who will bring managed security services to market along with their own services.
Targeting Market Segments
This week's announcement doubles the number of ISS channel partners, adding some big names: Lucent NetCares, PriceWaterhouseCoopers, iGroup (Computacenter), Qwest, HiFive!.net, Log On America, NOCpulse, SevenSpace, and the Sutherland Group.
According to Hangen, new customers reached through these deals number in excess of two million, world-wide. Where is this growth coming from? "Enterprises have many channels they can buy security from," said Hangen. "We set ourselves a modest goal: We want to be in all of them."
Auditors/Consultants: "These companies are hired to conduct security assessments; some provide network-based integration," said Hangen. "Customers often look to their consultants for product recommendation." Signing PriceWaterhouseCoopers is a major coup for ISS. PWC is the world's largest professional services firm, employing over 150,000 people in 150 countries. ISS services will be resold by PWC's Audit and Global Risk Management Solutions, an organization of more than 600 practitioners.
System/Network Integrators: Integrators have always been a lucrative VAR channel for hardware and software; adding managed services to the mix should be a slam-dunk. Last month, ISS announced an agreement with Dimension Data, the largest Cisco reseller, worldwide. "DimensionData has a dominant market share in Asia and presence in 35 countries," said Hangen.
This week, ISS adds two new integration partners: iGroup and The Sutherland Group. "iGroup's parent company, Computacenter, is Microsoft's largest reseller with 65 percent of the European market," said Hangen. "After an extensive competitive assessment, iGroup selected us to add security to their turnkey solutions for eCommerce." The Sutherland Group is an electronic Customer Relationship (eCRM) professional services company, another market where security is clearly important.
CyberCarriers: Existing partners Ameritech, BellSouth Business Internet Services, and MCI/ Worldcom subsidiary Embratel are joined this month by Qwest Communications International and Lucent NetworkCare Professional Services (NPS). Because Lucent focuses on selling to other cyber-carriers, the NPS deal actually represents over 100 carrier resale opportunities, including CLECs, incumbents, and hosting companies, according to Hangen.
xSP's: ISS isn't worried about differentiating between Managed Service Providers (MSPs), Internet Service Providers (ISPs), and Application Service Providers (ASPs) -- Hangen wants to partner with every kind of service provider. Existing partners in this space include Globix and SAVVIS. New partners announced this week are HiFive!.net, NOCpulse, and SevenSpace.
HiFive!.net delivers web-hosted network, security, and application assurance services. NOCpulse offers proactive management services for business customer web infrastructure. SevenSpace provides high-end managed operations and applications to Global 2000 customers. According to Hangen, these MSPs will resell ISS managed security in combination with web hosting services.
Industry-Focused Service Providers: Partnering with vertical network and service providers is an excellent way to reach new customers. These "industry-focused" providers have already penetrated a specific market, developing customer trust and building a brand. Breaking into a vertical market as an outsider can be tough. Leveraging a partner's sales force, business relationships, and brand name should be easier. GE Medical Systems, a $7B medical information and technology provider with presence in over 200 countries, is the first such partner announced by ISS.
http://www.isp-planet.com/hosting/iss_partners1.html
