Market Maturity and Security Competitive AdvantageBy Mike Rothman
One advantage of my background is that I’ve used and marketed/sold security products, as well as followed the industry for a long time, so I see patterns over and over again. But before I jump into that, you all need to head over to Lenny Zeltser’s blog. He’s doing a lot of writing, and given the general lameness of the rest of us security bloggers, it’s nice that we have a new
victim thought leader to peruse.
Lenny is doing a series now on defining Competitive Advantage for Security Products. The posts deal with Ease of Use and Price. As you would expect, I have opinions on this topic. I see both as indications of product/category maturity. I don’t necessarily want to delve into the entire adoption curve for security products, but suffice it to say most innovative products are narrowly defined and targeted towards an enterprise-class customer.
Why? Enterprises have the money to pay way too much for way too little capability, which half the time doesn’t even work. But they’ve got small problems on large enough scales that they’ll write big checks on the faint hope of plugging in a box and making the issue go away. Over time, products/categories either solve problems or they don’t. If they make the cut, interest starts to develop in smaller companies that likely have the problem (though not at the same scale), but not the money to write big checks.
Smaller companies also tend to be less technically sophisticated than a typical enterprise. Of course that is a crass overgeneralization, but at minimum an enterprise has resources to throw at the problem. So a product with a crappy user experience usually doesn’t deter them. They’ve got folks to figure it out. Smaller companies, not so much.
Which is why as a product/category matures, and thus becomes more applicable to a smaller company market segment, the focus turns quickly to ease of use and price. Small companies need a streamlined user experience and don’t want to pay a lot. So they don’t.
I lived through this in the anti-spam business. In its early days, customers (mostly on the enterprise) wanted lots of knobs and dials to tune their catch rates (and keep their people busy and employed). At some point customers got tired of endless configuration, so they opted for better user experience. Early leaders which couldn’t dumb down their products suffered (yes, I still have road rash from that).
At the same time, Barracuda introduced a device for about 10% of the typical price of an anti-spam gateway. Price wasn’t just a differentiator here, it was a disruptor. $50K non-competitive deals because $10K crapfest. It’s hard to grow a business exponentially when you have to compete for 20% of the revenue you previously got. Right, not a lot of fun. And now managed anti-spam services provide an even easier and more cost effective option, so guess where many customers are moving their spending?
I agree with Lenny that ease of use and price can be used for competitive advantage. But only if the market is mature enough. A low-cost DLP or SIEM (as opposed to log management) tool won’t be successful because the products are not easy enough to use. So for end users buying a lot of this technology, keep your expectations on price and ease of use in alignment with market maturity and you can find the right product for your environment, regardless of what size you are.