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As I write this, the Dow is down nearly 600, Congress struggles to pass a bailout bill, and both the Broncos and Buffs lost over the weekend. Bad times my friends, bad times. Like many of you, although my current financial situation is pretty solid, I can’t help but wonder what the future holds. We’re not merely entering uncharted territory, we’re headed straight for that big black circle marked “There Be Monsters Here”. That doesn’t mean we won’t make it to the other side, but the journey is fraught with danger and challenge. First, a couple of assumptions: Some sort of bailout package will pass. Times will get tough, but we won’t enter a full depression. If we hit a depression all bets are off- since, at that point, much of society essentially collapses. But short of total economic collapse, or a miracle economic recovery, we can somewhat effectively follow the trends and postulate some conclusions. I lost my crystal ball years ago during a wild night with Hoff and Amrit involving some bottles of 40 year old scotch, the real Travelosity gnome, and a Vegas cab driver snorting pure ground Brazilian sugar cane, but if we step back we can probably make a few guesses as to the collective future of the security world. First, our starting assumptions: We’ll continue to see severe credit restrictions- even tighter than now. With limited credit and a weak stock market, the economic effects will spread beyond the financial sector. Retail, auto, and other credit-heavy industries will suffer the most. We will see no decline in security threats, but the threats will morph to adapt to changing market conditions. We don’t need to get fancy; belts will tighten, credit will be harder to obtain, the bad guys will keep adapting, and business will continue, albeit more slowly. These lead directly to some conclusions about the security market: Startup cash will dry up, and IPOs are no longer an exit strategy option. There will be less security product innovation, and what is created will be bought earlier, and cheaper, by established players who can’t afford big acquisitions anymore. We will see continued, massive, consolidation as small companies struggle to survive and larger players can’t create growth. These won’t be big buyouts with happy founders retiring on the beach, but survival consolidations. Think Symantec buying Checkpoint, or Oracle buying Symantec. More middle players will consolidate as well, like the Sophos/Utimaco deal. We’ll have a few big generalists, a smattering of middle-sized guys glomming together, and the occasional small company that bootstrapped with a couple paying clients and isn’t dependent on external financing. Best of breed loses to security suites. Users will demand more suites from their vendors, and “good enough” will be the name of the game. If you have a technologically superior solution no one will care. To be honest, no one really cares today, but they’ll care less in the future. Large price pressure. Users will demand these suites at no (or minimal) additional cost. Vendors will grind over each other in a race to the bottom just to keep customers. It may not look like it on the surface price sheets, but in the nitty gritty street battles on deals you’ll see sales guys tossing in their firstborn essentially for free. A continued obsession with compliance, cost reduction, and obvious threats. If a tool isn’t required by the auditors, doesn’t reduce ongoing operational costs, or stop a threat (like spam/viruses) that knocks people offline, it won’t sell very well. Vendors who don’t solve a clear and present business problem are in trouble. It will be nearly impossible to get budget for anything else. We’ll also see some threat evolution: Tighter credit issuing will reduce new account fraud. If it’s harder for the good guys to get credit, it will also be harder for the bad guys. Existing account fraud will increase. It isn’t like the bad guys will go get some non-existent legitimate jobs. They’ll hammer the financial system, especially phishing/preying on financial fears. As any historian will tell you, fraud tends to increase during times of economic extremes- good and bad. Major attack vectors will be similar to what we see today- clientside and web application. I don’t see anything in an economic downturn that changes the technical nature of the attacks we see today- they’ll continue to get more sophisticated, but that’s happening regardless of any economic issues. And, of course, this will impact security professionals and how we do our jobs: The bad guys will keep us employed, but salaries will be under pressure. “Good enough” applies to us as much as it does to our tools. We’ll see a little professional erosion as underexperienced newbies enter the market to stay employed, and non-security IT folks take added security responsibility. Now will be a good time for a diverse skill set to survive fat trimming. We’ll have to do more with less. That’s so obvious I’m embarrassed to write it. We’ll be under even greater pressure to justify what we do, and what we spend on. Again, really obvious, but as we’ve been talking about long before these economic troubles, the most successful security professionals will be those who can clearly communicate with the business and articulate their value. Get used to accepting more risk. We’ll have to take hits on the small stuff to focus our efforts on the biggest risks. Pragmatic wins. The broader your skill set, the less you cost the company while stopping most of the bad stuff; and the better you can communicate all of this the happier you’ll be. It’s always been about getting the job done, but let’s be honest and admit that it isn’t always about getting the job done. While internal politics and BS will never go away, odds are those who take a practical approach will survive better, and perhaps thrive, during tough economic times. In other words, get used to people trying to nibble at your job, tighter

When was the last time you thought about your email security? Have you reviewed the vendors or the market lately? If not, it may be time. It is no surprise that the market is mature; read the collateral and the discussion has long since moved away from technology nuances- rather it is reputational risk reduction & business function continuity. It is no longer startups but some of the largest firms in security. And while not seeing a lot of growth in the segment, we are starting to see changes in how the services are delivered, and that is leading to some vendor swapping. What’s more, these changes are so transparent that the effect on privacy and security is not always obvious. I have been doing a surprising amount of investigation in the email security segment lately. Rich and I have a couple of projects in and around email security, I have a friend who works in this area and was asking some market related questions, I have been helping another friend analyze a prospective job with an email security company, and at Securosis we have gone through the selection process for a supplementary spam filter (Postini, if you were interested). The focus on this segment showed a subtle change in direction, and raised a couple of issues you may want to consider. Every vendor claims 96-99% efficiency, and on any given week, delivers on that promise. Most offer inbound and outbound anti-virus, content scanning, image scanning, archiving, reporting and policy management. Want an appliance or software? No problem. Want it as a service? It’s a replacement market at this point, as every firm has some type of email security and filtering, either in-house or provided as a service. One company’s new email security customer come at another vendor’s expense. And there is a feeling that these offerings are a commodity. If you don’t like the vendor or product you have today, the cost of a switch is far less than it used to be. The battle in email security today is between the entrenched appliances and “security in the cloud”. And much like the AV market once it had reached this stage, changing providers can be a fluid event. Adding an extra layer of anti-spam at Securosis took a few minutes of work, and the cost is negligible. From a consumer standpoint, the ability to choose what I want and switch as needed shows the maturity of this space. Appliances still rule the day, but with firms like Google (Postini) and Message Labs offering quality services, it appears to be this subsegment of the market that is making inroads. I am talking to a lot of customers who have a hybrid in place today, but many I speak with have not looked at their email security solution in years as it works, and so they just don’t give it a lot of thought. Those who do find it an easy choice to adopt a hybrid model, with inbound spam and AV filtering to reduce the load on internal systems while they review their plans for the future. Once again, while there are few new customers to be won, there is quite a bit of switching between vendors going on, with services gaining share. However the change from in-house appliance and software brings some considerations in the area of data privacy. Outsourcing your inbound spam filtering and adding an extra layer of AV seems like a good idea, and can take the strain off older infrastructure. And the switch can be so seamless and easy that often thought is not put into where the IP is actually going. As many of the email security providers offer outbound content analysis, leak prevention, and compliance assurance, you are by nature sending the data you want to protect offsite. While it is almost invisible to daily operations, there are ramifications and considerations for compliance and privacy. In my next post, I will discuss some of these considerations. Share: