SMB resellers primed to drive cybersecurity channel growth in 2024
CONTEXT tells CRN the SMB space offers higher profit margins and recurring revenue opportunities to channel partners
Smaller resellers providing cybersecurity to SMBs are locked and loaded for a successful start to 2024 in Europe, according to analysis from CONTEXT.
The market watcher defines smaller resellers (SMRs) as those whose main business is with small, medium and SOHO customers.
CONTEXT claims that in France, and to a lesser extent the UK and Italy, SMRs have been able to capitalise on growing demand from an SMB market buoyed by greater investment and the need to provide customers with more tailored solutions.
It adds the year-on-year revenue sales performance of France is illustrative, with figures for Week 52 of 2023 revealing the country is by far the strongest performer in cybersecurity sales through distribution.
Across Europe, cloud security revenue sales as of Week 52 stood at four per cent year-on-year.
However, endpoint security and network security fared worse due to a weak Q3 and Q4 2023, dipping 1.5 per cent and 0.5 per cent, respectively.
The cloud security segment in France far exceeded overall European revenue sales growth for the period, with sales of 26.2 per cent year-on-year, followed by the UK (13.9 per cent) and Italy (11.8 per cent).
Cybersecurity revenue sales as a whole slumped slightly by 0.3 per cent but finished the year strong after a significant uptick in Week 50 across the top five markets (the UK, France, Germany, Italy and Spain).
The analyst firm states this is typically an important time of the year in cybersecurity channel sales due to customer renewals and upgrades.
The opportunities for the channel
CONTEXT global director, research & business development, Joe Turner (pictured) explains to CRN what opportunities the SMB space can bring to channel partners.
"The biggest opportunity is the fact that the SMB market is very large and continues to grow rapidly. It could reach $17tn-18tn global market size by 2025 (according to figures from Black Hat Europe 2023). This represents a significant opportunity for channel partners to reach a large and growing customer base," Turner tells CRN.
"The second one I would mention is higher profit margins. SMBs are often willing to pay a premium for high-quality services and support that are local (SMBs often prefer to work with local businesses that understand their specific needs). This can lead to higher profit margins for channel partners that are able to provide these services."
Finally, Turner says the SMB space also provides partners with recurring revenue opportunities.
"SMBs are increasingly looking for cloud-based solutions that offer recurring revenue opportunities. Channel partners can capitalise on this trend by selling and managing cloud-based IT solutions for SMBs.
"This offers the SMBs peace of mind knowing that their IT infrastructure is being managed by a qualified professional without them having to hire and train someone themselves."