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IT Security-as-a-Service Demand Creates Opportunities

Small and medium-sized enterprises (SMEs) have compelling reasons to invest in IT security solutions, and telecom service providers are able to offer these new services, according to findings from the latest market study by Analysys Mason.

Their report of the study findings explore the opportunity for traditional telecom network operators to sell IT security services to their SME customers. The analyst believes that IT security services offer a way for these network operators to stem the decline in other service revenue.

However, selling security to SMEs is not straightforward and telecom operators have a low share of this market. According to the Analysys Mason assessment, only 13 percent of SMEs that buy IT security solutions do so from a local communications service provider (CSP).

Reported study findings include:

  • strengths that operators can exploit to sell to SMEs.
  • security portfolio design and the need to build awareness of cyber-security solutions.
  • case studies of two operators that offer security-as-a-service (SECaaS) solutions – Deutsche Telekom (Europe) and M1 (Singapore).

Telecom operators should build their security offers around 6 key principles.

  1. Leverage their inherent advantages of scale and connectivity footprint.
  2. Prioritize ease of use. If security solutions are difficult to use, SMEs will either not buy them, or will make lots of customer care calls that will deplete profit margins.
  3. Demonstrate the value of solutions. Many SMEs need to see demonstrable – rather than theoretical – value before purchasing. A free customer trial that illustrates the unique threats to which they are subject is the best way to drive willingness to pay.
  4. Provide a rich portfolio. SECaaS value propositions need a rich portfolio of services beginning with a firewall and evolving towards IDS/IPS, DDoS protection, malware detection and other services, including cyber insurance for when attacks get through.
  5. Educate customers. CSPs need to lead in providing customer education on the unique ways in which cyber threats put SMEs at risk. CSPs should actively support cyber awareness programs run by national, regional and local government as a new, and potentially important, channel to market.
  6. Use a highly software-controlled infrastructure platform. This is critical for delivering SECaaS to SMEs as it should enable faster instantiation and updating of services.

"Cyber security solutions offer a promising area of growth. Network operators will need to make solutions easy to use, tightly manage costs and help build demand with SMEs if they are to be successful in this market. Most telecoms operators have a very low share of the SME security market – they have a significant opportunity to increase their share," said Tom Rebbeck, research director, at Analysys Mason.

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