Exclusive: New NPD Group data helps VARs navigate complex security landscape

Canadian value added resellers and managed service providers are well-aware of the daily IT security challenges plaguing businesses from coast to coast, but deciding which vendor to partner with to address those challenges is not as cut and dried.

New data from NPD Group suggests what many have likely suspected – software, and security software in particular, is on the rise. But what might turn heads are the multiple paths channel partners can take to grow or expand their security practice, and what it means to commit to one vendor over another.

“You can’t work with all of them, but the choice of which ones to work with are largely indicated by where you find them on the chart and where you find them in your install base, or your targeted install base,” says Michael O’Neil, an IT analyst working closely with NPD to publish research about Canada’s IT security market.

Chart courtesy NPD Group.

That chart (see above) is NPD’s “Velocity Matrix” representing distributor sales-out data for security software in Canada during a 12-month period starting April 1, 2018 ending March 31, 2019. Each coloured box represents a group of vendors impacting the security software market in different ways.

Pace setters are organizations with high head counts and solutions that yield steady growth, explains O’Neil. They might not offer much in terms of differentiation, but they help channel partners grow in a security portfolio that’s attached to widespread demand. Established players to the left have a significant presence in current accounts, but aren’t driving a lot of growth. Looking for ways to hook into high-growth segments of security? Consider a disruptor.

“Disruptors are usually smaller firms exhibiting greater than average market growth,” says O’Neil. “They give you different options to expand your relevance and service to your clients.”


  • NPD Group shows a sharp 18 per cent increase in the number of security software solutions sold by distributors between 2017 and 2018. That’s helping fuel the 16 per cent growth experienced by commercial software overall during the same time period.
  • Hardware only experienced a 5 per cent growth from 2017 to 2018, but still makes up 80 per cent of the total market.
  • Software accounts for approximately 20 per cent of total distribution revenue, and NPD says most of that growth is thanks to the heavy lifting by small value-added resellers. They account for more than half of all aforementioned growth.
  • Data loss prevention and endpoint protection showed the most growth out of all security software segments at more than 25 per cent.

Seekers are an interesting category.

“You usually avoid the bottom left quadrant. Some seekers are seeking an exit to this business, but some are seeking to penetrate the business in other ways,” indicates O’Neil. “For some channel members, they might find interesting opportunities there. They might be partners that are building a business that needs a compelling niche or story in a growth market. And if there is a potential fit between a seeker’s technology and a channel partner’s requirement, that partner might be able to negotiate more supportive agreements with firms in this quadrant. A channel member that has a good window on an important market opportunity might be able to deal with seekers differently than the firms in opposite quadrants. Channel partners looking at new market opportunities might want to look at seekers.”

Mobia Technology Innovations, a Trend Micro partner based in Nova Scotia, has been partnering with Trend Micro for the past three years. Trend Micro, a seeker that’s dipping its toes into the established box, is impressing partners by leaning on its more than 30 years of experience to keep pace with cutting-edge technology around advanced threat intelligence and protection, says Mobia’s president Michael Reeves. Its container security solution in particular, which Trend Micro updated recently to get all of the individual components working better together, is an impressive set of end-to-end security solutions, adds Reeves.

“We do a lot of work in the DevOps spaces, and containers in particular. And in the last few years, with the changes in IT regarding DevOps and the speed in which we build applications now, you’ve got to take a more inside-out approach to how you look at your security posture in your business,” he says. “What Trend Micro does very well is they have this foundational skill and capability within deep security, and they have some unique elements in the marketplace around CI/CD pipelines and containers, which supports that newer style of IT and DevOps. A lot of companies are trying to come up with a strategy for this.”

Mobia’s president Michael Reeves says he’s impressed with Trend Micro’s hybrid cloud security solutions.

Container adoption in Canada is increasingly visible among tech startups, and large companies that have the wherewithal to innovate and maintain a day-to-day business. SMBs and smaller enterprises, not so much, says Reeves. But this has little to do with the technology’s legitimacy – more than 25 per cent of environments currently use containerized applications, according to the 2019 State of Multicloud report published by Turbonomic. Survey respondents suggest that number is expected to double by 2021. Reeves points the finger at a market that is entrenched in old ways.

“These organizations have a lot of technical debt and are held back by some structural and cultural issues that prevent them from adopting a DevOps mentality.”

But containers can become an SMB’s best friend. As more Canadian companies look at cloud platforms to host their software investments, they’ll need to take a hard look at containers and determine if its worth the investment and the additional security measures. The extra speed can come with consequences, but those security controls have improved significantly over the last two years, and Mobia has kept up with those advancements – it’s currently a gold partner for Trend Micro’s hybrid cloud security portfolio.

For a firm like Mobia that’s spent the last three years becoming experts in this field, a seeker was the very thing they needed.

Not your average distributor

Distributors are doing their part to address the growing number of security issues.

Roy Rivers, vice-president of sales for D&H Canada, says the software portion of their business is growing, and securing cloud infrastructures seems top of mind for many.

“Small organizations absolutely face the same threats that enterprises do,” he says.

Established players like Cisco are deploying a diverse suite of security solutions, shifting away from just single products, Rivers adds. He acknowledged their work with Aruba as well.

“Aruba has really specialized in network security,” he says.

Sophos and SonicWall, indicates Rivers, have fueled their growth in the cloud security monitoring space.

Axcient, a firm offering business availability and cloud migration solutions for managed service providers, announced earlier this month an agreement with D&H Distribution, allowing the distributor to offer Axcient’s suite of solutions to its channel of MSPs and solution providers who serve the SMB market.

“We’re also going to start rolling out white-labeled security services like penetration testing, web app testing, IT security consulting, and looking to provide our resellers and small and medium VARS better support for their overall needs and to take them to their customers. There are not enough fully supported solutions aimed at the small and medium players,” he says.

Ali Naqvi, commercial technology industry analyst for NPD, praised the work distributors are doing.

“They’re going way beyond to provide complete solutions, and making sure end users of the B2B world get what they need,” he says.

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Alex Coop
Alex Coophttp://www.itwc.ca
Former Editorial Director for IT World Canada and its sister publications.

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