Partners, Analysts: Here's How Cisco Will Win 30 Percent Of The Enterprise Security Market

Cisco Systems makes no secret of its plans to stake large claims in the cloud and software markets, but its recent moves in the security space have some partners and analysts thinking it is poised to take a big chunk of that space as well.

Cisco's goal is to nab 20 percent to 30 percent of the $25 billion enterprise security infrastructure market over time, where it currently holds a 9 percent market share, according to a recent report from UBS analyst Amitabh Passi. The report also notes that Cisco CEO Chuck Robbins has asked former CEO and current Executive Chairman John Chambers to lead the vendor's security mandate.

[Related: Chambers' New Security-Focused Role At Cisco Seen As 'Critical' To Success]

"If you would have asked me a year ago if they could own 30 percent market share in the security space, I would have said, 'not a chance' -- but I think with the acquisitions they've made, the integrations they've been able to make with them, they're in a position where they can really do this," said Randy Olsson, vice president of Strategic Technology Group, Network and Security at Presidio, a Cisco partner ranked No. 21 on the 2015 CRN Solution Provider 500 list. "We've already been seeing that kind of growth with Cisco in our business."

Although Presidio declined to provide specifics, the company is seeing "well into double-digit" growth in its Cisco security business, while fellow Cisco partner Sentinel Technologies has witnessed a whopping 170 percent growth in its Cisco security business.

"They have a much better product offering than ever before, a much better complete portfolio and at a time when the market really needs it," said Robert Keblusek, CTO at Downers Grove, Ill.-based Sentinel Technologies, ranked No. 128 on the 2015 CRN Solution Provider 500. "Their solutions have a lot more marketability today. The acquisition of SourceFire brought quite a bit to the table and I know they're working through product development and other things bringing it on board that's been very well received within our customer base."

Solution providers and industry analysts say Cisco's acquisition strategy and simplifying the landscape through embedding networking and security together could make Cisco the dominant player in security. Passi said Cisco analysis shows the average large enterprise has more than 50 security vendors, which can be extremely difficult to manage.

The San Jose, Calif.-based company believes the security industry will transition over the next few years from having dozens of point vendors to companies that can provide an architectural approach that Cisco is driving toward, analysts say.

Passi in the report expresses skepticism that Cisco can grow its security business by the $6 billion-plus in revenue by 2018 it would take to own 20 percent of the enterprise security infrastructure market, the lower end of the company's goal.

That said, UBS' current forecast for 5 percent growth in Cisco's security business "appears very conservative," Passi said, noting the company's stated goal is for 10 percent to 15 percent growth.

Passi also identified a number of fast-growing areas where Cisco could expand its presence in the security market, including identity access management, security information and event management, data loss prevention and application security testing. Other large markets seeing moderate growth might also make interesting growth opportunities for Cisco, including endpoint protection, secure Web and email gateways and even firewalls, Passi said in the report.

"The integrated security strategy seems pretty wise on Cisco's part; it's a compelling value proposition by having everything baked in," said Nolan Greene, an IDC research analyst, in an interview with CRN. "We're seeing the consequences of security breaches on corporate networks especially in public-facing businesses. The high-profile retail breaches -- Target, Home Depot, we saw at Sony -- there is this feeling that there's so many different security tools and they work disparately, so would it be more effective if we could tie them together."

Although analysts and partners believe security consolidation will occur, there won't be just one vendor supplying everything.

"I really think we've seen it proven that even though we have all these different vendors and all these different products, everyone still gets hacked," said Greg Kushto, director of security practice for Force 3, a Crofton, Md.-based network security solution provider and Cisco partner. "What people are thinking is, 'Why not consolidate that into maybe two or three vendors compared to 10 vendors?' "

Kushto said it's easier for organizations to operate when they are able to do multiple functions with the same GUIs, interface or even manufacturer. Having fewer security vendors is also a major cost savings for companies and there's less of a learning curve.

"You're able to make the products work together natively; it's much easier to figure out and that's really going to help drive down costs," said Kushto. "If you've got 20 different vendors with security products, you're going need that many people on staff. You're going to need a person if not multiple people trained on each one of those products."

Cisco has noticeably stepped up its rhetoric around security this year. At Cisco Partner Summit in April the company unveiled the full integration of its ACI software-defined networking technology with its Firepower Next Generation Intrusion Prevention System, a combination that will provide automated threat protection in the data center.

In June, Cisco revealed that it was blanketing security "everywhere" throughout the extended network by adding more sensors to increase visibility, more control points to strengthen enforcement, and spreading advanced threat protection across the infrastructure to reduce detection and response time when an attack occurs. Cisco said by integrating security it would deliver better control and greater threat visibility into the farthest reaches of the enterprise and global service provider infrastructures --- from the data center out to endpoints, branch offices and the cloud --- while at the same time giving partners new ways to generate revenue through hardware, software and services.

Partners said security competitors such as Palo Alto Networks, Check Point Software Technologies and Fortinet are not able to compete against Cisco's architecture.

"[Cisco is] able to have that conversation that security-specific vendors can't have," said Kushto. "Those vendors conversations are, 'Buy this endpoint and put it here, then hopefully all this good security stuff happens' -- Cisco is really able for all their products to say, 'We're not just a point in time, we're really part of a full architecture that you know you can trust to do the best for security."

Check Point and Fortinet declined to comment. Palo Alto did not respond to requests for comment as of press time.

Cisco's security acquisition strategy and implementation over the past several years is another main driver for the company. In 2013, the networking giant purchased Sourcefire for $2.7 billion and has since integrated it successfully with its product line, according to partners.

Partners also highlighted Cisco's recent move to acquire cloud security specialist OpenDNS for $635 million and its partnership with Lancope as ways to fill in security gaps.

Cisco recently integrated Lancope's StealthWatch technology into its entire network infrastructure to increase visibility and control via the network as a "sensor and enforcer."

"The partnerships they're making like with Lancope really help bring about total solutions around security rather than just point solutions for security," said Matt Duncan, director of GDT Labs at General Datatech (GDT), a Cisco Gold partner ranked No. 45 on the 2015 CRN Solution Provider 500. "Lancope has a product suite that Cisco doesn't have today that provides a bunch of feature functionalities. … I very much see OpenDNS and some of these initiatives as being steps in the right direction."

Partners and analysts did say there are several obstacles that could come into play to stop the networking giant from reaching its 30 percent goal, including some enterprises that will want to search out best-of-breed solutions.

"There are IT shops that are going to shop around and meticulously compare specs for the best-of-breed solutions, so they're go to as many vendors as possible so they have the best solution set for their specific business needs," said IDC's Greene.

Some enterprises simply don't want to partner with the "big guy" in the space or will want to pursue pure security vendors, some solution providers said.

"When you get enterprises that have a strong security team, I see the challenges in that they avoid Cisco because Cisco's not a security vendor and they want products from vendors who do nothing but security," said Duncan. "If it's not all security all the time, they don't want to deal with the vendor."

Although there are some doubts, solution providers say having the networking footprint and more than $54 billion in its war chest, Cisco is poised to be a dominant leader in the security marketplace.

"Having as much as you can have all in one place, that's a great thing," said IDC's Greene. "The caveat to that is that it all has to work. So that's what Cisco has to prove."

This article originally appeared as an exclusive on the CRN Tech News App for iOS and Windows 8.

PUBLISHED JULY 28, 2015