Cisco Security Fuels Partner Sales That Are 'Beyond Hypergrowth'

Cisco's security business is booming for channel partners as 2016 comes to a close, with many partners reporting triple-digit growth in Cisco Security revenues this year.

"Our Cisco security sales and managed services were up 100 to 200 percent in 2016. It's definitely beyond hypergrowth right now," said Ben Johnson, CEO of Griffin, Ga.-based Liberty Tech. "With Cisco's security architecture – the cloud with OpenDNS, now Umbrella, AMP (Advanced Malware Protection) built into everything including the Meraki MX and AMP for Endpoints – Cisco's really enabling managed security service providers to build a simple-to-manage and highly, highly effective security architecture. We're actively rolling that out now to all of our managed services clients … it's the simplest security pitch that I have seen from any vendor, ever."

Mike Greaney, CEO of Crofton, Md.-based Force 3, a wholly owned subsidiary of Sirius Computer Solutions, said his company would nearly triple its Cisco security sales in 2016.

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"Cisco has taken more of a holistic approach whereas some of their competitors out there only competed in a specific slice of that world," said Greaney, who company is ranked No. 78 on CRN's 2016 Solution Provider 500 (SP500) list. "Cisco has acquired their way into a position of strength and in the few areas they don’t have [a solution], they have a really strong ecosystem of OEM partners that we've benefited from as well such as Splunk."

Cisco's enhanced security business is also driving network refresh opportunities, according to partners.

"They're leveraging their strength in the network and doing it the right way. Security is driving everything right now. We are seeing that having a positive impact on the networking side of our business as well," Greaney said.

Sentinel Technologies, a Downers Grove, Ill.-based solution provider ranked No. 131 on CRN's SP500 , witnessed nearly a 200 percent spike in its Cisco security business quarter-over-quarter during Cisco second fiscal quarter, which ended Oct.29.

Sentinel's CTO Robert Keblusek said, "We're really packaging up the Cisco security architecture, which is really 95 percent of our security protection business from a product standpoint, and we're wrapping that into services, project services, recurring services and our security operations center and those are really resonating with customers."

Cisco's security business blossomed into a $2 billion annual run rate in this year with no hurdles in sight in 2017. The company's strategy of embedding its security solutions into the network, while at the same time heavily incentivizing channel partners around security sales, has led to four consecutive quarters of double-digit growth in security.

"Our competitive position in security is growing stronger as our integrated architecture approach, and best-of-breed portfolio resonates with our customers," said Cisco CEO Chuck Robbins, during the company's recent quarterly earnings call in November. "In fact, we're the only company with security product revenue exceeding a $2 billion annualized run rate with double-digit growth."

Partners said Cisco's ability to provide an end-to-end security and network architecture gives customers the ability to drastically cut down the number of security vendor products inside their organization, which can be difficult to manage.

Keblusek with Cisco's full suite of security products tied with the networking giant's $180 billion network switching and routing installed base, is providing the best "easy button" for security in the market.

"Customers lack a really good, easy button for security – it really doesn’t exist – but when you start to look at it architecturally and where and what you want to protect, in most areas Cisco now has a category-leading product and that has helped us to have a stronger conversation around a single vendor," said Keblusek. "When we combine that with our managed services and our security operations centers, that helps fill the gap of the customer's lack of having an in-depth staff working 24/7 – 365 days [a year] around security."

Cisco unveiled several new or enhanced security products and incentive programs in 2016 and has acquired four security vendors over the past 20 months, including its acquisition of cloud access security broker CloudLock in June.

CEO Robbins recently said Cisco doesn't plan to slow down its security M&A in 2017. Partners also said that if President-elect Donald Trump follows through with his plans tax repatriation plan, Cisco security business could expand.

Phil Mogavero, vice president of Advanced Technology Group network solutions and regional chief technology officer at El Segundo, Calif.-based PCM, ranked No. 28 on CRN's SP500 , said PCM's overall Cisco sales increased from $130 million in 2013 to well over $260 million this year, in large part due to an uptick in security.

"We're just scratching the surface right now with Cisco security," said Mogavero, adding that he expects PCM's Cisco security sales to grow a minimum of 30 percent in 2017.

"A year ago, all we had to sell was Cisco ASA (Adaptive Security Appliance), now you got Cisco Firepower and then you got AMP. I see Cisco and Palo Alto [Networks] really eating into the market share from the legacy antivirus companies -- Symantec especially," he said. "We also have Cisco Stealthwatch, OpenDNS and the list goes on and on."

Cisco has more than doubled its advanced malware protection (AMP) customers from 8,000 in November 2015 to 17,000 as of August 2016, according to research firm UBS. The network leader gained its advanced malware and IPS capabilities in 2013 with the acquisition of Sourcefire in 2013 for $2.7 billion.

As of October, the networking giant has an install base of 275,000 customers for its ASA firewalls, which are integrated with Radware's DDoS products. Cisco employs a total of 5,000 full-time security employees.

Many channel partners have also started selling security with Cisco Meraki. Cisco is allowing partners to white-label cloud-based managed network services through Meraki, which is now a $1 billion business for the company.

Cisco's Meraki portfolio including switches, security appliances, phones, wireless LAN, security cameras and mobility management. "We are finding that [Meraki security] fits a lot more environments where they want a fairly robust and easy-to-deploy product that can be managed centrally, which is a nice play for that," said Sentinel's Keblusek.

He added: "When you're looking at their ISRs and ASAs, there's some robustness there, but in many cases, customers don’t need those bells and whistles; They benefit more from an easier-to-deploy, consistent experience from a cloud-control product like Meraki, and we're having a lot of success with it."