It’s been another fascinating year in DR and backup. This blog reflects on the predictions we made back in December 2022 and our observations on how the market evolved over the course of the year.
CISOs influence the cyber security market as their numbers grow and responsibilities evolve
Last year, we forecast that with the growing prominence of the role of CISO, security teams would assume responsibility for DR and backup from IT operations. That has certainly been the case for many organisations this year but we are also seeing further evolution of the CISO’s role that is set to shape the broader cyber security market in 2024.
With smaller and medium size organisations (SMEs) facing a much greater threat level than ever before, there’s been large-scale hiring of CISOs to address the issue. One result of this is a changed dynamic in the conversations we’re having with SMEs, away from features and functionality of a DR solution and towards a more strategic discussion around recovery from a ransomware attack or cyber incident, together with detailed scenario planning.
CISOs are also becoming much more important figures within SMEs. In some organisations, the CISO is now on a par with the CIO or CTO and reports directly to the CEO or CFO. Having parity with CIO and CTO roles shows how seriously SMEs are taking cyber security and that they’re willing to dedicate significant budgets accordingly.
With this changing dynamic of the cyber security leadership landscape within organisations, we’re also seeing the emergence of another trend. Increasingly, we’re entering into conversations with major IT consulting firms who are interested in our specific immutable backup speciality. This validates a prediction we made last year in relation to demand for specific services from niche providers to form part of a comprehensive cyber security package. The agility of specialist providers like Assured is one of the main reasons these consulting firms are expressing interest in our services.
For VARs, the trend towards managed services continues driven by a desire to generate greater revenue
Going into 2023, we noted that VARs were increasingly moving towards managed services as the market shifted towards a consumption model that allows businesses to buy and consume cloud and IT services on a usage basis. We expect that trend to accelerate in the year ahead, primarily driven by the desire to increase company value. Private companies are a lot more valuable if they have high monthly recurring revenue (MRR).
This trend can also be observed in the distributor community, many of which are offering value-added services, including consulting to generate MRR. Now, some of these companies are repositioning themselves as ‘value-added distributors’.
Integrators are also focusing on MRR, which can be seen in the way they package big ticket orders. For example, in most cases, a £100m order is commonly packaged as a three-year service, as opposed to a one-off deal.
Reinforcing the growing emphasis on MRR across the sector, CDW have announced five key pillars of key revenue generators this year. Managed services and recurring revenue are at the forefront of those.
We’re also seeing enormous traction in the white label space and we anticipate this trend will continue in 2024 – particularly in the US. This is being driven by a desire by companies to stick to their areas of core expertise and avoid the need to upskill employees. As an example, ePlus, a US based VAR, were offering a Rubrik managed service but realised the advantages of offering Assured as a white label service and are now reaping the benefits.
Meanwhile, the trend towards customers moving from hardware ownership to cloud and consumption models will accelerate in 2024 as companies increasingly turn away from depreciating assets.
Robust DR and backup services will play an increasingly important role in securing cyber insurance
Cyber insurance is a must have for many organisations and increasingly, it’s essential for tender submissions. However, it can be difficult to secure as insurers demand high levels of resilience from customers to reduce the high-risk exposure to themselves.
We’re now seeing the market begin to respond to challenges related to cyber insurance and this trend is likely to gather pace in the year ahead. In September, global professional services firm AON announced a partnership with Rubrik to help companies maintain cyber resiliency. In entering into this partnership, AON recognises the importance of cyber insurance to its customers and intends to make companies more insurable against risk.
In 2023 we’ve seen the shift with more customers coming to us to request audit reports or insurance questionnaires to provide validation to insurers that their backups are immutable. Businesses are looking to vendors and MSPs as trusted third parties that can guarantee their data protection and security.
It’s very likely that in the medium term, a robust DR and backup service will become a prerequisite for securing cyber insurance.
Looking back to predict the future
It's always interesting to look back at the expectations we may have had for the market at the start of the year and compare them with what we see now and what we anticipate for 2024. Trends become established over time and taking into account the market observations from the last year provides a solid rationale for predicting what we anticipate in the year ahead. With ransomware attacks continuing unabated, and a shift in the nature of the primary targets towards smaller and medium-sized organisations, there will continue to be growing demand for immutable backup solutions that can minimise the impact of an attack in 2024.
