If Only Kodak and Nokia Resellers Had Known

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A short story that doesn’t have to be yours

Prologue

You’re the captain of a massive container ship filled with servers, hard drives, and mounting racks, making its way through stormy waters. The heavy cargo makes it hard for the ship to float and for you to navigate it safely to its destination. Suddenly, you notice a huge boulder ahead. You try to steer away, but the heavy cargo makes it difficult, and it seems like impact is inevitable. As you sound the alarm, you jump into action without wasting a second and start packing your single lifeboat with all the appliances you can get your hands on. Your team looks at you scared and puzzled, but you’re positive you can save everything; yourself, your team, and all the appliances ignoring the fact that they were the ones that led to the collision in the first place.

Dramatic? Yes. Ridiculous? Not really 

You’re likely facing this dilemma while reading this blog post. Will you act differently? 

A good 50-90% of your revenue comes from reselling appliance-based point solutions. You’re operating on slim margins, and it’s becoming more and more challenging to differentiate yourself and explain the value you bring to your customers. You find it hard to hire top engineers and sales professionals because they’re busy selling cloud solutions and future-proofing their careers.  

You see the storm waves rising. You feel the steering wheel getting heavier by the minute.

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Let’s pause here and look at the facts

On November 16th, 2021, Riverbed Technology announced filing for Chapter 11 Bankruptcy. Check Point Software Technologies was recently pushed out of the Nasdaq 100 Index. These events happen while the network security business is skyrocketing, and the competitors are reaching an all-time high in market valuation and revenue growth. What do these companies have in common? First, they never really embraced the convergence of networking and network security. Secondly, their solutions are not cloud-delivered as a service but are still heavily dependent on edge appliances, physical or virtual. While most other pure SD-WAN and network acceleration companies were acquired (VeloCloud by VMware, CloudGenix by PAN, Viptela by Cisco) as a part of a SASE play, Riverbed stood by itself as an appliance-based point solution company. While most leading security vendors made aggressive moves towards SASE convergence or integration onto the cloud (PAN, Fortinet, VMware, Cisco), Check Point stayed away from networking and was late to launch cloud-delivered solutions.

These are all obvious indications, warning signs, if you will, of a fundamental shift in IT architectures. Ignoring these signs is equivalent to loading your lifeboat with appliances while riding 100 feet waves. You, as a reseller or a service provider, can’t save yesterday’s technology. Evolving is no longer the privilege of the brave and innovative but necessary for any business looking to remain relevant.

You can choose how your business story unfolds. Consider the following one.

A day in the life of a cloud-native SASE reseller

Resellers and service providers of cloud-native SASE solutions help their customers transform their networks into agile, flexible, and maintenance-free environments. They bring to the table a highly differentiated offering that enterprise customers going through digital transformation deeply appreciate.

These partners generate recurring revenues that future-proof their financials. They enjoy the rewards of buying a managed service just like you recommend to your customers. Their SASE Cloud provider takes care of the network, hires the right personnel, maintains, patches, and updates everything according to the industry’s best practices. The provider releases new features and capabilities that are available to their customers at the flip of a switch and is accountable for all the network and security components of its service. These SASE partners have ‘one throat to choke’ and benefit from unmatched SLA.

On their SASE deals, SASE partners make high margins and add their professional and managed services on top for even more attractive blended margins.

Their employees master modern technologies, taking pride in driving this revolution rather than trying to convince everyone, themselves included, that nothing is changing.

And their customers? They will never go back to appliance-based solutions. Thanks to their trusted partners, they now enjoy a scalable and resilient cloud-native network and a full security stack delivered as a cloud service. They are becoming SASE experts and thought leaders, and some of them even started their own blogs.

But most importantly, they weathered the storm. Their ships are safe, and so is everyone on them.

The Way Forward: How to Win in a Changing Business Environment  

Cloud-delivered solutions are winning. Cloud datacenters replace the world’s on-premises data centers. Cloud application replaced most of our on-prem applications. The 2019 COVID outbreak accelerated cloud and SASE adoption, as enterprises moved to work-from-anywhere.

The SASE revolution is here, as defined by the world’s leading analysts, changing networking and network security for good. 2022-2025 is the transition period to mainstream adoption of SASE among enterprise customers ¹

Our music is in the cloud. No more CDs. MP3 players are no longer needed. We have smartphones. Cloud and convergence are revolutionizing the way we use technology. Why would network and network security be any different? They are not. These shifts in the market don’t happen overnight. Business managers that recognize them, must adapt to ensure the relevancy and profitability of their companies.

Not all appliances will disappear. Some customers, in some cases, will still choose them. But, they represent the past. In the same way that CDs, Kodak films, and Nokia (not so smart) phones are still available, edge appliances will stick around. But do you want your business to be recognized by these legacy solutions? Do you want their success or failure to determine yours?

Be brave enough to write your own story.

 

 

 

1 Gartner, “Hype Cycle for Enterprise Networking ” Andrew Lerner. October 11, 2021   

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