As experienced partners know, a vendor with a channel leader seldom guarantees a channel friendly approach -- some are well-intentioned but powerless while others play the role of professional apologists.
Either way, effective channel leaders require channel-centric vendors to ensure the ecosystem thrives. And that starts at the top.
Hence why the recent appointment of Geoff Swaine as new vice president of Asia Pacific and Japan (APJ) at CrowdStrike, sends a subtle but important signal that in this go-to-market strategy, indirect business is important.
In replacing Andrew Littleproud who retired in November, Swaine’s promotion followed positions running regional alliances in addition to strengthening global cloud and technology ecosystems and building program blueprints.
“Our business in APJ is very reliant on partners and that spans our resellers, system integrators, cloud alliance partners and distributors,” said Swaine, widely credited with accelerating the vendor’s channel play across the region from 2017 onwards.
“The ecosystem is the future for CrowdStrike. If you look at our history, we started out as a services business with some tools which became our version one product, which then evolved over time and eventually developed in our cloud platform and security modules.”
Whether XDR (extended detection and response) or zero-trust, Swaine said the next evolution of the ecosystem is centred on bringing emerging technologies together and integrating them into solutions for the betterment of customers -- evident through the Falcon platform.
“And that takes an entire ecosystem of resellers, system integrators and solution providers delivering that value,” he added.
Spearheading Swaine’s vision of ecosystem excellence is Jon Fox, who joined the business as senior channel director of APJ in early 2022. This type of synergy and alignment demonstrates a culture of partnering that extends beyond the corridors of channel chief power.
“What we can do and what we will do in this market will be highly leveraged through our partner base and Jon’s business,” Swaine said. “We have the knowledge and know what matters in terms of leveraging efficiencies, solving problems and understanding the strengths of the channel. Our approach is built in rather than built on.”
Upon analysis, such an approach is playing out in the numbers.
Between the first and second quarters of FY23, the vendor’s partner sourced business grew by 62 per cent across APJ, with overall revenue through the channel increasing by 36 per cent in parallel. In addition, partners sourced more than 140 new logos during the second quarter alone.
Partner reliance increases
According to IDC, spending on security solutions and services exceeded $31 billion across Asia Pacific in 2022, representing an increase of 15.1 per cent from 2021.
“The recent spate of cyber attacks preceding the Russia-Ukraine war has made the organisations in the region take notice and invest in tools to plug existing gaps,” documented Vinay Gupta, research director at IDC. "These investments must not be knee-jerk reactive purchases, rather should be planned as long-term strategic investments.”
Gupta said the rise in cyber attacks, increasing demand for a hybrid working model, and ensuring data privacy and regulatory compliances are tailwinds to investment. Also, effective threat management has become increasingly important as enterprises move toward digital sovereignty.
“When a breach happens, there’s a great locus of action that’s created but it also allows us to understand how we can actually manage the situation in general and how operational processes can be improved,” Swaine explained.
In response, Swaine cited a “huge uptick” in Falcon Complete as well as managed services delivered by the channel as customers turn to experience and expertise amid increased threat levels. The pendulum of power is shifting as customers understand the value of leveraging an MSP (managed service provider) or GSI (global system integrator) for security support and guidance.
“That’s been a big turn,” Swaine acknowledged. “Customers are struggling to stay on top of the changing landscape, which is so broad as attacks come in from many different places. There’s even an element of just being able to be aware of what to do in each scenario and what technologies are available, as well as the knowledge to integrate other solutions.”
Of note to the channel, services represented the largest category of investment among security markets in the region, accounting for almost half of cyber spending and growing at a five-year compound annual growth rate of 16 per cent.
As noted by IDC, the security services market is dominated by managed services -- constituting around 40 per cent of the security services spending throughout the forecast -- followed by consulting services and integration services. Within that context, the gap between MSPs and MSSPs (managed security service provider) continues to widen.
“You can see the difference in the expertise, MSSPs are drawing on specialisation from defence and security backgrounds and that continues to be a primary focus,” Swaine said.
“Whereas MSPs are generally recruiting people from infrastructure or desktop management backgrounds, that carry a breadth of services capabilities. But you can’t ignore security and borrowing a phrase I heard recently, ‘security is job zero, not job one’.”
For MSPs offering only managed infrastructure and desktop solutions, Swaine advocated the importance of expanding into security as customer demands increase.
“We’re seeing this play out locally and globally,” he outlined. “The rise of the large service providers, big consulting houses, telcos and GGIs is happening and they possess a broad portfolio of managed security services. Some partners are also driving down in to mid-market and SMB and that plays into the power of the platform we have.
“We have the ability to bring the learnings and knowledge from working in the most complicated large customer environments and distill that down into something that’s actually usable for a small business owner or a mature corporate organisation.”
The ability to effectively scale up into enterprise and scale down into mid-market and SMB stems from CrowdStrike’s approach of embracing “people centric and machine orientated intelligence” -- combining the power of both to create workable solutions across all company segments.
“We’ve also worked hard to bolster our offerings to ensure that MSPs are in a great position to target very small customers with an end-to-end solution,” Swaine stated. “The commercial reality is different to the technology reality of course but we continue to right-size our products for each sector.
“We’ve packaged the platform to provide full enterprise modules as well as Falcon Go, which is tailored to the smaller end of town and focuses more on detection and prevention.”
To capitalise on the potential at both ends of the customer spectrum, Swaine said scalability must be achieved in technology, services and partnering.
Gunning for growth
Tasked with driving growth and expansion across the region, Swaine will be directed by his desire to prioritise internal culture, as well as strengthening alignment to the corporate mission and growing market share through partnership.
Such values will be translated into short-term execution and building an immediate plan to stabilise the business under the new leadership structure.
“We’ll use a window of the next six months to build a solid foundation and then develop our three-year plan and continue that rolling progression,” Swaine said.
Geographically speaking, Swaine acknowledged the “strong growth” delivered by expanding teams across Southeast Asia, North Asia and India, amid plans to continue “leveraging burgeoning market segments and digital native businesses”.
“We’re ramping up engagement with innovative companies and building reach in those spaces,” Swaine said. “Our teams have been standout in terms of delivering growth for some time which is partly due to economic growth but also the way they have tackled the market and delivered our value proposition.”
By close of the vendor's second quarter in FY23, the number of employees in APJ increased 57 per cent year-over-year to over 950 employees, largely to service 55 per cent more customers across the region.
“Australia and New Zealand continues to be consistent in delivering predictable and straight line year-over-year growth,” Swaine added. “This is a mature market and the lighthouse accounts that we secured early on have helped us continue to grow in a very deliberate way.
“I’m also excited by the investments we’ve been making in Japan during the past 12 months. We have a leader in Isao Obazawa who has had a very strong impact in a market undergoing transformation -- we’ve made big investments and partners are also capitalising and emulating our success.”