This guest post was contributed by Chad Cardenas, CEO and Founder of The Syndicate Group (TSG)
For venture capital firms and tech startups alike, 2023 has been a complicated year.
Amid trends of sparse funding and an industry-wide focus on hot technologies like artificial intelligence and blockchain, it has been difficult for many growing companies to secure the support and capital of VCs within the last calendar year. This has been particularly true for many cybersecurity organizations, that despite continuing to bring innovative systems and technology to the table, have struggled to capture the necessary attention of VCs and investors.
However, as we approach the new year, things are already beginning to shift. Looking ahead, it is certain that the demand and appetite for cybersecurity technology is not going anywhere, and as these companies regain the attention of important investors, the channel will play a larger and more important role than ever before.
Continued Demand for Cyber Solutions
Despite the hype surrounding trending technology like AI, we’re going to see a sustained focus in 2024 on key areas of enterprise technology like data, cloud, network, and cybersecurity infrastructure. While there is no doubt about the disruptive nature of trends like AI, the dominance they’ve had in the tech and VC sectors is not permanent.
The cybersecurity sector in particular is not going anywhere; enterprises rely too heavily on these tools to maintain safe and secure business operations. As organizations across a multitude of industries continue to update and revise the infrastructure needed to manage risk and prevent cyberattacks in today’s ever-evolving threat landscape, the cybersecurity industry will continue to flourish.
Crowding in the Cyber Sector Leads to a Shakeout
Although the cyber sector has always been crowded, we saw an increasingly saturated market in 2023. As a result, 2024 will likely bring another shakeout and further consolidation of the cyber sector. A shakeout, or a widespread consolidation event in an industry that follows a period of massive expansion, allows the strongest companies in the industry to acquire or eliminate competitors and ensure they maintain their place in the market. This prevents these companies from facing competition from other companies with similar service offerings.
In 2024, the ongoing process of growth and evolution within the cybersecurity industry will bring about a push for these organizations to explore new avenues of growth. In order to establish market awareness and differentiation, it will be critical for companies to identify and bring awareness to their unique cyber offerings to set them apart from the crowd and avoid being negatively impacted by this consolidation.
The Channel’s Role
As this inevitable consolidation occurs, the channel will play a critical role. In addition to facilitating the differentiation that will occur, the channel will also enhance these organizations’ go-to-market strategies. We’re already seeing indications that companies are making big bets on channel as they work to streamline and operate more efficiently, and 2024 will bring an increased reliance on the channel and a growing realization that specialized integrators and resellers will serve prominent roles as companies implement changes and updates to their overall cyber defense infrastructure.
At one point before it was widely understood or fully developed, the channel was seen as second-class. Now, it is a key element to a successful go-to-market strategy for cyber companies. Throughout 2023, the industry has already seen an increased dependency on the channel from corporate tech leaders and CISOs; the channel is now more valuable to CXOs and cybersecurity companies than at any time in the last 30 years. As we head into the new year, we can expect to see more and more leading cyber organizations looking to the channel to support ongoing growth.