Consolidation in partner ecosystem among channel trends CrowdStrike is noticing

“Partners are looking at the line card of vendors they work with, and just like end customers are saying they want to consolidate to platforms, partners are now saying the same thing to mirror and match what the market wants,” says Daniel Bernard, Chief Business Officer at CrowdStrike.

In a conversation with CRN Asia, Daniel Bernard, Chief Business Officer at CrowdStrike shared that while the cybersecurity vendor continues to see greater success with its partners globally, there are three trends which is starting to have an impact on the global partner ecosystem.

First, Bernard shared that there is now a broader emphasis on consolidation and focus at the partner level. He explained that partners are looking at the line card of vendors they work with, and just like the end customers that are looking to consolidate to platforms, the partners are now considering the same thing to mirror and match what the market wants.

“I think they're being a lot more selective on where they spend their time and what they bring to market from a customer perspective. The org chart is starting to look more like the business plan. For most of the partners in our ecosystem, we are their number one or number two vendor by business line. Now, increasingly what I'm seeing over the past year are partners creating dedicated practices or dedicated business units that are CrowdStrike specific,” he said.

The second trend is AI. Bernard pointed out that AI has really changed the discussion a lot in the last year. Customers and partners are talking about cloud and end-to-end AI powered workflows, especially on tasks from ideation and innovation all the way to execution and completion.

“This has changed the discussion with partners because before it was about using AI to accelerate some security tasks. Now, the market is saying they need to secure the use of AI. Customers don't want to adopt more AI until they have visibility, control, guardrails, and are able to secure it,” he explained.

Specifically, Bernard believes the market has come around, and the partners have come around to saying AI is a huge demand driver for security because now there is a lot more attack surface that needs to be secure.

The third trend is the re-architecture moment of the SOC. Bernard pointed out that the SOC is in the next chapter of evolution, with legacy SIEM moving away. Next-Gen SIEM is expected to be a multi-year journey, even though it was more experimental a year ago. Now, Bernard sees it as the de-facto way of the world.

“If you're using a legacy SIEM, sometime in the next one to three years, you're going to switch off it. Here at CrowdStrike, we have thousands of customers using our Next-Gen SIEM technology. We're far ahead of all of our competitors in terms of the number of customers we have on our Next-Gen SIEM as well as the size of our Next-Gen SIEM business,” he said.

Bernard stated that this is because of CrowdStrike’s ecosystem, whereby partners have successfully created services and implemented it. Seeing this as the on-prem to cloud moment in cybersecurity, this will be a complete re-architecture, re-imagination of the SOC that comes with a completely new refresh.

“What data are you going to bring in? What kind of agents are you going to put on top of your SIEM? How are you going to operate your cybersecurity system? That's where CrowdStrike Falcon, I believe, emerged as the operating system of cybersecurity. Just like Microsoft is the operating system of the enterprise, CrowdStrike is the operating system of security in the ecosystem,” he said.

Jon Fox, Vice President of Channels and Alliances, CrowdStrike Japan and Asia Pacific shared that there's also been a lot of acquisitions locally from global partners trying to get into the local market. This includes partners that don't have a presence or really just consolidate their position in the market or adding skills.

“If I think about the number of conversations I have with partners looking to get into the Japanese market particularly, there's a lot trying to get into that market, which is a hard nut to crack if you're not a Japanese partner. There's a lot of M&A and consolidation of partners,” Fox said.

The other thing Fox is noticing among regional partners is a lot of them are in a position where they're having more of an opinion.

The days of just having a laundry list of point products or vendors on a line card that partners take to the customer and say 'hey, here's what I've got, what do you want?' are disappearing. They're taking a lot more of a position and opinion. We're seeing more and more that CrowdStrike is the opinion and the position for cybersecurity platforms,” he said.

At the same time, Bernard added that some of the large Australian partners, and some in other parts of the region as well, have all had liquidity events in the last one to two years, but even more so in the last year.

“We're their number one in terms of business size, and growth, margin and everything. We're their number one solution. I think these birds of a feather flock together. They all have something in common, which is their business results and the expertise that they have, and the commitment and investment they've made in CrowdStrike,” Bernard said.