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Cybersecurity vendors continue to consolidate amid industry restructuring. That situation can create headaches for customers, including increased security risks and price increases. However, a reliable cybersecurity partner can help.
Overview of Cyber Vendor Consolidation
Recent vendor consolidations have typically meant more established companies acquiring startups, according to Susan Sharawi, a cybersecurity partner at Deloitte.
Regardless of how the deals are structured, the result is reduced competition for vendors left standing and fewer choices for customers at a time when threats, including ransomware, are on a meteoric rise.
Vendor consolidation can be especially hard on small and midsize companies, which face a growing need for enhanced cybersecurity solutions at prices they can sustain, according to McKinsey & Company.
How Industry Restructuring Poses Cybersecurity Risks
Cybersecurity industry restructuring can introduce security vulnerabilities in critical areas.
Fewer choices for customers and their specific situations means companies may struggle to find the right fit for their use cases, potentially leaving security gaps.
Less competition also tends to throttle innovation, resulting in less advanced solutions in the marketplace.
And security protocols that become standardized across formerly separate solutions may leave customer data and systems more vulnerable to widespread attacks.
Impact on Competition and Innovation
By definition, industry restructuring that leads to mergers and acquisitions reduces market competition. Reduced competition can negatively impact customers in many ways, including through a slowdown in innovation.
Fewer vendors experience less pressure to challenge competitors for market dominance. And a reduced pace of innovation ultimately means less advanced solutions facing off against the ultimate competitor: threat actors.
The shrinking landscape of cybersecurity solutions can also drive price increases and lead to vendor lock-in for customers.
Effects on Pricing and Customer Choice
Increased costs and reduced customer choices necessarily go hand in hand with consolidation. The Ford Motor Company of the early 1900s famously allowed customers to choose any color as long as it was black. “Ma Bell” had its customers renting their home phones, racking up higher fees.
CyberMaxx is one cybersecurity vendor bucking the trend, offering competitive and customizable cybersecurity options in a consolidating market. It serves customers in industries as diverse as healthcare, financial services, and insurance.
Risks of Vendor Dependence
Depending on fewer vendors for their cybersecurity needs puts organizations at increased risk as they become dependent on fewer providers to protect mission-critical systems.
For example, many solutions, such as firewalls and encryption protocols, offer only defensive capabilities that can overwhelm security teams while attackers slip through. C can reduce costs and provide enhanced cybersecurity protection.
In short, the solution to the risk represented by homogenous cybersecurity solutions is a reliable and diverse ecosystem of robust cybersecurity services. Such services are often orchestrated through a managed detection response (MDR) service that provides 24/7 security coverage.
Service Homogenization and Its Drawbacks
Service homogenization is a natural tendency of vendors post-consolidation. Systems get combined, products folded into other products, and departments downsized as companies seek economies of scale and eliminate price-cutting competition.
But while economies of scale and the elimination of competition are designed to benefit merged companies, customers may end up as collateral damage, paying higher prices, struggling with degraded products and services, or both.
In a high-stakes industry like cybersecurity, the negative impacts of service homogenization can be high.
Challenges in Switching Providers
Customers caught up in the adverse effects of a merger or acquisition may face numerous difficulties when trying to switch providers.
First, with fewer vendors to choose from, a customer may find duplicating service needs more challenging. Customers also have fewer price points and levels of service to choose from.
If they jump ship to a vendor also caught up in industry restructuring, they may find themselves lost in an expanded pool of customers vying for attention. And that attention may come at a reduced level from what they were accustomed to at a pre-merger vendor.
Impact on Customer Support and Relationships
Ultimately, any solution is only as good as the level of service it can provide. After all, what good are even the best solutions if customers are unaware of them or lack the understanding they need to take full advantage of them?
Yet, declines in customer support quality and relationship personalization are all-to-often par for the course amid industry restructuring.
A Reliable Partner in a Changing World
Cybersecurity industry restructuring can add complexity and increase risk amidst rising threats. That’s why customers look to CyberMaxx for comprehensive, customized, and cutting-edge cybersecurity solutions in an evolving market.