Identity in a Bad Economy: The Rest of the Story
Posted by Chris Zannetos - CEO on Thu, Mar 19, 2009
In her recent blog posting titled, Is a bad economy good for identity?, Lori Rowland of the Burton Group writes that the poor economy has actually been good for the Identity and Access Management market. She offers evidence that a number of companies, Courion included, reported record sales and revenue in 2008. Lori suggests that the unfortunate wave of layoffs and increased productivity requirements have driven demand for automated provisioning - to ensure that departed staff cannot access information and systems and that new hires are productive as soon as possible.
These are accurate observations from what Courion has seen in its business. But as the late Paul Harvey used to say...let's talk about "the rest of the story".
The reality for CIOs is that they have budgets that are flat at best, and more likely decreased from 2008. The impact on new projects is more severe. As all of us in the software industry know, a flat budget means a reduction in new project spending...a 10% budget reduction actually means a 30-100% reduction in new project spending.
This was confirmed for me when I spoke with 20 CIOs and CISOs in Courion's customer base earlier this year. The response across all industries and company sizes was that they would have at most a small handful of new projects this year. But they were all faced with the same challenge: "how do I respond to increasing access compliance pressures - whether regulatory- or internally-driven - with a budget less than last year's?"
This is the driver of the increased demand that Lori Rowland identified. Customers are demanding products that can automate administrative processes to reduce staff (and costs) while at the same time ensuring compliance with security policies and regulations.
They have to be compliant, and they have to reduce costs. It's that simple.
It is not surprising that the two examples that Lori provided were Access Provisioning examples. More than any other part of the Identity & Access Management market, Access Provisioning provides customers with the opportunity to reduce hard costs while improving security. This - along with Provisioning's ability to speed business processes - is why CIOs view Provisioning as a strategic platform for their operations.
So does this mean that Access Provisioning and Compliance projects are always among the 1 or 2 projects above the line to get budget? While Courion's sales force might wish they were...the answer is "sometimes". What makes Access Provisioning & Compliance projects unique among security projects, however, is that they can actually help IT organizations increase budget. I'll offer a recent Courion customer project as an example.
Courion recently signed an agreement with a customer to provide automated provisioning/de-provisioning and access verification for over 50 applications - even though the customer had no budget. How could we do this? Did Courion all of sudden lose its moral bearings and start to employ the bait and switch "free" approach of some vendors? No it didn't.
Even though the project cost is over $1 million, the project will never negatively impact the customer's financial statements. Or as my CFO likes to say, the project creates "P" instead of "L" on the Profit & Loss statement. The customer is able to begin reducing administrative staff within a few months of the project start, and is always able to reduce staff faster than the cost of the project that hits the P&L. And they end up ahead of their auditors - delivering the security the business needs but doesn't want to pay for.
I have been working in the Identity & Access Management market for over 15 years now, from before it was called the IAM market. I've been through the recession of the early 90's. I've been through the Tech Meltdown of 2001. Never before have I seen customers need vendors more to help them improve security and reduce costs. Automated Access Provisioning & Compliance provides both.
And that....is the rest of the story.