The Soft Sell

But history had other ideas. A recession took its toll on the economy midyear, and the Sept. 11 terrorist attacks forced businesses to rethink their priorities. Suddenly, upgrading and installing new OSs wasn't one of them (see "What's Holding Up Adoption of Windows XP?" page 48). In addition, e-business software began to suffer, especially in the ERP and B2B spaces. Customers began complaining about high prices, difficult integration and lengthy deployment cycles, and spending on software began to waver. Even CRM, one of the biggest software markets around, was tagged with criticism for not living up to users' expectations.

Not all software fell victim, however. Four areas, in particular, thrived in the wake of Sept. 11, and it's little surprise that all are related to protecting and supervising data. They include security, database-management, disaster-recovery and storage-management, according to VARBusiness' 2002 IT Spending and Strategy (ITSS) survey results. And those areas continue to grow and mature, according to Sanjay Kumar, president and CEO of Islandia, N.Y.-based Computer Associates.

"My expectation is that we'll continue to see many more software solutions coming out for security, especially in emerging areas like Linux," Kumar says. "Storage software has huge potential, as well. What will eventually happen is that storage is going to become so independent of a platform that you'll be able to attach storage to any computer and have access from any machine."

Security Stars

Of the 11 software areas included in the ITSS survey, security software was far and away the most popular choice for customers, scoring a 7.1 average rating on a scale of 1 to 10 for importance. Once an afterthought, security software has seen a surge in attention from both customers and the channel. As a result, many top vendors are expanding into new areas.

CA, for example, has emerged as one of the largest security-software vendors in the industry with its eTrust product line, which features 19 different firewall, virtual private network (VPN), antivirus and intrusion-detection applications. CA recently developed several of its security products for Linux systems, giving the company a wider range of customers and technology to work with.

"The promise for us is that we can work with a number of platforms,Windows, Solaris, Unix and Linux," Kumar says.

Redwood City, Calif.-based Check Point Software Technologies last month dove into the mobile-computing security-software market with its VPN-1 Secure Client technology for Microsoft-powered PDAs and handheld devices. Even security hardware isn't out of reach: Symantec, Cupertino, Calif., recently developed an integrated network security appliance called Symantec Gateway Security, which combines Symantec's security software for VPNs, firewalls and other areas.

Security may be hot, but vendors certainly can't rest on their laurels. Check Point's outlook, for example, was dim for the first quarter this year after celebrating solid financial results that beat Wall Street's expectations in Q4. Check Point CEO Gil Shwed says the increased attention on security has helped drive his company, but that IT spending isn't what it used to be because of the global recession. Another factor, of course, is competition. Start-ups and emerging technologies in the area of biometrics have changed the market's landscape. Therefore, security-

software vendors are embracing the channel.

Symantec recently scaled back its professional services practice to build a larger base of channel partners. Last fall, CA created a specialized segment of its channel program for security solution providers. Sybari Software, a security software vendor based in East Northport, N.Y., is rolling out a new certified partner program built around its e-mail protection software, Antigen, which scans e-mail and attachments for malicious code, worms and viruses before they hit vital parts of the server and network.

"Solution providers are hot on security right now, and they're looking for best-of-breed solutions," says Rocco Donnino, Sybari's vice president of sales for the Americas. "We think the channel is going to be a huge plus for us."

Bill Conwell, vice president of business development at Essex Technology Group, says his company has stepped up its offerings for storage in the midmarket. The Rochelle Park, N.J.-based solution provider specializes in Windows NT, Unix, AS/400 environments and now Linux. A strong IBM partner, Essex provides professional services for Tivoli's Storage Manager and NetView. "Storage is on everyone's mind right now, and storage solutions have huge potential," Conwell says.

To Protect And Store

With the emergence of storage as a crucial component of the enterprise, several software areas have benefitted, including database-management, disaster-recovery and storage-management. Those three software markets were rated second to fourth in importance behind security software, according to VARBusiness' ITSS survey.

Disaster-recovery is vital for sustaining an enterprise. Just one day after the Sept. 11 terrorist attacks, Gartner reported a mind-boggling and sobering statistic: Two out of five enterprises that experience a disaster, such as a terrorist attack or an extreme force of nature, go out of business within five years. Gartner analysts pointed to disaster-recovery technology and business-continuity plans as ways to minimize damage and disruption.

Disaster-recovery can also be a lucrative business for the channel because customers need consulting and business-

continuity solutions based on the core disaster-recovery software. Compaq has built a business around such software vendors as Veritas, providing services and support around Veritas' NetBackup suite. Joe Hogan, manager for worldwide solution development at Compaq Global Services, says disaster recovery is "similar to a fire drill with kids. It takes practice."

It's increasingly common, as well, to see vendors combining the areas of disaster-recovery, database-management and storage-management to create a united product line. Mountain View, Calif.-based Veritas, for example, recently enhanced its NetBackup family, including NetBackup BusinessServer, Data-Center and Storage Migrator. DataCenter and BusinessServer Version 4.5 now offer customers advanced disaster-recovery features, while Storage Migrator moves online data not in use to storage areas.

Redwood Shores, Calif.-based Oracle has also built in more disaster-recovery capabilities and data-backup features for the release of its flagship database, Oracle 9i. Oracle CEO Larry Ellison is so confident in 9i's fault-tolerance and stability that he calls the product "unbreakable."

The elements of security, database-management, disaster- recovery and storage-management software are all indispensable parts of insulating the enterprise from a series of threats, whether from cybercriminals, massive hardware failures or terrorist attacks. Customers say that OSs and e-business software, though important, can't match the task of protecting and securing an enterprise's data in this day and age. Priorities have changed, and enterprises, vendors and solution providers must keep up, according to Gartner.

"If enterprises do not immediately begin developing and testing business-continuity plans and seeking disaster-recovery services," Gartner analysts Roberta Witty and Donna Scott wrote in their Sept. 12 report, "they risk complete loss of their businesses when,not if,a future attack comes." n