The Cloud Access Security Broker (CASB) solution market is heating up. While this could be good news for enterprises seeking IT cost reductions across their cloud ecosystem (competitive pressures have a way of driving down price), it’s also a volatile, nascent marketplace.
New technologies that fill a major demand in the market have a way of permeating enterprise IT quickly. In 2017, NPI saw an exponential increase in purchase analysis requests for various CASB solutions in the market. CASB vendors offer an added layer of security to enterprise cloud services by serving as a proxy between user traffic and core hosted applications like Google Drive, Office 365, Salesforce.com or others. CASB offerings have become increasingly attractive as security breaches continue to impact business operations and have the potential to create disasters that are difficult to mitigate. While 10 to 20% of enterprises utilize these gateways now, that number is expected to top 85% by 2020, and vendors like Netskope, Palo Alto Networks, Cisco and Skyhigh Networks are scrambling to capture market share in the initial waves of interest.
How to Maximize Your IT Cost Reductions – Start By Knowing What Constitutes a Good Deal for CASB
IT sourcing teams have a critical knowledge gap as vendors’ sales, pricing and contracting tactics quickly evolve with the marketplace. CASB vendors, even market leaders, continue to gauge customer sentiment to determine what’s working to close deals and what’s not, and refine tactics in real time. This nascent environment offers an opportunity for early adopters to lock in competitive pricing, but it also presents hidden pitfalls as pricing, programs and usage rights evolve – how do you keep a fresh bead on what constitutes a good deal?
One example of these developments in pricing schemes that NPI has observed is how vendors price approved applications. In the first wave of market development, vendors offered proposals in which individual additional approved applications incurred costs as they were added to a customer’s deployment. While still not an uncommon practice by any means, in 2017 NPI saw competitive pressures start to eliminate the additional fees and instead vendors began to price based only on users. This trend could have a sizeable impact on overall CASB pricing as more vendors follow suit – and that’s a good thing for enterprises, especially those seeking IT cost reductions across their cloud ecosystem. If a successful CASB deployment grows within an enterprise, the number of cloud services covered could potentially number in the hundreds. The flipside? Early adopters may find themselves being “locked in” to unfavorable pricing and terms.
This is just one of several factors that can be taken into account to craft a good deal. Vendors know that customers are under the gun to achieve heightened information security, but vendors are also eager to capture market share; and they know that for most enterprises, the selection process has just begun. That’s a great leverage position for buyers to be in. Another factor is the likelihood that we’ll see consolidation in this stage of the market and, as larger suppliers acquire more niche providers, their respective offerings and the associated costs will continue to morph along with this space.
Fair market value pricing targets are evolving as quickly as the solution landscape, which makes fresh price benchmark analysis more important than ever to assure you’re getting the best prices, usage rights and future flexibility that the market has to offer.