Last year, we predicted that by the end of 2023, 60% of stand-alone IoT and OT security providers would no longer exist as we know them today. Since that time, there has been a rash of mergers and acquisitions in the IoT/OT/CPS security space. So it was no surprise that Microsoft Azure confirmed its intentions to acquire OT security provider CyberX. But what should we be paying attention to with this acquisition?
In case you have missed out on the digital security journey thus far, let me recap. As we think about digital transformation, there are truly two camps; the transformers and the optimizers. Optimizers focus on their current business model: maintain the same model but make it function better, at less cost, while delivering better experiences. The transformer camp pursues net new revenue and business opportunities in the digital space. For each, the security appetite is very different.
Pay Closer Attention to Customers' Digital Ambitions
IOT platform providers, IT security firms, and standalone security providers need to pay closer attention to which camp their customer's fall into. Yes, IOT platform providers like Microsoft will play a bigger role with security being core differentiation for their products. Traditional IT security firms should pay attention as well, and be ready to make solid progress on their IOT/OT security feature set over the next year.
For transformers, security rests with the platform and is core to their IP, so the pending CyberX/Microsoft Azure deal is perhaps one of the first real signs that IIoT/IoT platform providers need to focus on security as a strategic product play.
Finally, perhaps just as important, stand-alone providers must decide which camp they will align with in the near future.
Who should pay attention? What should they do?
Traditional IT Security Provider
- Urgently evaluate your go-forward options by assessing current and planned capabilities to account for IoT/OT.
- Look at existing strategic OT/IoT partners for possible M&A options.
- Center your product roadmap for the optimizers by centering opportunities on integration with SIEM/SOAR solutions.
- Up your UX game to increase cyber situational awareness
Stand-alone OT/IoT Providers
- Urgently reevaluate go-forward options by assessing current and planned capabilities and market readiness to add IT security functionality to existing products, partner with large-scale providers, or position the product line for acquisition.
- Play ball as a microservice or macroservice solution to platform and security providers if you want to stay in the game.
- Embrace Camp B, the Transformers, and be prepared to double down on security to stay competitive.
- Consider M&A as a step to leapfrog over the competition. Vendors to look at should include OT/IoT stand-alone providers and embedded trust solution providers.
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