Whitepaper: Security Services Are Untapped Opportunity For Service Providers

Commoditization of services means providers face serious challenges as margins are eroded away, according to Clavister
July 8, 2009 " Security services are an untapped business opportunity for service providers including Internet service providers (ISPs), data centers and telecom operators according to IP-based security and unified threat management (UTM) specialist, Clavister.

The commoditization of services means that providers face serious challenges as margins are eroded away. Andreas ...sander, VP product management, Clavister explains: "Service providers trade in intensely competitive areas where industry saturation is forcing the price of standard services down virtually eliminating profit margins. The result is that there is little to differentiate suppliers and so no competitive advantage.

"Saturation means that market growth is slowing and there are fewer new customers to go round. If you cannot grow by finding new customers then the answer is to grow by selling more to existing customers who you can target more cost effectively through direct mail and with a greater chance of success."

However, as the Internet is used as a business platform, it has become a greater target for people who aim to use it in a criminal manner.

...sander continues: "In addition to the general security concerns that affect anyone who uses technology or connects to the Internet, service providers have their own specific security-related issues to deal with.

"Cyber-crime is growing and malicious traffic is becoming more prevalent which is a trend that is supported by the increasing volume and sophistication of attack tools. Threats can include Distributed Denial of Service attacks (DDoS), infection by viruses and worms, phishing, e-mail spam, redirection of traffic and break-ins aimed at modifying the configuration of vital components."

Some service providers already sell security services as part of their offering but these often require installation of a physical box at the customer's premises. That involves the cost of the hardware and the resources to install it, placing the final price tag beyond the means of the average small to medium sized business (SMB).

Now, operators and network infrastructure players wanting to ride the wave of this significant business opportunity have a more attractive virtual alternative thanks to network security specialist Clavister.

Jesper Blom, hosting manager at ISP DGC explains: "As an Internet Service Provider for the corporate market we must offer our customers the highest levels of security and that is why we build many of our services on Clavister solutions. Clavister solutions promote customer confidence and that makes our business more successful."

Clavister's Virtual Security Gateway (VSG) can be installed at the data center or on the core network of the operator and each individual Internet connection or customer can have their own dedicated security gateway. It can also support managed service providers in achieving effective data center security while reducing total cost of ownership of equipment.

Blom concludes: "Security is extremely important to our business because it creates the market confidence that improves our image and enables us to grow our customer base." To find out more about how to create revenue streams for service providers please visit to download a copy of the whitepaper.

Media contacts: Fiona Whyatt/Louise Wheble Insight Marketing & Communications