IT and the economy – what the vendors are seeing

by Steve Ragan - May 5 2009, 17:50

If you look at recent studies, one from Infosec that says spending in IT is starting to rise, and one from Gartner that shows overall IT spending is down, you can see no one is sure where things stand, thanks to the economy. However, what is certain is that businesses are facing a tightened budget belt and, like any other department within a business, IT is impacted.

The Tech Herald has asked vendors to comment about what they are seeing with regard to the economy. Each of the vendors that responded shared a common thread. That is, each company is in one way or another seeing the effects of a slowed economy, and has either adapted to meet it, or is working with customers to offer a bit of relief.

We asked the following questions, initially tailored to each company’s specialty:

Has the economy and fear concerning the economy impacted your business at all?

If it has, what are five initiatives you implemented to help manage the impact?

If it has not, why? What are you doing to take advantage of this sudden fortune as others feel the heat?

Has the economy impacted your vertical markets?

How are your customers looking at security or IT purchasing, and what are you doing to help them keep costs low while still offering them what they are looking for?

If you are in IT or are an IT Security vendor and would like to contribute to this topic by answering these questions, feel free to send your answers to security@thetechherald.com with the subject heading of 'IT and the Economy'.

[Note: Responses subject to editing and length. Please avoid product marketing or pitches, no sales or criticism of competition. Submissions for this feature will end on Dec. 31, 2009.]

Over the next few days we will post the responses to our questions along with a little information about the companies that took the time to answer.

With that said, we will start with the responses given to us by Andrew McLennan, CEO of Metaforic.

Metaforic is one of those companies that often takes heat from those who are against anti-piracy measures and controlled DRM. Yet, to be fair, Metaforic only makes the software protection, it is up to the receiving company to deploy it.

What Metaforic does is actually rather cool when you look at its technology; it protects IP (Intellectual Property) and software from piracy and other security risks by making it so time consuming to crack the software that, in most cases, the thief simply gives up.

And, one thing that stands out about Metaforic is the brutal honestly it uses in its marketing regarding the effectiveness of mitigation:

“Everyone knows that given enough time and effort every protection is eventually removable. The real difference in quality of protection is how long your application can remain protected,” reads a quote from its official Web site.

So it admits that even its own protections can be rendered moot over time, so instead of attempting a silver bullet, Metaforic has shifted to a new approach by making things harder for the criminals.

This means that passive piracy of software protected by Metaforic technology is almost null and void. If dedicated software pirates take a crack at software protected by Metaforic, they are in for a long and drawn-out fight.

Metaforic is used by businesses to protect software, such as application protection from reverse engineering, and its technology is also used in the gaming industry to protect against piracy. In addition, Metaforic offers protection to MMO games or game clients.

TTH (The Tech Herald): Has the economy and the fear over the economy impacted your business at all?

AM (Andrew McLennan): Thankfully, not in a negative way. As a veteran of multiple startups - experience has very much taught us the truth in the old adage of “hope for the best, prepare for the worst.”

But we are seeing the current state of the economy having an impact on our clients and prospective clients, which is actually helping us. Previously, organizations have taken months to evaluate vendor solutions, but with time and budget pressures, what we are seeing in the marketplace today is that organizations are not wasting time evaluating slideware or early proof of concept trials... For example, we are seeing evaluation processes that used to take several months now being completed in mere weeks.

TTH: If it has not, why? What are you doing to take advantage of this sudden fortune as others feel the heat?

AM: Our application anti-tamper product is designed to protect software so we are fortunate enough to be able to offer a solution to a real problem… Software manufacturers are feeling the crunch and are feverishly seeking solutions that will help them protect revenue streams or grow business without marketing dollars. We are taking advantage of this by proving to folks that they can immediately begin increasing their revenue streams, generating bottom line revenue now, not next year.

TTH: Has the economy impacted your vertical markets?

AM: Yes, thankfully, it has. Not only are we seeing rapidly growing interest from software publishers and embedded equipment manufacturers, we have seen great interest in using our solutions in the license management, enterprise application security and games industries, which we certainly expect to take advantage of.

The demand for our anti-tamper solution is coming from so many different vertical markets that we are already reaching markets that we were not planning to market to for another couple of years.

TTH: How are your customers looking at security or IT purchasing, and what are you doing to help them keep costs low while still offering them what they are looking for?

AM: We are seeing a dramatic change in the software security industry. Previously, to be able to partner with an ISV, you just needed a license management solution. Now, you need much more than that. Not only do you need to prove effective protection, you need to be able to deploy it quickly and prove it works for a long time. Otherwise you will be shown the door. In today’s economy, a dollar of lost revenue feels like ten dollars lost when it comes to the bottom line. So increasing revenue by having effective protection is the only way to get the attention of customers.

Around the Web