Spending Decisions in an Economic Squeeze

Inflation, stagnation… even stagflation and recession… these are the words that look like they will define global economies in 2022 and into 2023. There’s barely a country that is being spared the crunch, and we are already seeing heated debate among global politicians as to the appropriate fiscal response. Do we spend or save our way out of this? 

For organisational leaders the quandary is the same, but without the ideological hot potato of taxation policy, the likelihood is that belt tightening will be pretty universal. If you watch the stock market you might think the relative resilience of tech stocks is a sign that tech spend might be protected, but the reality is that inflation comes for us all. With few exceptions, across all departments, business leaders will be asked to do the same—or more—with less. We will all need to grapple with rising prices with less in our pocket—and for security professionals this is all happening while the risk landscape they are facing is evolving quickly.

Those who are already in the process of security and network transformation may find themselves in a privileged position, with a head start on the identification of cost savings that don’t impact negatively upon the organisational security posture. As a pretty long-toothed security professional, it is always tempting to focus on the security advantages of technologies, but with the economic benefits becoming increasingly appealing to organisations, I wanted to take the time to capture some of where I see the best economic advantages of network and security transformation with a focus on cloud architectures—in the hope it may ease discussions and decisions in the coming months as we move into budgeting season.

1. Reduced costs through the use of shared cloud infrastructure and payment only for what is needed

On-prem hardware for data security is no longer a sensible architectural design. It was effective when the majority of applications sat within a private data centre, however the majority are now provisioned from the cloud and consumed by employees outside of the corporate network. This architectural redundancy brings significant opportunity for cost saving. Keeping on-prem appliances, and routing data back to them, requires continual investment in network bandwidth, appliance capacity, and specialist support hours. The corporate data centre and network have become bottlenecks, and bottlenecks require investment to fix. This is a significant cost that can be avoided when security happens in the cloud.

2. Scalability on demand without the need to re-architect; a great feature in times of growth, and essential one in times of potential retraction

Most vendors will sell the scalability of cloud as an advantage to prepare for growth, but the reverse is also true—if a less cheerful conversation. Whether due to macroeconomic forces, or individual company circumstances, one of the most obvious drawbacks of any CapEx investment is that you have to make a big outlay at the start and trust that you will find value and efficiencies further down the line. In difficult economic times, there is often no room for large initial outlays, and the prospect of efficiencies is less clear if an organisation sees retraction rather than growth. Moving to a predictable OpEx subscription model supports operational cost efficiencies, avoids excessive upfront costs and allows for future spend reduction. 

3. Reduction of breach risk (at a time that IBM/Ponemon assesses the average breach cost to be $4.35 million—up 12.7% from 2020)

Now we get to return to my first love—security posture rather than penny pinching. And the good news is that well-planned security and network transformation improves security posture at the same time that it reduces cost. A third party report by ESG found that companies using Netskope saw, on average, an 85% reduction in security risk at the same time that they benefited from a 51% reduction in costs of appliances, bandwidth and FTEs. These advantages come as a direct result of the improvements that an integrated SSE architecture brings protecting data across web, SaaS and private apps, with users dispersed across the hybrid enterprise.

These advantages and many more are evidenced as real life examples that you can find in our eBook; The Economic Advantages of Network and Security Transformation. In particular, look out for the organisation with 65 branch locations which, over three years, avoided network costs of $6.3m by moving to cloud-based security.  You can also hear about the company that saved more than $9m in appliance costs by consolidating SWG, CASB, and DLP to a single SSE cloud service. 

A drive to reduce costs while improving security posture doesn’t have to be an impossible challenge; the answers are all there for us in technology developments that have emerged in recent years. SSE, and the SASE architecture it sits within, allow organisations to achieve both.