Last night Bowery Capital attended the NY Enterprise Monthly Technology Meetup. This event was focused on enterprise security, an area we have become increasingly interested in for two reasons:
First, the need for security solutions is growing. In the past, applications seldom communicated with one another. Companies could build a moat around their IT to protect themselves. Today’s incredible degree of interconnection – not only among software, but also among platforms – creates new points where security can be compromised. Second, IT security is now top-of-mind for CEOs. Last month Target CEO Gregg Steinhafel, a 35-year veteran of the company, stepped down in the aftermath of a massive data breach that compromised credit card information of 40 million customers. Target is just one of many F500 companies where customer data has been exposed. CEOs are getting more involved with IT security because an oversight could cost them their jobs and materially damage their companies.
Bill Murphy is one of several thought leaders who spoke at the event. Bill is not only the CTO of The Blackstone Group, but also plays a key role in helping its 70+ portfolio companies (which together comprise over 600,000 employees and includes Hilton Hotels, among other titan brands) make informed IT security decisions.
As a buyer of enterprise security solutions, Bill shared an interesting angle and provided insight into his thought process. We left with three takeaways:
- A good CTO will make focused investment decisions based on perceived threats to his company. There are countless security risks and often countless solutions to remedy those risks. The nature of a company’s operations determines what type of security it is vulnerable to. Weighing your risks and allocating resources accordingly is key. He likened this to a homeowner who will install a deadbolt lock in an urban apartment, but unlikely to do so in a rural vacation home.
- Keep your sales pitch narrowly focused on the critical problems facing the target customer. Bill bemoaned potential vendors showing “screen after screen” of solutions that were not relevant to his business. Presenting solutions that address the salient issues will yield a fruitful discussion.
- The hardest part is getting companies to change behaviors and purchase decisions. There are challenges in driving buy-in of solutions and sales cycles in the space are lengthy. However, the media is helping to create a sense of urgency around enterprise security.