LONDON (ShareCast) - (Sharecast News) - Cybersecurity and intelligence provider Falanx Group updated the market on its partnership with SolarWinds - the US-based provider of software solutions for network management - on Tuesday, reiterating that Falanx was the first 'SolarWinds Threat Monitoring Service Provider' (TMSP) in the UK and South Africa.
The AIM-traded firm said the partnership have it first mover advantage with the total addressable market of more than 2,000 SolarWinds managed service providers (MSPs) within the UK.

It said that, with an industry average of 50 customers per MSP, Falanx would partner with SolarWinds to sell its complementary services to around 100,000 SolarWinds end customers in the UK alone.

Falanx said its role as TMSP was to provide 'Security Operations Centre' (SOC) services in support of SolarWinds' sale of its Threat Monitor software to its MSPs and onward to their end customers.

In the early stages, that would require Falanx to support the installation as well as the monitoring of the new Threat Monitor.

Over time, the MSPs would take on more installation responsibility, but the monitoring role would remain the exclusive domain of Falanx.

The board said it believed an entry-level price of £200 per month, per end customer for the SOC service, was likely to support mass adoption.

Pricing per customer would be determined by the size of their IT estate and incremental services would be charged separately.

As a result, Falanx said it had an addressable market of more than 2000 MSPs.

Of those, some were sophisticated enough to support and provision Threat Monitor themselves while others had customers that currently lacked the required cybersecurity basics in place to consume Threat Monitor.

The company's immediate focus would therefore be to support those MSPs whose customers had an appetite to strengthen their current security posture.

Internal estimates suggested that equated to about 20% of the addressable market, or around 20,000 target end customers.

As an illustration, Falanx said that if 2000 end user customers took up the service at entry level pricing, it would generate £0.4m revenue per month on the Threat Monitor SOC services alone.

Falanx would be working with the SolarWinds network of MSPs in the coming weeks to plan, design and implement the rollout of the programme, and it anticipated that the delivery of those support services would commence in the first quarter of 2019.

Current sales would have a "limited impact" on this year's revenue, but could dramatically benefit future periods.

Furthermore, Falanx said it had agreed with SolarWinds to offer the full suite of Falanx's Cyber Security professional services to the MSP network, for onward resale to their customers in the UK and South Africa.

The board said it believed that those services would be attractive to a "significant proportion" of the SOC user base, which could generate a further £0.2m per month.

Falanx said the partnership with SolarWinds reflected its successful strategy in recent years of transitioning to an indirect 'channel' sales model, leveraging MSPs' trusted status as well as their sales reach and marketing capability, to efficiently reach a greater number of prospective customers.

The transition had reportedly helped drive the growth in monitoring revenues by more than 250% in the last two years.

As it said in its annual report for 31 March, the company held sufficient resources and committed facilities to meet its current plans, including the commencement of the "transformational" project.

"As we work ever closer with SolarWinds our partnership is developing into a fantastic opportunity for Falanx," said chairman and chief executive officer Mike Read.

"Combining the marketing and sales power of a $1bn software company with our SOC services and expertise is transformational."

Read said that, as the only SOC service provider supporting the SolarWinds market in the UK and South Africa, a modest uptake of services was required to "dramatically change" Falanx's financial performance.

"We are now very well placed to scale Falanx into a significant leader of cybersecurity services in the UK in the short to medium term."

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