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COVID-19 Pressures Some Cybersecurity Consulting Revenues

At first glance, MSSPs are well-positioned to assist customers with remote security, managed detection and response (MDR) and other services during the coronavirus pandemic.

But take a closer look, and you’ll see anecdotal evidence that COVID-19 is starting to impact cybersecurity consulting revenues.

A case in point: After delivering strong quarterly results, Secureworks sees some challenges ahead involving COVID-19’s impact on the cybersecurity market.

During the Secureworks earnings call on March 27, CEO Michael Cote noted:

“We have been closely following the early indications of the effect on our business from the COVID-19 crisis. While we are still seeing demand for our products and solutions, our customers and prospects are being impacted in their businesses.

With so much macro uncertainty, we currently don’t feel it’s prudent to provide full-year quantitative guidance for FY 2021. Although we are not providing guidance on full-year FY 2021, in the first quarter of FY 2021, we expect both GAAP and non-GAAP revenue to be in the range of $133.5 million to $137.5 million, impacted by Dell SafeGuard revenue transitioning to Carbon Black and the COVID-19 crisis, especially on our consulting business.”

To be clear, the overall Secureworks earnings call was upbeat. And the statement above was a brief soundbite during a 19 minute earnings call. In fact, much of the call focused on the MSSP’s growing momentum in the MDR market.

Still, the soundbite provides one of the first indications that even the MSSP business model will feel pressure as the pandemic spreads.

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