Techaisle Blog

The cybersecurity landscape is a relentless storm. For Small and Medium Businesses (SMBs) and Midmarket enterprises, navigating this storm is becoming increasingly complex. Limited resources, widening attack surfaces due to digital transformation, and a sheer volume of sophisticated threats create a challenging environment. Historically, many businesses adopted a "best-of-breed" approach, selecting individual point solutions for specific security tasks – a firewall here, an endpoint protection tool there, perhaps a separate email security gateway. While logical on the surface, this strategy is showing its age and limitations.

New Techaisle survey data (Techaisle SMB & Midmarket Security Adoption Trends) reveal a significant and growing trend: a clear shift in preference towards end-to-end security platforms, particularly as businesses scale. While the smallest companies still lean towards point solutions, the momentum across the broader SMB and Midmarket segments is undeniably moving towards integrated platforms. This shift isn't arbitrary; it's a strategic response to the operational realities and escalating security demands these businesses face.

This post delves into the Techaisle data, explores the compelling reasons driving this platform preference, and highlights how leading vendors, such as Palo Alto Networks and Cisco, are addressing this need with their evolving platform strategies.

Decoding the Data: A Clear Trend Emerges

The Techaisle SMB & Midmarket survey data paints a nuanced picture, directly correlating company size with security solution preference:

• The Smallest Businesses (1-9 employees): These micro-businesses exhibit the strongest preference for task-specific, best-of-breed solutions, with 56% favoring this approach, compared to 44% who prefer end-to-end platforms. This often reflects simpler IT environments, potentially tighter budgets favoring incremental purchases, and perhaps a perceived ease of managing distinct, single-function tools when the overall infrastructure is limited.
• The Growth Transition (10-99 employees): As companies enter the core small business segment, the preference for point solutions remains dominant, peaking at 74% for the 50-99 employee bracket. However, the foothold for platforms is strengthening, indicating that even at this size, the complexities prompting platform consideration are beginning to surface for over a quarter of businesses.
• The Midmarket Shift (100-999 employees): This segment marks a significant inflection point. While core midmarket (100-999 employees overall) still shows a majority (62%) leaning towards point solutions, the preference for end-to-end platforms rises substantially to 38%. Within this, the preference for platforms increases steadily with size, ranging from 32% for 100-249 to 40% for 250-499 and 42% for 500-999. The demands of managing a more complex infrastructure are clearly pushing businesses towards integration.
• Upper Midmarket & Beyond (1000+ employees): Here, the preference decisively tips towards platforms. In the 1000-2499 employee range, 46% prefer platforms, rising to 52% (a majority) for the 2500-4999 bracket. Aggregated, the Upper Midmarket (1000-4999) sees 49% favoring platforms. For these larger organizations, the benefits of integration, visibility, and centralized management become paramount.
• Overall View: While the overall SMB segment (1-999 employees) technically shows a 65% preference for point solutions due to the weight of the smaller company brackets, the Midmarket segment (100-4999 employees) demonstrates a much stronger inclination towards platforms, nearing parity and showing a clear preference in the upper tiers.

The overarching narrative is clear: as organizations grow in size and complexity, the perceived value and practical necessity of an integrated security platform increase significantly.

Why the Pivot to Platforms? Drivers of the Shift

In the digital age, where data is the new gold, the midmarket is facing a silent, yet devastating crisis: a glaring lack of cyberattack readiness. A recent study by Techaisle, titled "SMB & Midmarket Security Adoption Trends," paints a grim picture, revealing that many mid-sized businesses are woefully unprepared for the inevitable onslaught of cyber threats. The numbers do not lie, and they are screaming for attention.

The $11 Million Wake-Up Call

The average financial loss from security incidents in the midmarket sector is $11 million. This substantial amount can significantly impact a company's financial stability, undermine customer trust, and potentially lead to bankruptcy. This statistic alone underscores the urgent need for midmarket CEOs and IT managers to prioritize cybersecurity.

Moreover, it is concerning that 34% of midmarket firms lack a security protocol for responding to security incidents. This unpreparedness is akin to a fire department without an escape plan. When a cyberattack occurs, these companies are often left without a clear response strategy, resulting in increased confusion and substantially higher losses.

The Shadow Pandemic of Undetected Attacks

The study also reveals that 57% of midmarket firms have experienced a security incident, and most attacks go undetected. This is a shadow pandemic, where breaches occur silently, festering within systems for months, even years, before they are discovered. The longer an attacker has access, the more damage they can inflict, stealing sensitive data, disrupting operations, and demanding hefty ransoms.

Confidence Crisis and Risk Blindness

A significant concern is the lack of confidence among midmarket leaders. 36% of these firms acknowledge their uncertainty in recovering from a security incident primarily due to inadequate preparedness. Without comprehensive incident response plans, strong security infrastructure, and skilled personnel, recovery efforts can become highly challenging, often resulting in prolonged downtime and irreparable damage.

Additionally, 35% of midmarket firms do not have established risk frameworks. This deficiency in proactive risk assessment and management increases their susceptibility to various threats, including ransomware, phishing, data breaches, and insider attacks. Consequently, these firms face substantial vulnerabilities regarding their data security.

The Security Awareness Black Hole

A significant issue is the lack of security awareness training; 72% of midmarket firms do not provide it. This means employees, the weakest link in security, are vulnerable to phishing, malicious links, and weak passwords. Without training, they can inadvertently aid cyberattacks.

Cloud Security: A False Sense of Security

Cloud has brought immense benefits, but it has also created a false sense of security. 60% of midmarket firms feel that native cloud security is not sufficient. While cloud providers offer basic security features, they are not a silver bullet. Businesses must implement robust security measures, including data encryption, access controls, and threat monitoring, to protect their cloud assets.

Underprepared and Overwhelmed

The study ultimately underscores a widespread sense of inadequacy among midmarket firms. Nearly half, 49%, perceive themselves as less prepared than their counterparts. This perception of being outmatched and overwhelmed can result in complacency and inaction, thereby increasing their susceptibility.

The Path to Resilience: A Call to Action

The Techaisle study underscores the cybersecurity vulnerabilities facing midmarket companies. However, proactive measures can build robust defenses. 

The digital landscape for small and medium-sized businesses (SMBs) and midmarket enterprises is a minefield fraught with evolving threats and escalating costs. Techaisle’s latest 2025 SMB and Midmarket Security Adoption Surveys paint a stark picture: while some metrics suggest a plateau in security incidents, the financial impact, and perceived vulnerability are on the rise, driven by factors like AI-powered threats and persistent staffing challenges. This blog delves into the key findings, offering a comprehensive look at the state of cybersecurity for these critical segments.

The Bottom Line: Escalating Financial Losses Amidst Perceived Vulnerability

Let's start with the hard numbers. The average loss for SMBs due to security incidents in 2024 surged to US$1.6 million, up from US$1.4 million in 2023. This increase, despite a seemingly stable incident rate (44% in 2024, consistent with 2023 but down from 56% in 2021 and 2022), highlights a crucial point: the attacks are becoming more sophisticated and costly. While the frequency might be leveling, the severity and financial ramifications are intensifying. Adding to the complexity, despite the downward trend from 2021/2022, a concerning 68% of SMBs feel under-prepared compared to their peers, a slight uptick from 65% in the previous year. This discrepancy between perceived incident rates and felt vulnerability indicates a growing awareness of the sophistication of modern threats and a lingering sense of inadequacy in defense mechanisms.

The Threat Landscape: AI, Attacks, and Denial of Service

Techaisle's research identifies the top cybersecurity risks as cyberattacks, risks related to the use of AI, and denial-of-service (DoS) attacks. The rise of AI as a security risk is particularly noteworthy. In 2025, 56% of SMBs anticipate new security risks stemming from AI, up from 48% in 2024. This burgeoning concern reflects the dual-edged sword of AI: while it offers potential security benefits, it also introduces new attack vectors and amplifies existing ones. The escalating concern about AI-powered threats is logical. Bad actors increasingly leverage generative AI to craft sophisticated phishing campaigns, automate malware development, and amplify social engineering attacks. This trend is not just theoretical; it’s a tangible threat that SMBs are grappling with.

SMB buyers are acutely aware of the threat cyber attacks pose to their businesses. The Techaisle SMB and Midmarket Security Adoption Trends survey of 2,035 IT and business decision-makers from SMB and upper midmarket firms found that nearly 30% of SMBs (1-999 employees) consider cyber attacks to be among the top three issues facing their business, with an additional 26% stating that it is the most pressing/critical IT issue facing their firms. However, less than half of the respondents were more optimistic, choosing one of three responses: “it is a critical issue, but we have established best practices to control cyber attacks,” “it is one of many different issues, and we are satisfied with our status,” or “cyber attacks are not a significant issue.”

Drilling down, we see that small businesses (1-99 employees) are less inclined to see cyber threats as a top-one IT issue or a top-three business issue; this likely arises from the fact that SMBs have less mature IT operations (meaning that many factors that are controlled in larger firms could represent top IT issues) and that they face a wide array of daily business challenges. The data showing that small businesses are likelier to have established best practices to control cyber attacks probably isn’t grounded in market reality: small businesses that handle security internally lack the resources needed to deploy optimal defenses.

However, those relying on a capable third party may reasonably claim to use best practices. Most worrying from this data, though, are the top two bars, indicating that 22% see cybersecurity as “one of many issues, and we are satisfied with our status,” with another 12% claiming that “cyber-attacks are not a significant issue.” There are small businesses – for example, individuals billing larger businesses for hourly labor – for whom cyber attacks wouldn’t represent a critical issue. However, the data shows that one-third of small businesses are unconcerned about cybersecurity. In contrast, independent studies show that most small businesses fail within six months of being breached. Techaisle thinks these businesses likely struggle to find financial justification for investments in meaningful cyber defense and instead persuade themselves that this is not a real business problem for them. Techaisle suspects that many of these firms are tuned into vulnerabilities associated with digital business practices and might be persuadable concerning the value of cybersecurity if issues and remedies were clearly and convincingly presented to them.

Core midmarket (100-999 employees) and upper midmarket (1000-4999 employees) businesses take a more proactive view of these issues. Approximately two-thirds of respondents in each group view cyber attacks as either their most critical IT issue or a top-three business issue, with the core midmarket group evenly split between these positions and the upper midmarket more likely to identify cyber as a top IT concern. More than 80% of these organizations are focused on establishing effective cyber defenses and should be viewed as prime candidates for effective solutions.

Should SMBs worry about cyber attacks?

The data above begs a related question: Is the lack of concern demonstrated by small businesses rooted in reality – is it the case that one-third of respondents don’t have much to fear from cyber-attacks?