AI for hire: How the IT channel can close the cyber capability gap

Mid-market businesses occupy an awkward spot when it comes to cyber defences. They are among those that most need artificial intelligence (AI)-enabled cyber threat protection, but rarely do they have the extensive resources needed to invest in it. Channel partners with AI-augmented solutions can make all the difference.

Mid-market organisations in Australia, and across the broader Asia Pacific and Japan region, have made tangible progress strengthening their cybersecurity posture, recent research commissioned by Palo Alto Networks and prepared by Tech Research Asia shows. However, threats have grown more sophisticated as AI reshapes the threat landscape, and yet many organisations are only in the early stages of operationalising AI within their security workflows.

According to Palo Alto Networks’ 2025 Cybersecurity Resilience in Mid-Market Organisations benchmark study, AI capabilities ranked among the lowest-performing areas in maturity across the region – including in Australia. This gap between ambition and execution is growing more critical as cyber budgets rise and the threat landscape evolves.

Assessing AI in security

AI has long powered cybersecurity software, but as cyber criminals increasingly adopt it, AI has become an essential, frontline weapon for cybersecurity professionals. Despite its importance, AI-augmented cybersecurity is one of the areas where businesses have made the least progress in adoption.

A big part of the problem is that operationally, AI-augmented cybersecurity investment strategies in the region are falling short of where they need to be. As a result, maturity in this area is lacking, compared to cybersecurity categories such as data loss protection, and identity and access management, which are relatively strong in terms of maturity across the region.

Mid-market organisations face a significant challenge in cyber defense due to limited budgets. Though they are prime targets for cyber criminals, their tight tech budgets and smaller IT teams often mean they can only manage so much internally. Security skills are in particularly short demand in Australia, especially those that involve AI.

Pathways to progress

Despite AI-augmented cybersecurity’s maturity barriers, cybersecurity remains a top-three business priority for Asia Pacific and Japan’s mid-market, focusing on protecting customers, intellectual property, and supporting digital transformation. This means that, although investment and skill may be lacking, the will is certainly there to do more.

When you consider that 13 percent of mid-market businesses across the region have no formally-appointed cybersecurity role – of which 10 percent don’t assign anyone to cybersecurity responsibilities – it becomes clear where some of the gaps preventing cybersecurity adoption and maturity emerge. Against that backdrop, there is a burgeoning appetite for external help.

According to the report, 53 percent of mid-market organisations across the region rely on IT partners to support their cybersecurity activities. Such reliance on IT and security service providers will only increase over time and is anticipated to hit 79 percent by 2027 as the rising complexity of developing AI-enabled cybersecurity defences accelerates demand for external partners.

The partner opportunity

With the anticipated rise in reliance on external IT providers for cybersecurity support, channel partners are well positioned to make the most of the coming demand. Moreover, even though just over half of mid-market businesses already rely on IT partners, close to half are still yet to partner up with an external expert to help them with their cybersecurity goals.

That means there remains a substantial, untapped market that is likely to only see increased value in external providers as cyber challenges increase in the coming years. Partners that position themselves appropriately to appeal to the mid-market businesses yet to engage outside help for their cybersecurity needs could capture much of that new business as it grows.

Appealing to the top attributes currently influencing partner selection among mid-market businesses is key to taking advantage of these emerging opportunities. Right now, cyber resiliency capabilities, a proven track record and the ability to integrate new solutions with existing technology are the top attributes in Australia that influence partner selection.

Becoming a trusted advisor

Cloud and emerging technology, security monitoring and operation, and application and data security are the key areas where demand for partners is expected to be needed most in the coming two years within the Australian market. Cybersecurity specialists that focus on these areas are likely to increase their chances of becoming trusted partners for the mid-market as demand grows.

Cybersecurity platforms that leverage AI-powered threat detection, automated response and security orchestration are fast becoming the go-to option for partners wanting to build out a complete cybersecurity offering. Such platforms can give IT providers the tools and resources needed to meet the top needs of mid-market businesses while building out a comprehensive suite of additional, value-added services.

A unified, platform-based approach that integrates AI-driven capabilities to enhance performance, streamline operations and strengthen protection across the board can give partners the tools they need to make the most of the evolving opportunities in the Australian mid-market by closing the cyber capability gap that has become so prominent in the segment.