Managed Security Services Market Growing At 12 Percent

ROCKVILLE, Md. – The North American managed security services market experienced 12 percent growth in 2008, with revenue reaching $1.06 billion during the year. According to Frost & Sullivan, the market segment will continue to grow to $2.4 billion in 2015.

Five key factors are driving the market to grow in a fairly solid way, said Martha Vazquez, research analyst for information and communications at Frost & Sullivan. These include increasingly complex and innovative threats, the highly publicized cost of data breaches, an increasing need to comply with new legislation, the slow economy pushing organizations to outsource as a cost saving means, and an increase in managed security service providers (MSSPs) in their pursuit of new market segments.

“There was a 12 percent growth compared to 2007 in North America. Estimated revenues in [North America] in 2008 were at $1 billion. Still a pretty healthy growth considering the economic problems that are being experienced,” Vazquez said.

With some large financial businesses consolidating and merging to avoid going bankrupt in 2008, and the financial market being a strong vertical for managed security services, it’s expected that some business will be lost because of the acquisitions and mergers, she said. However, more businesses in other verticals are examining outsourcing as a way to cut costs or budget, which is helping to drive the managed security service market up.

“We expect the slow economy to be a driver in the MSSP market for the next few years as many businesses will be looking at cutting overhead and saving on costs,” Vazquez said.

In fact, the market beat expectations in 2008, growing at 12 percent instead of Frost & Sullivan’s projected nine percent, she said. The research firm expects the compound annual growth rate for managed security services to be 12.3 percent between 2008 and 2015.

Demand for managed security services will continue to stay strong in part because the capabilities of security products keep improving. The number and variety of network attacks also continues to increase.

“Threats continue to be malicious and complex, and malware is increasing alarmingly, highlighting the need for companies to defend all the endpoints attached to the corporate network,” Vazquez said. “MSSP providers have realized that throughout the industry the key to managing these threats is to seize and maintain the initiative through an increasingly preventative posture.”

With security something that organizations need to keep on top of, many are finding it easiest to outsource to MSSPs so they can concentrate on their core business processes, she said. Compliance regulations also continue to become more important, especially in light of highly publicized breaches and their costs, so that’s scaring companies into finding the best method for them to comply.

“Compliance is still one of the top drivers for the MSSP market and within network security as well. We don’t see that going away anytime soon; if anything it will remain a strong driver throughout 2015,” Vazquez said.

This column was written by Chris Talbot of ConnectIT, an IntegratedMarCompany