SAN JOSE, Ca. – According to a new IDC forecast, the U.S. managed security services market is expected to increase to $2.8 billion by 2012, representing a compound annual growth rate of 17.2 per cent. In 2007, the managed security services market was valued at approximately $1.3 billion in 2007, which was an increase of almost 20 per cent over 2006.
“If you look at the security service market in general, we’ve seen a significant increase around services and a shift from reactive security strategies to a proactive one, which is why we’ve seen a growth,” said Irida Xheneti, research analyst with IDC’s Security Services group.
She added that among the many dynamics shaping the U.S. managed security services market today, growing security complexity, the evolving pace of today’s technology and stringent compliance mandates have also driven demand and spending for managed security services.
“An increase in security complexity means technology has gotten complex and deploying the technology has become even more complex and a proactive security strategy helps companies remain competitive,” Xheneti said.
IDC’s latest study indicated that while new technology initiatives have empowered organizations for greater growth opportunities, they have also become the source of many IT security vulnerabilities. To protect against any vulnerabilities, organizations are required to keep up with the rapidly evolving and sophisticated threats. For many organizations, security management has become one of the main IT and business challenges.
Given these dynamics, IDC indicated that the managed security services market will continue to experience significant growth during the forecast period as a result of some market developments such as the U.S. managed security services market will continue to experience double-digit growth rates for the next five years due to an increase in security complexity, internal and external pressures and the increased demand for cost-effective security management solutions.
Services that enable customers to mitigate and manage risk and meet compliance regulations such as Sarbanes-Oxley, PCI and HIPPAA while increasing productivity will continue to be in high demand.
“It is [also] expensive to hire security expertise in-house,” Xheneti noted. “There are not many out there and [those that are] come at an expensive rate.” She added that this will continue to be one of the core drivers for managed security services spending.
Other issues affecting the managed security services market includes the fact that it remains fragmented, with leading contenders such telecommunications companies like Verizon, systems integrators (SIs) like CSC and EDS and traditional security product (SPs) vendors such as Symantec making competition intense.
“But it has reached a maturity point, the market growth we are seeing will start to slow down as hosted services or Security-as-a-Service and some other services around UTM managed services will take growth away,” observed Xheneti.
Mergers and acquisitions of smaller players is one way to make the market un-fragmented, she added. The market will continue to see more merger and acquisition activity in this space as larger, more established SIs and SPs acquire security assets and leverage their existing channels to drive solutions to market.
Xheneti said companies leading the way in the managed security services space are IBM ISS and system integrators such as EDS that have been seeing significant growth around transformation services.
Aside from learning who the main players are in the managed security services space, Xheneti said other key takeaways of the IDC study is that companies will learn about what they can do to capture the growth that will occur in the next five years.
“If I want to come into this market, what is important, do I partner with a player in the market or do I acquire someone to boost my services and whether I have a channel strategy or direct strategy around these services.”
This column was written by Vanessa Ho of ConnectIT, an IntegratedMarCompany
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