Global revenues in enterprise security technology are predicted to reach $13.5 billion by 2006, up from $7.1 billion in 2002 last year.
Intrusion protection, vulnerability assessment technology and security management tools are tipped to be key revenue generators in a new report by market watcher Datamonitor called Enterprise Security Product Markets.
While North America will remain the largest market, predicted to reach $6.9 billion in 2006, Latin America, followed by Asia Pacific will be the fastest growing markets during the 2002-2006 period. Datamonitor expects security spending to increase by 25 per cent on average each a year in Latin America, and 23 per cent in Asia Pacific over its forecast period. Between 2002-2006, Datamonitor predicts the security market in Europe, the Middle East and Africa (EMEA) will be enjoy a compound annual growth rate of 18 per cent.
Which is nice.
However, not everything is rosy in the security garden.
Datamonitor reports that security product vendors with more than one product line in their portfolio have often performed well in one market but have mostly failed to increase sales of their other products. The failure to achieve significant cross-sell opportunities has been a frustrating experience for vendors that have invested heavily in the 'one-stop shop' school of security product promotion.
According to Datamonitor, positioning best-selling solutions within an overall security framework, will allow them to better leverage their best-of-breed products to greater effect and enable them to gain more revenues from areas where stronger growth is predicted in the future.
AV and firewalls still raking it in
Anti-virus and firewall products have seen strong growth, despite being the most mature product group in the security arena. Datamonitor attributes this to a number of recent high-profile virus outbreaks that made sure perimeter protection technologies stayed prominent in buyers' minds.
One of the new protection models, 'layered security', will help ensure that these markets continue to grow. The layered security approach encourages enterprises to embed more technologies at each layer of the enterprise: at the perimeter, within the network, on servers, and on client devices such as PCs and PDAs. Datamonitor reckons this approach will boost sales in traditional security technologies as well as open up sales in complementary markets such as threat protection and content filtering.
Meanwhile, the need to manage increasingly complex security systems and regulatory pressures are fuelling the growth of the security management tools market.
The market for security management tools generated global revenues of $371 million in 2002. By 2006, Datamonitor predicts, this market will be worth $1.1 billion, growing by 30 per cent a year over the next four years.
The intrusion protection and vulnerability assessment market generated revenues of $642 milllion in 2002. Datamonitor predicts this market will grow 20 per cent year on year to reach $1.3 billion by 2006.
Ian Williams, Programme Manager for Datamonitor's Enterprise Security team, commented: "The more traditional security product markets such as firewall and anti-virus demonstrated some impressive growth in 2002 and although some vendors struggled in the face of stiff competition, the overall market increased by around 11-12 per cent from year-end 2001 to 2002.
"While the market for other products such as intrusion protection and vulnerability assessment solutions will see stronger growth over the next few years than previously experienced, they will achieve greater success as part of a more complete security solutions package than by themselves," he added. ®