Security Market Analysis

The market has recovered from a deceleration in the last reporting period, but growth still remains below the highpoints of the last five years. In 2007, the market grew by approximately 15%. Commoditisation is affecting the more established sectors of the security market, and this process will accelerate as a result of increasing pressure from the big IT infrastructure vendors. Commoditisation will be slow to blanket the entire security market because of the many product types within it, and the multitude of approaches to delivering security. The dynamic nature of the threat environment and business security needs means that the industry will have to remain dynamic in developing its offerings, and this will help to stave off the dead hand of commoditisation. These factors enabled the anti-malware sector to continue to grow at around 20%, while the perimeter security sector saw little growth.

We saw that the growth in revenues for managed security services was around 25% per year. It was notable that the range of services grew, for example, to include vulnerability analysis services for merchants to satisfy the requirements of the payment card industry. However, this sub-sector still accounts for only a small proportion of security spending. In future, the development of 'cloud-based' services in the service provider network will open up new opportunities, particularly in the SME sector.

Microsoft has as yet had little effect on the security market, and it has done more to help the other vendors by stimulating the market than to grab market share. However, it will eventually cause substantial disruption in the market and accelerate restructuring in the security vendor community.