Economic Outlook: Enterprise Security (Market Focus)

The enterprise security market is changing rapidly and will continue to change in the medium term. The fragmented state of the market, both in terms of vendors and solution offerings, is not sustainable and the industry will have to adapt to end-users' demands and to market forces driving towards consolidation and integration.



Report Highlights
End-users are increasingly dissatisfied with the cost and complexity associated with managing multiple end-point security solutions. Vendors are certainly aware of this, but it is still unclear how and when they will respond to this pressure. The penetration of Firewalls and VPNs is high and will approach saturation over the next 24 months. This foretells a deceleration in growth for this market. The penetration of security and vulnerability management solutions is still relatively low, but is expected to grow rapidly over the coming 24 months. The current level of penetration indicates that there will still be scope for growth in this market beyond the 24 month timeframe.


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CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
Grappling with a diverse, fragmented and rapidly evolving market 2
The scope of enterprise security solutions is rapidly changing 3
An immature security threat landscape will impede the maturity of the market 3
Security will grow, but will shift away from perimeter security and point solutions 4
Customers are demanding more product integration in order to simplify management and reduce costs 5
Proactive and measurable security processes are rapidly becoming a priority 6
Raising efficiency is a more pressing concern, pushing regulatory compliance behind 8
Security vendors can no longer rely on regulatory compliance concerns to drive the market forward 9
Enterprises will be willing to spend more on products to realize savings in management and integration costs 9
The Firewall & VPN market is more mature than other areas of security 10
Security and vulnerability management represents the best opportunity for growth in the market 11
Despite continued M&A activity the enterprise security market remains fragmented 13
The leading vendors are far from dominating the enterprise security market 14
As new threats emerge, small vendors will continue to drive innovation 15
ACTIONS 15
The following strategic recommendations will enable vendors to improve their market positioning 15
APPENDIX 16
Extended methodology 16
Further reading 16
Ask the analyst 16

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Table 1: Enterprise security revenues from 2006 to 2010, in US$ millions 5
Table 2: Major strategic goals of IT departments this year 7
Table 3: IT investment objectives 9
Table 4: Current and planned investment in IT security technologies 11
Table 5: Total value and number of M&A deals in the security space 14


Figure 1: Global enterprise security market forecast 4
Figure 2: The majority of IT decision makers prefer deploying integrated security products 5
Figure 3: System simplification and infrastructure standardization are the most important IT priorities 6
Figure 4: Regulatory compliance remains important, but is no longer a priority for most enterprises 8
Figure 5: Security markets vary in their maturity with the firewall market approaching saturation 10
Figure 6: The rate of price erosion will vary greatly between different areas of enterprise security 12
Figure 7: M&A activity remains strong as consolidation gradually takes hold 13
Figure 8: Leading security vendors vary greatly in their technology coverage 14

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