Market growth

Another day, another data breach and another reason why the global information security market is predicted1 to grow at a CAGR of 7.0% between 2015 and 2018.

Information Security Clearthought 2016 – Market growth Image

Cases like the utilities hack which cut power to the whole of Western Ukraine, the Hollywood hospital which was forced to pay €15,000 to get its data back after a ransomware incident, and the recent huge data breach at Yahoo, all demonstrate the potentially devastating impact of security breaches. It is precisely why corporates and public sector institutions alike are investing so heavily to keep their systems, applications and devices safe from new attacks. It is estimated1 that the global cost of cybercrime is more than €360bn annually.

The total information security market can be split in a number of ways with Gartner2 dividing it between security services (including consulting and outsourcing), network security equipment, infrastructure protection and identity and access management.

For software vendors and IT service providers, the size of the market just keeps growing, accelerating start-ups into serious contenders and segment leaders onto the global technology stage.

US vendors and service providers, including the likes of IBM, Symantec and Cisco, still lead the way in terms of market share by revenue, but European counterparts are quickly making their presence felt with UK companies such as Mimecast and Sophos making it into the top 20 of Cybersecurity Ventures’ list of the top 500 hottest companies. The estimated annual cost of cybercrime to UK financial institutions alone is put at around £2.5bn3.

As the European home of so many global technology leaders, Ireland is also particularly well placed to benefit from increased global investment and has a real opportunity to position itself as a world class cyber security hub, whilst the French market is being driven by government initiatives for the country to emerge as a leading player in cyber defence.

Whilst markets such as endpoint protection platforms, consumer security software and secure email gateways have started to become commoditised, areas such as managed security services, security testing and data loss prevention are growing much more quickly, driving strong growth in the total market.

There is also a great deal of disparity between different vertical markets in their level of investment in security software and services.

Information Security Clearthought 2016 – Market growth Image

 

The financial services industry, for example, and other markets with critical sensitive data such as defence, have led the way in terms of security investment, whilst sectors such as construction have traditionally invested less in protecting their systems and represent a potential new area of growth for the industry.

Another key area of growth will be in the SME market, which has historically underinvested in security provisions both out of prohibitive costs and lack of awareness. As the market matures and awareness develops, the SME segment will represent a massive opportunity and should sustain growth in the industry for many years to come.

1 IDC Worldwide IT security products 2014-2018 Forecast
2 McAfee: Net Losses: Estimating the Global Cost of Cybercrime
3 Gartner Forecast: Information Security Worldwide 2014
4 IBM Security Intelligence: Security Intelligence in Financial Services

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