Worldwide security software revenue is forecast to surpass $16.5 billion in 2010, an 11.3 percent increase from 2009 revenue of $14.8 billion, according to Gartner, Inc. Although the economic downturn slowed security revenue to 7 percent growth in 2009, organizations have indicated an intention to give priority to security budgets. "Most segments of the security software market will continue to grow over the next few years, although a significant degree of variation is expected between the more-established and less-mature technologies," said Ruggero Contu, principal research analyst at Gartner. "Overall, security will remain one of the fastest-growing areas within the enterprise software market."
Gartner analysts said security software markets will weather the current economic downturn better than in 2001 and 2002, because the market conditions are dramatically different in terms of maturity, penetration, confidence in IT, and geographic and vertical mix.
"Security software vendors that have a balanced mix of channel, new license and maintenance revenue streams and flexibility in contractual terms, such as software as a service (SaaS), open source and outsourcing, have the strongest options for continued growth and to even out the risk," Mr. Contu said. "Shrinking discretionary spending budgets have heightened competition for new maintenance and license revenue streams and placed a renewed emphasis on vendor performance and viability."
The consumer security software market remains the largest security software segment, with 2010 revenue projected to reach $4.2 billion in 2010, up from $3.9 billion in 2009. The endpoint protection platform (enterprise) market is the No. 2 security software segment, with revenue on pace to reach $3 billion in 2010, up from $2.9 billion in 2009.
The security software market continues to benefit from prioritization and demands related to compliance requirements, as well as the need to keep up with ever-increasing sophistication and volume in the threat landscape.
“During the next six to 12 months, products delivered as SaaS and appliances will continue overtaking traditional software licensing as the preferred purchasing methods,” said Matthew Cheung, senior research analyst at Gartner. “Delivery as a suite in subsegments such as enterprise endpoint security, identity and access management (IAM), and Web security will be the most prevalent product delivery types. Despite major vendors seeking to consolidate, opportunities exist for smaller niche players and product specialization, and local expertise is expected to remain a valued factor.”
Compliance remains an important driver across many segments, particularly user provisioning, security information and event management (SIEM) and mobile data protection.
"The growing sophistication of the threat landscape — with malware composed of multiple components that can be installed after the initial infection and the exploits of socially engineered trojans, which trick end users into downloading and executing malicious files — will push organizations and consumers to invest in endpoint security products in coming years," Mr. Cheung said.
IAM is a critical component of enterprises' security strategies. Gartner clients indicate that about 8 percent of their security budgets are currently dedicated to IAM. This area is composed of technologies with varying levels of maturity and adoption; overall, the IAM market is estimated to grow to more than $12 billion by 2014.
Additional detail is available in the Gartner report "Forecast Analysis: Security Software Markets, Worldwide, 2009-2014, 2Q10 Update". The report is available on Gartner's website at http://www.gartner.com/resId=1410013.
Gartner analysts will further examine the state of the IT security industry at the Gartner Security & Risk Management Summit 2010, 22-23 September, in London. Members of the media can register by contacting Ben Tudor, Gartner PR, at firstname.lastname@example.org. Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerSecurity.