Security software to grow 11pc in 2008

23 Apr 2008

Security software sellers are being tipped to grow income by 11pc this year by analyst firm Gartner.

Gartner puts the reason for the increase down to growing awareness of the damage caused by security breaches, together with growing demand for more flexibility and remote-working opportunities in the workforce.

In total, Gartner expects worldwide security software revenue to reach US$10.5bn in 2008, an 11.2pc increase from 2007. The security software market is forecast to surpass US$13.1bn in 2012.

“Organisations are increasingly accepting the need to have a more ‘open’ connectivity with business third parties,” said Ruggero Contu, principal research analyst at Gartner. “Consequently, assessing third-party security and defining how to securely communicate are becoming critical factors for businesses.”

SMEs in particular are increasing their interest in security technology and services and are gradually moving away from stand-alone tools to integrated multifunctional products, said Contu.

Compliance with government regulations, such as the Sarbanes-Oxley Act, continues to play a significant role in security spending decisions, Gartner said. The analyst firm suggested that investment is often justified because the downside of breaches and failure is so great.

“Security spending is driven by a variety of pressing concerns, the most immediate of which is the need to keep ‘the bad guys out’ through defensive measures such as next-generation firewalls,” elaborated Contu. “However, letting ‘the good guys’ in through identity and access management is where business benefits and return on investment can be more clearly shown.”

Gartner did suggest that economic instability is expected to weigh down IT budgets, particularly for the purchase of new software licences. High levels of merger-and-acquisition activity may also inhibit new purchases because end users are wary of investing in new tools whose support could end following a merger or acquisition.

The company said the introduction of large players like Microsoft and Google to the market will push prices down, affecting overall revenue growth in the next few years.

Gartner speculates that there is likely to be a greater push towards software-as-a-service delivery models.

“Organisations are looking to optimise their IT infrastructure and trying to minimise the complexity of their product portfolios,” declared Contu. “In the long run, we expect to see more converged security products, with increased pricing pressure on vendors”

By Niall Byrne