With email spam, IT security, and cyberterrorism creeping up both the corporate and political agendas across Europe, enterprise IT security spending is set for significant growth, according to a recent brief from Forrester Research B.V. (Nasdaq: FORR). But enterprises will be hard pressed to find the skills internally to cope with an increasingly volatile IT security environment, thus creating opportunities for managed IT security services, the research firm asserts.
“Managed firewalls will claim 36 percent of the total 2008 market, generating €1.7 billion in revenues by 2008, at a CAGR of 25 percent,” said Forrester Research Senior Analyst Lars Godell. “Most large firms already have a firewall, but the lack of internal skills, high cost of internal management, and a more mature managed service market will drive conversion to managed firewall services.
“Managed intrusion detection systems (IDS) will also grow strongly at a rate of 47 percent per year, and will account for €1.5 billion in revenues by 2008, representing 32 percent of the total managed IT security market. And with EU approval of digital signatures, we expect managed PKI certificates to grow rapidly at a CAGR of 52 percent, reaching €1.1 billion in 2008. Finally, growing awareness, regulatory mandates like Basel II on assessing operational risk, and market maturity will drive adoption of vulnerability assessment services — but overall they will represent only 7 percent of the 2008 market, generating €318 million in revenue by 2008.”
While telcos like BT and IT outsourcers like EDS slug it out over big outsourcing contracts for large multinationals, Forrester believes that SMEs — 99.75 percent of all European firms — are the untapped opportunity for managed security vendors. In 2008, Forrester calculates that SMEs will account for €3 billion, or 66 percent of the total €4.6 billion managed IT security market. By contrast, Europe’s largest firms, which can afford to run a 24/7/365 intrusion detection service in-house, will represent only 8 percent of the 2008 market. Companies with fewer than 10 employees, which represent the bulk of European firms, simply will not have the scale or funds to buy expensive, complex managed IT security services.