Research firm International Data Corporation (IDC) recently forecast that worldwide revenues for security-related hardware, software and services will grow from $73.7 billion in 2016 to $101.6 billion in 2020.
That’s a compound annual growth rate of 8.3% — more than twice the rate of other IT spending.
“Today’s security climate is such that enterprises fear becoming victims of the next major cyberattack or cyber extortion,” Sean Pike, program vice president, Security Products said in a statement. “As a result, security has become heavily scrutinized by boards of directors demanding that security budgets are used wisely and solutions operate at peak efficiency.”
What markets will make the biggest security investments?
According to IDC four industries will account for 37% of worldwide security spending and will be the biggest investors in this space for the five-year period: banking, discrete manufacturing, federal/central government and process manufacturing.
According to IDC, healthcare, telecommunications, utilities, state/local government, and securities and investment services will grow 9% annually over the next five years.
By far, the largest investments will be made in security-related services, IDC predicts. After services, spending goes to security software, endpoint security, identity and access management, and security and vulnerability management software. Security hardware revenues will reach $14.0 billion in 2016, led by purchases of unified threat management systems.
One of the fastest-growing segments of the security products market will be user behavior analytics software with a compound annual growth rate of 12.2%.
Earlier, IDC found that worldwide cloud IT Infrastructure revenue grew 14.5% to $7.7 billion in the second quarter this year. The overall share of cloud IT infrastructure sales grew from 30.6% last year to 34.9% this year. Revenue from infrastructure sales to private cloud grew by 14.0% to $3.1 billion, and to public cloud by 14.9% to $4.6 billion,” according to this IDC statement.
Compare that to on-premises (or what IDC calls “traditional”) IT infrastructure segment. That segment decreased 6.1% year over year in the second quarter.
The biggest drivers in private cloud infrastructure are Ethernet switch, storage and server. “Public cloud growth was also led by Ethernet switch at 61.8% year-over-year growth, followed by server at 25.1% while storage revenue for public cloud declined 6.2% year over year. In traditional IT deployments, server declined the most (7.5% year over year) with Ethernet switch and storage declining 2.2% and 2.0%, respectively,” IDC said.
What does all of this mean?
Enterprises are struggling to maintain the rapid switch to cloud and cloud-related services and the tremendous security changes associated with it. They are pressed for IT security skills on all sides: on-premises traditional environments, cloud, mobile and IoT, and they are turning to managed security services providers and security analytics to help them extend their internal security capabilities.