SERVICES are predicted to be the top money-spinner in the IT security market, accounting for 40% of revenues that are expected to reach almost $450million by 2008.
A report released by research firm IDC shows the New Zealand IT security market was worth over $142million in 2003 and forecasts a compound annual growth rate (CAGR) of 26.5%
But market analyst Jane McPherson says resellers and vendors need to adopt an integrated approach to solving their customer’s security issues if they are to share a part of this bounty.
“Customers are moving away from purchasing point products that address a specific concern to more proactive, centralised and integrated solutions,” she says.
Security hardware will see the fastest at a CAGR of 34.7%, followed by services with a CAGR of 25%.
Software on the other hand will grow slower at 16.8% CAGR, after experiencing a decline of 1.4% last year — a far cry from 11% growth IDC predicted in July.
“This was due to the strength of the New Zealand dollar that saw many companies delay software spending overall,” says McPherson.
McPherson says changes in the security software market would see increased partnering among vendors in order to provide integrated solutions.
Two companies that have already taken steps to keep ahead of the trends are security specialist Expert Solutions Providers (ESP) and software vendor Trend Micro.
ESP is launching a comprehensive consulting arm in April, while Trend Micro last month launched the first appliance it developed on its own, the Network VirusWall.
Jon King of ESP says he agrees with the forecast of the strong growth in both hardware and security services.
“I expect to see the market become commoditised with hardware appliances becoming more prevalent,” he says, adding that services would also be required.
“This will become the barrier to entry into the market as resellers would need good knowledge of business processes and policies to provide a good business solution.”
ESP’s new advisory service will aid companies to draw up policies and procedures surrounding IT deployment and security.
Trend Micro New Zealand country manager Damian Thompson also foresees great growth in the local security market.
“We are seeing a lot of growth and have now expanded our team here to three.” Thompson says IT budgets were receiving the attention they deserved again with companies looking to improve their business processes, creating ample opportunities for service orientated resellers. On the hardware front, he says the company has partnered with the likes of NetScreen and Cisco to develop appliances to create integrated offerings and would continue this trend in order to focus on its core expertise of anti-virus and content filtering.