Worldwide spending on security-related hardware, software, and services is forecast to reach US$119.9 billion in 2021, triggered by new threats, increased regulations and digital investments.
With nearly every industry investing in security solutions to meet a wide range of threats and requirements, IDC findings suggest that spending is expected to achieve a compound annual growth rate (CAGR) of 9.6 per cent over the 2016-2021 forecast period.
In addition, worldwide spending on security products and services will total US$83.5 billion in 2017, an increase of 10.3 per cent over 2016.
“Three overarching trends are driving security spending: a dynamic threat landscape, increasing regulatory pressures, and architectural changes spurred by digital transformation initiatives,” IDC program vice president of security Sean Pike said.
“While IDC expects spending to continue growing, organisations are actively searching for product and service efficiencies that maximise spend in order to fully address such complex challenges.”
Looking ahead, IDC expects security spending to be somewhat evenly spread across four industry sectors in 2017: distribution and services (US$19.7 billion), public sector (US$18.6 billion), manufacturing and resources (US$16.4 billion) and financial (US$16.3 billion).
By 2021, however, the financial sector is forecast to move ahead of manufacturing and resources due to a 2016-2021 CAGR of 10.2 per cent.
Similarly, public sector security spending will nearly pull even with distribution and services by 2021 with a CAGR of 10.3 per cent - the fastest growing sector over the five-year forecast period will be infrastructure with a CAGR of 11.8 per cent.
“Ever-changing security threats, fear of data breaches, and regulatory compliance will continue to drive security investments across all industries,” IDC program director Eileen Smith added.
“On a global basis, banks, discrete manufacturers, and federal/central government agencies will spend the most on security products and services throughout the forecast. Combined, these three industries will contribute to 30 per cent of the worldwide total spending in 2017.”
In addition to being among the industries spending the most on security solutions in 2017, federal/central government and banking will be two of the industries that will see the fastest growth in security spending over the five-year forecast, with CAGRs of 10.9 per cent and 10.7 per cent, respectively.
The industry that will see the fastest growth is telecommunications, with a CAGR of 12.6 per cent - this growth will enable telecommunications to become the fourth largest industry in terms of total security spend in 2021, moving ahead of the process manufacturing and professional services industries.
From a partner perspective, more than 80 per cent of security spending in 2017 will go to services and software.
Specifically, services spending will be led by two of the largest technology categories – managed security services (US$15.25 billion) and integration services (US$12.5 billion).
Meanwhile, software spending will be focused on three categories – endpoint security, identity and access management, and security and vulnerability management – that will make up more than 75 per cent of the software total this year.
Hardware spending will be significantly smaller throughout the forecast, dominated by network security solutions (US$13.7 billion in 2017).
In addition to being the two largest technology categories, managed security services and network security will also be the fastest growing categories during the 2016-2021 forecast with CAGRs of 14.3 per cent and 11.4 per cent, respectively.
From a company size perspective, large and very large businesses (those with more than 500 employees) will be responsible for roughly two thirds of all security-related spending throughout the forecast.
IDC also expects very large businesses (more than 1,000 employees) to pass the US$50 billion spending level in 2019. Small and medium businesses (SMBs) will also be a significant contributor to BDA spending with the remaining one third of worldwide revenues coming from companies with fewer than 500 employees.