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Insecure about Security?




Analyst firms have nothing but good words for the booming security market. The Yankee Group, for one, predicted global demand for network security would generate nearly $13 billion in revenue in 2004. What does this mean for the agent channel? It means the time is now to get in on a very lucrative market and provide a much-needed service.

According to Yankee Group, the security market is made up of three key areas: threat mitigation, command and control, and managed security services.

The firm says threat mitigation means warding off business disruption caused by worms and viruses, denial-of-service attacks, intrusions and buffer overflows. Subcategories of threat mitigation include perimeter firewalls, network integrity systems, application gateways and system integrity software. These aspects represent 42 percent of the security market and brought in an estimated $5.4 billion in 2004, say Yankee Group analysts.

The second area Yankee Group addresses is command and control, which manage a networks security operations. Command and control including identity and security event management, vulnerability assessments and patching, and intrusion detection audits represent 40 percent of the security market and were estimated to gross $5.2 billion in 2004.

Finally, the firm says managed security services made up $2.3 billion, or 18 percent, of the overall $12.9 security market in 2004. In Yankee Groups view, such services include augmenting in-house operational staff, enhancing security response, reducing operational expenses, and improving the security process and strategy.

Right now, Cisco Systems Inc., Symantec and VeriSign lead the security market, according to Yankee Group, but Microsoft Corp. and a number of privately held companies, quickly are gaining ground.

Opportunity, Opportunity, Opportunity

Meanwhile, a report from Infonetics Research shows end users are looking into a variety of network security solutions in response to world events, increased government spending, and paranoia and real threats. Infonetics says appliances, routers and switches are the mainstays of integrated security.

While many people have been watching the security appliance market with great interest, they tend to overlook the extent to which security is actually deployed through routers and switches, says Jeff Wilson, principal analyst at Infonetics Research and lead analyst of the study, User Plans for Security Products and Services, North America 2004. Just as distributed Internet connectivity and the need for companies of all sizes to secure their networks drove the integration of multiple security technologies into single products, these same factors also drove network product manufacturers to integrate security into routers and switches.

Infonetics says most of the surveys respondents are looking to buy appliances that have between 100MB and 1GB aggregate performance, with demand for 1GB, 2GB and 5GB-capable equipment increasing over the next two years. Thirty percent of respondents already use managed security, while another 36 percent plan to by 2006. Infonetics also predicts the use of switches with integrated security will rise from about a third now to 44 percent by 2006. WLANs and handheld devices also make up another top area of opportunity, says Infonetics. For now, secure routers and integrated appliances are respondents preferred network security devices, and demand is predicted to rise slightly to 68 percent in 2006.

Master agencies are jumping on the security bandwagon, too, helping agents take solutions to the masses. For example, Telecom Brokerage Inc. is an authorized distributor of ServGate Technologies Inc. security devices. The company sells ServGate products to agents looking for CPE-based spam and virus protection. The response from the field has been overwhelmingly positive, said Geoff Shepstone, president of TBI, in an interview with T@G last year. AB&T Telecom offers managed services, network monitoring and security; and IPtimize has its Internet Security Evaluation, an automated security audit and management service.

Editors Note: For more on how to capitalize on security sales, click over to this months Business Intelligence interview with Ken Mercer of master agency Telecom Brokerage Inc.


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