With more enterprises moving their business-technology systems to the cloud — and moving away from, or at least investing a lot less in, their on-premises apps and infrastructure — it only makes sense that security functions delivered as cloud services would follow suit.
As it turns out, they are.
The on-premises security market is still growing, but the gains look meager next to the accelerating growth of cloud-based security services. According to research firm Gartner, worldwide security software sales reached $21.4 billion in 2014, an increase of 5.3 percent over the previous year. Adoption is not uniform across techs, however. While vendors saw gains in certain security software segments, such as security information and event management, secure Web gateway, identity governance and administration, and enterprise content-aware data loss prevention, that growth was not enough to offset poor endpoint protection sales.
“Even though the SWG [secure Web gateway] segment experienced single-digit growth in 2014, cloud-based and hybrid SWG deployments are becoming increasingly popular,” said Sid Deshpande, principal research analyst at Gartner. “As organizations’ corporate data traffic becomes more exposed to the Internet and moves out of the control of traditional network security boundaries, SWG technologies continue to be an important piece of the overall security technology strategy of most enterprises.”
With the U.S. GDP growing at less than 3 percent annually, 5 percent year-over-year growth for on-site applications is nothing to grumble about, but it’s considerably lower than the overall uptick in cloud security software. The research firm Markets and Markets expects the global cloud security market to grow from $4.20 billion in 2014 to $8.71 billion by 2019 — that’s a CAGR of 15.7 percent from 2014 to 2019.
Stepping back, many of your customers’ IT leaders no doubt remain skeptical about the overall level of cloud adoption in their organizations. But the numbers don’t lie. IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker shows total spending on cloud IT infrastructure (server, storage and Ethernet switch, excluding double-counting between server and storage) will grow by 24.1 percent and reach $32.6 billion in 2015. This will account for one-third of overall end-user spending on enterprise IT infrastructure. Meanwhile, spending on private-cloud IT infrastructure in 2015 will grow by 15.8 percent year-over-year, to $12.1 billion, according to IDC, while spending on public cloud IT infrastructure will increase by 29.6 percent, to $20.5 billion.
In its five-year forecast, IDC says cloud IT infrastructure spending will grow at a CAGR of 15.1 percent, to hit $53.1 billion by 2019, accounting for 46 percent of total spending on enterprise IT infrastructure. At the same time, the research firm expects traditional IT infrastructure CAGR to fall at a rate of 1.7 percent.
Cloud-based security is taking off in tandem. For most partners, it’s about ease of deployment and management. There’s no need to maintain on-premises equipment at customer sites that requires expertise to operate; updating security software and keeping log monitoring and intrusion detection and prevision systems and firewalls properly tuned requires skills that are increasingly more difficult to hire. Cloud security solutions remove that burden and therefore lower operating costs.
This is a big reason why Research and Markets earlier this year predicted that the MSSP market would more than double before the end of the decade, from $14.3 billion in 2014 to $31.9 billion by 2019. Because so many business processes and data are moving to the cloud, it just makes sense that security services also be cloud-based and include identity and vulnerability management, security data analytics and more. And, in what it calls “MSS 2.0,” IDC expects more MSSPs to provide deeper and broader security services to the market, including threat intelligence.
Of course, it’s not only large enterprises that will be embracing MSSPs; as small and midsize businesses continue to move to cloud, they will rely almost entirely on cloud-based security controls, many experts predict. If you have yet to add a security practice or partner up with some innovative vendors, now might be the time. I recently outlined five cybersecurity gaps that spell opportunity in 2016. Any of them could help you capture some of that revenue.
George W. Hulme is an internationally recognized security and business technology writer. For more than 20 years, Hulme has written about business, technology and IT security topics. From March 2000 through March 2005, as senior editor at InformationWeek magazine, he covered the IT security and homeland security beats.
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August 22 2019 @ 21:32:04 UTC