Security spending hits 'bright spot'

Channel margin opportunity as figure set to hit $13.5bn by 2006

Security spending will almost double from $7.1bn last year to $13.5bn in 2006, according to analyst Datamonitor, signalling a channel margin opportunity.

In a report entitled Enterprise Security Product Markets, Datamonitor claimed that much of the spending will go on intrusion detection systems, vulnerability assessment solutions and security management tools.

As security alerts continue to increase, and legislation and regulations force companies in a number of industries to respond to strict policy compliance matters, the demand for security management tools will rocket, the report predicted.

The analyst suggested that companies using the layered security model will drive further spending in this area, as businesses embed more technologies at the perimeter, within the network, on servers and on devices such as PCs and PDAs.

Tough competition has forced vendors to turn to new 'solution models', which has opened up a range of new markets, the analyst claimed.

Ian Williams, programme manager at Datamonitor's Enterprise Security team, said in the research report: "The more traditional security product markets, such as firewall and antivirus, demonstrated impressive growth in 2002.

"Although some vendors struggled in the face of stiff competition, the overall market increased by about 11 to 12 per cent from year end 2001 to 2002.

"While the market for other products, such as intrusion protection and vulnerability assessment solutions, will see stronger growth over the next few years, they will achieve greater success as part of a more complete security solutions package than by themselves."

Tim Pickard, strategic marketing director at RSA, agreed that the security sector was a "bright spot in IT spending", but he added that another growth area would be security as a driver for e-business.

"Traditionally, security spending has centred on internal enterprise applications or business-to-business applications," he said.

"However, in financial services, healthcare and the public sector, the need to reduce costs, increase sales via online channels, improve users' online experience and broaden access to the efficiency of government services, is driving major implementations of web-based systems."