E-Mail Security Vendors Riding High

By John Moore  |  Posted 2005-11-07 Print this article Print

The market for e-mail security products and services will grow from $3.7 billion this year to $5.5 billion by 2010, according to a recent report.

Ferris Research last month painted an attractive picture of the e-mail security sector.

The San Francisco-based research house, which focuses on messaging and collaboration, said in a report that the market for e-mail security products and services will grow from $3.7 billion this year to $5.5 billion by 2010. The near-term annual revenue growth rate will hover near 25 percent. That seems a favorable outlook for the providers of e-mail security software, appliances and managed services.

Click here to read about how Web threats are keeping users away.
Whats good for the e-mail security vendors is also good for resellers and integrators. Vendors increasingly rely on the channel to move their products and, in some cases, have assembled extensive partner networks. In the managed e-mail security services space, Postini has signed more than 100 resellers and VARs.

MailFrontier, which makes e-mail gateway servers and appliances, aims to move all its sales to the channel within a year.

Richi Jennings, lead analyst in Ferris Researchs e-mail security practice, said the percentage of business flowing through the channel varies wildly from vendor to vendor. But the overall pattern points to more business for resellers.

"The trend is clearly towards selling through the channel," Jennings said. "For example, Barracuda [Networks] already sells almost exclusively through the channel, but competitors such as CipherTrust are around fifty-fifty and increasing their channel mix."

Barracuda and CipherTrust manufacture e-mail security appliances. Barracuda markets through channel partners such as distributor Synnex. CipherTrusts channel partner program operates in North America, Latin America, Europe and Asia.

Makers of appliances—and, by extension, their channel partners—find themselves in the hottest e-mail security market segment. Ferris Researchs report, "The E-Mail Security Market, 2005-2010," found that the market for e-mail security appliances is outpacing the market for software and hosted services.

Appliance vendors typically seek volume sales to SMBs (small and midsize businesses), where many resellers make their living. Vendors and channel partners find their interests intersect in this product area.

But Ferris Research noted that the appliance growth rate will slow to match the overall markets growth in the next 12 to 24 months. By 2007, the company predicted, most customers planning to switch to appliances will already have done so.

Ferris Research identified another trend with implications for the channel: Customers increasingly pursue single-vendor solutions for e-mail security. A year or two ago, customers tended to follow a best-of-breed approach. This buying pattern favors resellers with strategic partnerships with individual vendors as opposed to those with ad hoc relationships with multiple vendors in the e-mail security mix.

But for resellers who want to ride the steep side of the markets growth curve, the time to act is now. Ferris Research believes the markets stellar growth rate will fall back to earth after 2007. At that point, revenue will level off, company officials said.

In the meantime, solid growth prospects and vendors with a channel predilection combine to make e-mail security look like a winner.

John Moore is a writer with Ziff Davis Internet. Contact him at john_moore@ziffdavis.com.

Check out eWEEK.coms for the latest security news, reviews and analysis. And for insights on security coverage around the Web, take a look at eWEEK.com Security Center Editor Larry Seltzers Weblog.
John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.


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