Network-Security Spending to Double to More than $10B by 2016: Analysts

Thanks to the economic recovery, hardware replacement programs, mobile devices, sophisticated cyber-threats and changing technology, such as cloud computing, network security spending will exceed $10 billion in five years, analysts said.

Global network and data-security spending will exceed $10 billion by 2016, according to a market forecast from ABI Research, announced on Jan. 10.

Spending on secure routers, unified threat-management appliances, VPNs, network-access control, firewalls and intrusion detection/prevention systems will rise from $6 billion in 2010 and exceed $10 billion by 2016, ABI Research said.

"In 2009, we saw some dips in security spending across the board," but the market showed "remarkable resilience" in 2010, growing 11 percent, to pass $6 billion, and "we expect steady growth in 2011," Subha Rama, the ABI Research senior analyst who produced the report, told eWEEK.

Health care and financial services firms will increase network-security spending by 10.8 percent and 9.8 percent, respectively, according to the ABI analysis. While health care will see more growth, the surge in spending for financial services was more significant because of its larger installed base and more mature technology, Rama said. Network security spending in health care was still an "emerging market," compared with financial services, she said.

While the growing diversity of security threats will continue to drive security spending, much of the growth in network and data security will be a result of change in the way enterprises use technology, the analysts said. More and more enterprises will adopt cloud services; business users will access consumer cloud services, such as social networking sites, from office equipment. In addition, there will be an explosion in the number of endpoints the IT departments will have to start support as more employees use smartphones and tablets in the office, ABI said. These changes in the enterprise network escalate the risk, according to the analysts.

"Mobility has added a new dimension to enterprise network security," said ABI Research practice director Dan Shey.

Although ABI Research's World Enterprise Network and Data Security Markets report did not include endpoint security in its focus, analysts couldn't ignore the fundamental implications of all the endpoints remotely connecting into the enterprise network-on-network investment, according to Rama. Mobile devices will affect overall network-security spending, and the most significant impact is expected to be on intrusion detection/prevention system and VPNs, Rama said.

With the increasingly complex network, organizations need to develop a multilevel security strategy based on various technologies, ABI said in its forecast. Having obsolete technology or out-of-date security measures will be one of the major threats facing enterprises, ABI said.

There has been a definite shift from point solutions to integrated security and enterprise-wide security policy and implementations, Rama said. Vendors are offering multiple delivery models, such as software blades and cloud-based security devices to bring down deployments costs, she said.

Small and midsized businesses will be most at risk as their resources and budgets are typically limited, but they are subject to the same levels of attack as larger firms, Rama said.

Higher education is still a "big, big" opportunity for network-security spending, especially network-access control products because of the large, transient student population, Rama said.

Increased spending is expected in all regions, with North America in the lead and followed by Western Europe, the Asia-Pacific region, and Central and Latin America, said Rama.

Forrester Research also noted in its 2011 global IT spending forecast that enterprises will be focusing on investing in new technology and services, instead of just refreshing existing equipment. Forrester said companies will be more likely to buy software, IT consulting and system-integration services.