Security spending booms in N.A.

Small, medium, and large organizations in North America are increasing their spending on security products and services over the next few years to the extent that end-user expenditures will grow 78 per cent between 2003 and 2007, from US$4.5 billion to $8 billion, according to a study released last fall by San Jose-based Infonetics Research, Inc. Titled User Plans for Security Products and Services, North America 2003, the study covers security products, security services and PKI.

“No one knows for sure what will come out of this intense period of security technology development, but most new products will integrate application intelligence and intrusion detection and prevention,” noted Jeff Wilson, principal analyst at Infonetics Research and lead analyst of the study. “Demand for these new security solutions is coming from businesses of all sizes and types.”

Infonetics reports the following trends in the North American security market:

– Over a third of the 240 respondents will purchase or are considering purchasing wireless LAN security products;

– The fear of being hacked by outsiders is the leading factor that pushes them to buy security products and services;

– The ability for IDS products to operate in-line is important to 69 per cent (up from 57 per cent last year);

– By 2005, two-thirds of respondents will have purchased integrated security appliances;

– 33 per cent of respondents use managed security services or plan to by July 2005.

In December, the research firm announced that worldwide intrusion detection/prevention product revenue rose 11 per cent to US$116M in 3Q03. According to the firm’s market share and forecast report Intrusion Detection and Prevention Products, these products will generate a 25 per cent growth to US$145 million by 3Q04.

The company forecasts “astronomical growth” in the network-based in-line intrusion prevention hardware market over the next three years (140 per cent CAGR through 2006) that will dramatically reshape the revenue breakdown of the overall IDS/IPS market, which is currently 59 per cent traditional network-based IDS products, 31 per cent host IDS/IPS, and 10 per cent in-line network-based IDS/IPS.

Prevention products come mostly in the form of appliances that proactively block attacks and generally require less expertise and ongoing monitoring.

North America accounts for 62 per cent of IDS product revenue.

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