In-Depth

Cloud Security Services Help SMB Buyers Brook Budget Woes

SMB customers have a growing appetite for cloud-based security services. It isn't likely to be sated anytime soon. Thanks to a perfect storm of economic and technology trends, SMB consumption of cloud security services is expected to increase sharply over the next five years.

• By Stephen Swoyer
• 07/23/2012

Small and midsize business (SMB) customers have a growing appetite for cloud-based security services. It isn't likely to be sated anytime soon. Thanks to a perfect storm of economic and technology trends, SMB consumption of cloud security services is expected to increase sharply over the next five years.

So says a new study from Access Markets International (AMI) Partners Inc., which projects that SMB spending on cloud security services will more than double between 2011 and 2016, growing from just over one-sixth (17 percent) to almost one-fourth (24 percent) of overall security spending. To put it in terms of cold hard cash, that's the difference between $3.3 billion in 2011 and a staggering $7.7 billion in 2016.

That translates into a 15.17 percent CAGR, and that's growth you can believe in. AMI forecasts a 10 percent compound annual growth rate (CAGR) for the entire security market.

It cites a mix of factors, starting with what might be called the device-ification of the enterprise.

Not only are companies struggling to address the problems posed by employees who increasingly expect to be able to use their personal devices to access enterprise resources (the so-called bring-your-own-device, or BYOD, phenomenon), they're dealing with a proliferation of legitimate, or of company-sanctioned, mobile devices, too.

On top of this, employees increasingly want to share or disseminate corporate data the same way they share or disseminate personal data: via social media.

What's more, SMBs are facing an IT spending crunch, thanks chiefly to the uncertain economy. In this regard, cloud services offer "a better way of procuring sophisticated [information and communications technologies, or] ICT solutions, and keeping them up to date and 'state of the art'," AMI says. In many (if not most) cases, SMBs lack ICT management teams.

"Security is a complex issue with rapidly changing permutations," said Hugh Gibbs, VP of research for EMEA and report's author, in a statement. "Widespread lack of technical resources and expertise is leading to an increasing desire to outsource the problem amongst small and medium businesses. This is presenting major opportunities for managed service solutions -- particularly for skilled, local channel partners and managed security service providers."