IT Receptive to Security Outsourcing

Market for managed security services could reach $4.9 billion by 2006

According to research firm In-Stat/MDR, IT organizations are warming up to the idea of outsourcing their enterprise security requirements.

In-Stat/MDR says that the market for security consulting currently accounts for the lion’s share of managed security revenues, but speculates that the market for outsourced security monitoring could come to dominate the market by 2006.

In addition, says in-Stat/MDR analyst Jaclynn Bumback, the worldwide market for managed security services could reach $4.9 billion by 2006 – up from just over $1 billion last year.

“A high degree of security expertise is needed to protect companies from the many risks in the wild, and security services companies are capable of providing a high degree of security at a cost that companies can afford,” Bumback writes.

Bumback identifies a number of key growth drivers in the managed security services space, including word-of-mouth marketing on the part of a growing list of customers; added and expanded services to existing customers; and willingness on the part of some vendors to make their services available to customers on a trial basis. In addition, she notes, purveyors of managed security services are increasingly partnering with service providers.

Managed security services are succeeding despite the reluctance on the part of network administrators to outsource them. A February, 2002 survey of a panel of network administrators revealed that firewall and virus-protection needs were the most likely services to be outsourced.

According to In-Stat/MDR, small enterprise environments of between 1,000 and 4,999 employees are currently more likely to outsource their security needs than any other market segment. In 2006, this will still be true, the research company finds, but by then the market for managed security services among SOHO, small office, and midrange customers – who today collectively account for less than three percent of all revenue – will have expanded dramatically as well.

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.