What’s behind the continued growth of security spend?

Cyber security has been a hot button topic for the past several months, and that is set to continue with security spend growing exponentially over the next couple of years.

According to Gartner, worldwide spending on information security products and services will reach $86.4 billion in 2017, an increase of 7 per cent over 2016, with spending expected to grow to $93 billion in 2018. 

The infrastructure protection segment will see fast growth, particularly in the security testing market which, despite only having a small base, will see increased demand due to continued data breaches. Emerging application security testing cools will also contribute to the segment’s growth.

However, it is the security services segment that will continue to be the fastest growing. Gartner highlights IT outsourcing, consulting and implementation services as being key contributors. Hardware support services will however see growth slowing, as we see increased adoption of virtual appliances, public cloud and software as a service (SaaS) solutions, which reduces the need for attached hardware support overall.

While these are the segments that are set to contribute to the overall market growth, increased spend is largely down to one key factor: awareness. 

"Rising awareness among CEOs and boards of directors about the business impact of security incidents and an evolving regulatory landscape have led to continued spending on security products and services," said Sid Deshpande, principal research analyst at Gartner.

"However, improving security is not just about spending on new technologies. As seen in the recent spate of global security incidents, doing the basics right has never been more important. Organisations can improve their security posture significantly just by addressing basic security and risk related hygiene elements like threat centric vulnerability management, centralised log management, internal network segmentation, backups and system hardening."

The forecast goes on to highlight other contributing factors to the growth in security spend including the EU General Data Protection Regulation (GDPR), managed security service (MSS) contract bundling, and the increased reliance on local vendors in China.

The GDPR, Gartner says, has caused an "overall panic and unease among organisations in Europe", which will drive 65 per cent of data loss prevention (DLP) buying decisions through to 2018. Many businesses are now needing to strengthen their knowledge of the new regulation, and those who already have some form of DLP inplemented are determining what additional capabilities they need to invest in. 

It’s also predicted that by 2020, 40 per cent of all MSS contracts will be bundled with other security services and broader IT outsourcing (ITO) projects – up from 20 per cent today. More organisations are looking to ITO providers who can offer customisable delivery components sold within MSS contracts. Improved maturity of those MSS contracts will give customers a broader range of bundling and service packaging options. As a result of large contract sizes associated with ITO and security outsourcing deals, the MSS market will see significant growth through to 2020.

Lastly, China’s recently approved cybersecurity law will further displace US-manufactured network security products. Gartner expects that, despite an increase of 24 per cent in 2016, end-user spending growth in Asia will return to single-digit yearly growth fron 2018 onwards. This is as a result of a decline in average selling prices, due to the more competitive pricing of Chinese solutions.

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