KN72074

KEY NOTE IT Security: March 2004

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This report covers: IT security products, IT security services, new ways of operating, political influence, modern software is easier to attack, rise in cost of security breaches,estimated direct costs of security breaches,

Companies covered include:Accenture, Bull Information Systems, Cisco Systems, Computer Associates, Computer Sciences UK, IBM UK,Intergralis, Nokia UK, RSA Security, Sophos, SunGard Data Systems, Symantec (UK), Trend Micro (UK),

EXECUTIVE SUMMARY

Executive Summary Key Note estimates that, in 2003, expenditure on information technology (IT) security products and services reached £1.25bn at final selling prices, a rise of 25% on 2002. In contrast with the majority of sectors in the computer industry, the market for IT security products and services is still registering strong annual growth — between 2000 and 2003, the market increased by 92.3%. This Key Note Market Report focuses on two aspects of IT security: expenditure on products, which includes spending on hardware, software and appliances; and expenditure on services, which covers consultancy, systems integration, training and outsourcing.

Between 2000 and 2003, expenditure on security products and services was driven by a number of forces, including: the rise in the number of security breaches suffered by organisations and the growing costs associated with them; the increasing value of data held in corporate IT systems; the growing sophistication of new security threats — such as intelligent malware — which require new protection products; changing business practice, such as outsourcing, globalisation, teleworking and e-business, which have led to the development of distributed corporate structures and greater networking of computers within and between organisations; and the rise in politically inspired attacks.

However, despite these drivers for IT security, a large proportion of UK businesses regard spending on security as an overhead rather than an investment. Between 2000 and 2003, the buying behaviour of organisations changed in important ways, which, in turn, has changed the nature of the IT security market. Many organisations are adopting a 'layered security' approach, which combines solutions — such as desktop anti-virus, server and gateway anti-virus, and content filtering — with proactive techniques, such as behaviour analysis and heuristics.

In addition, clients are seeking to buy integrated platforms/appliances rather than individual `best-of-breed' products. Security appliances are taking an increasing share of the market, meaning that hardware-based products are growing at the expense of software-based products. The focus of IT security is moving from preventing access to systems to allowing access in a controlled manner. In this way, there is a greater emphasis on identity and access management solutions. In addition, security of mobile devices and systems is of growing importance.

In the next 5 years (2004 to 2008), expenditure on IT security products and services will grow strongly. In particular, products and services that offer: a strong return on investment and make security more manageable; wireless and application security solutions; security audits and penetration testing; role-based access control solutions; biometric technology; products and services that enforce corporate policy, comply with privacy regulations and limit legal liability; content management software; outsourcing; and security appliances, will be increasingly popular.

TABLE OF CONTENTS

Text © 2004 Key Note

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Last updated by Amanda Porteous June 2004