This year looks to be a good one for partners in the information security game, with spending on security hardware, services and software in the Asia Pacific region expected to reach US$23.1 billion in 2021.
According to the latest figures by industry analyst firm IDC, the anticipated security investment in the region this year represents an increase of 12.6 per cent over the previous year.
Moreover, IDC said it expects investment on security related products and services to grow at a five-year compound annual growth rate (CAGR) of 13.3 per cent over the forecast period, from 2019 to 2024, and reach US$35 billion by 2024.
A combination of factors is driving the growth, including increased cloud adoption, unprecedented work from home migration and transformation projects by enterprises to overcome operational challenges.
“2020 defined the importance of digital for everyone globally, but it also highlighted shortcomings in security strategies,” said IDC Asia Pacific trust, security and blockchain research vice president Simon Piff. “While leading organisations are starting to adopt a more platform-based approach, the majority are still buying point-solutions to address specific concerns.
“This majority needs to change their mindset and invest more strategically into their security architectures,” he added.
Perhaps of most interest to partners, services will be both the largest and the fastest growing category among security markets, accounting for almost half of security spending throughout the forecast period, with an expected 13.4 per cent five-year CAGR.
Among services, the most significant will be managed security services, set to deliver around 40 per cent of the security services spending throughout the forecast, followed by consulting services and integration services.
According to IDC, enterprises will continue to become more dependent on managed service providers (MSPs) for security as the IT environment becomes more diverse and complex.
Part of this is the realisation among many enterprises following fresh investment in security last year in the wake of COVID-19 that they have limited expertise in the field and need to rely on trusted security partner to fulfil their security needs.
Security hardware will be the second largest of the security market after services, according to IDC, with the segment dominated by network security needs, including firewalls, intrusion detection and prevention, unified threat management and virtual private networks.
Security software spending, meanwhile, is being led by endpoint security, and identity and digital trust software, delivering more than half of the overall security software spend in 2021.
Driving the growth in the security software category is the concern of enterprises to protect devices and networks used by remote work force from cyber attacks, IDC said.
The firm's research suggests that the industries that will drive security spending this year are banking, telecommunications and federal and state government. These verticals are typically targeted more than other market segments by threat actors for fraud, cyber crime and breaches, IDC said. It is anticipated that these industries will collectively constitute half of the total security spend in 2021.
At the same time, the industries seeing the greatest increase in security spending this year are state and local government, with 18.5 per cent growth; transportation, claiming 13.9 per cent; and retail, which is set to enjoy 13.7 per cent growth.
This growth is broadly driven by an increased focus on data security, e-commerce, work from home, digitalisation of logistic monitoring, payments and contracts, and in playing “catch-up” due to underspending in the area in previous years.
“In Asia Pacific, investments on security-related products and solutions (i.e. endpoint security, VPN, and firewalls) will experience double-digit growth in 2021 due to the increased spending by both governments and enterprises (particularly in the banking, telecom, and professional services industry) to enable a safe, efficient, and trustworthy digital environment for the expanded remote workforce,” said Sharad Kotagi, associate market analyst at IDC IT spending guides, customer insights and analysis.
Moreover, large businesses with 500-1,000 employees and very large businesses, with more than 1,000 employees, will be responsible for two thirds of all security-related spending in 2021, according to the analyst firm. These two segments are also expected to see the strongest spending growth over the forecast period with CAGRs of 12.7 per cent and 13.7 per cent, respectively.
Such growth among larger organisations is driven by a large work force and the adoption of emerging technologies by the organisations.
But that doesn’t mean partners that work with smaller customers will miss out. Medium-sized businesses with 100-499 employees, and small businesses with between 10 and 99 employees, are expected to spend more than US$5 billion collectively on security solutions in 2021.