Korea's Information Security Firms Enjoy Burgeoning Market

[InfoSec News <isn () C4I ORG>]

http://asia.internet.com/2000/12/1207-koreasecurity.html

By Michael Kim
Korea Correspondent, asia.internet.com
December 7, 2000

SEOUL - Amid growing concerns over cyber-terrorism worldwide, Korea's
information security industry is enjoying handsome growth.

The Ministry of Information and Communication (MIC), which has
conducted a survey of 128 member companies of the Korea Information
Security Industry Association, estimated the local market for
information security services at about 355 billion won (US$295
million), more than tripling over last year.

MIC officials said that they anticipate the Korean information
security market will grow by as much as nearly 150 percent next year
to 884 billion won (US$736 million).

The survey, conducted over a four month period from June, also showed
the Korean market moving away from such software products as firewalls
and virus vaccines to various services, including intrusion detection
systems (IDS).

Last year, firewall programs dominated the information security
market, accounting for 22.2 percent of the total, followed by virtual
private networks (VPN) with 16.4 percent, system integrated (SI) with
14 percent, virus vaccines 12 percent, and intrusion detection systems
(IDS) with 6.9 percent.

By next year, however, the ministry forecast the market will be
remapped and be dominated by SI with an estimated 20.4 percent share,
followed by IDS (13.2 percent), firewalls (12.1 percent), VPN (10.7
percent) and virus vaccines (3.8 percent).

Most of the nation's information security houses are newcomers--61.6
percent of them are less than four years old and 74 percent with less
than 3 billion won (US$2.5 million) capitalization.

Despite their relatively small size and newness, 73 percent of the
firms were investing more than 10 percent of their sales into research
and development, above the average of 7.1 percent for venture
companies. Sixty percent of the employees are in research positions.

The volume of exports by information security firms also increased
tenfold from a mere 2 billion won (US$1.6 million) in 1999 to an
estimated 22.9 billion won (US$19 million) this year. The survey
showed Japan was the biggest foreign market, followed by China,
Europe, North America, and Taiwan.

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