Analysts: Security's where the money is

[InfoSec News <isn () c4i org>]

http://news.com.com/2100-1001-829273.html?tag=cd_mh

By Robert Lemos 
Staff Writer, CNET News.com
February 4, 2002, 5:30 PM PT

Two segments of the computer-security industry should shake off the
general tech-market malaise and score double-digit growth this year, a
pair of market researchers said Monday.

Gartner analyst firm Dataquest forecast that the worldwide
security-software market will grow to $4.3 billion this year, up 18
percent from $3.6 billion in 2001. Meanwhile, managed security
services should grow even faster, according to market researcher IDC,
which estimates that such network-protection providers will take in
$2.2 billion in 2005, up from $720 million in 2000.

The optimistic outlook reflects the realities of a post-Sept. 11
world, as companies and governments are turning to the
computer-security industry to help them secure their most critical
information-technology systems.

"Enterprises are looking particularly at defensive security
technologies such as antivirus software, intrusion detection systems
and firewalls," Colleen Graham, industry analyst for Gartner
Dataquest, said in a statement. "Government and defense will increase
spending in reaction to public concern about the shamefully low scores
received in security audits performed in reaction to increased
concerns about the security of the government IT infrastructure."

Ways of identifying people, such as face-recognition technologies and
smart cards, will also get a boost from the focus on security, Graham
said.

More telling than the reports, however, may be a pledge made by the
world's largest independent software company. In mid-January,
Microsoft Chairman Bill Gates stated in a company-wide e-mail that
security had become priority No. 1.

The necessity of computer security in the new age has boosted many
companies' stock prices. Security-software maker Symantec saw the
price of its shares nearly double from early September to Monday's
close of $36.48, while rival Network Associates' stock price almost
tripled, and firewall maker Check Point Software Technologies has seen
its stock jump by half.

But while these companies' products are now seen as necessary, for
many of their customers, installing and maintaining such security
software will be an unwanted difficulty. That's the main reason behind
what market researcher IDC predicts will be a 25 percent annual growth
rate for companies that manage their clients' security systems.

"The managed security services market is being driven primarily by
resource constraints to capital and security expertise," Allan Carey,
senior analyst for IDC, said in a statement.

While large companies will be able to handle their own security needs,
small and medium-sized businesses, which need to be secure despite
limited resources, will be the main market for such managed services,
Carey added.

Last week, Check Point announced new products specifically aimed at
small businesses.



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