News Archive

Info-security Growth

by msecadm4921

Growth in the information security industry set to continuem, says Diane Seddon, industry analyst at Corsaire.

The fears surrounding Y2K compliance and, to a lesser extent, the boom in dotcom industries saw companies pouring investment into IT around the turn of the new millennium. With a spending slow-down and lower than expected growth rates, the IT industry has since endured falling share prices, poor financial results and well-publicised redundancies. For one sub-sector though, growth has increased. The Computer Weekly/Kew Associates UK IT Expenditure Survey 2002 found spending on IT security had shown a significant advance, growing by 36pc between 2000 and 2001 and, that as a sub-sector, it was experiencing growth at over four times that of overall IT expenditure.
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Growth driver
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The main driver behind the growth appears to be the shift from the view of IT security as a solely technical issue to a more widespread understanding of its role in business as a whole. Information security, as it is now more commonly termed, has never been a higher priority at board level than it is now, according to the DTI Information Security Breaches Survey 2002. Although there are still companies who view security spending as an overhead rather than an investment, the general shift in business thinking has ensured that information security is being pushed increasingly higher on the business agenda. With security incidents hitting the headlines, companies are becoming more and more concerned about protecting both reputation and brand, and over the disruption to business and financial cost incurred as a result of a security breach. Legal obligations, such as those under the Data Protection Act (1998), have also played a role in pushing companies into action to protect their systems and the information held upon them. Although documented adherence to the Data Protection Act has remained low amongst businesses (the DTI report found that only 48pc of UK companies had procedures to ensure compliance), awareness of its contents is on the increase – a recent CCSA seminar on the Data Protection Act was repeated a total of six times due to demand. Criteria set by insurance companies requiring proof of compliance with best practice in security have also driven companies to increase security expenditure.
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Research by the IDC last year showed an expected compound growth of 25pc in the information security industry, predicting a global value of $21 billion by 2005. The financial services sector was the largest source of spending with an expected value alone of $2.2 billion by 2005. According to the IDC, the Western European internet security software market grew 27pc between 2000 and 2001, topping $1.6 billion in revenue. With the UK having the largest market share, closely followed by Germany, it is expected to reach $4.3 billion by 2006, representing a compound growth rate of 17pc. On the service side, penetration testing continues to be the single biggest use of external consultants and it is still rapidly growing. The Ernst and Young Global Information Security Survey 2002 stated that 27pc of respondents planned to outsource their security activities by next year. With its increasing profitability, many large traditionally non-security corporations are now moving into the service arena, alongside the more established specialised consultancies.
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In conclusion
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This increasing revenue growth across the board from service providers to product manufacturers could be the long awaited signal that businesses have finally turned the corner in their attitude to information security and are ready to invest. With PKI now beginning to take off and emerging technologies such as Biometrics authentication and Wireless LAN, the demand for information security, and more particularly security specialists, looks set to continue.

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