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APAC firms look to 'affordable' security

By Vivian Yeo, ZDNet Asia on June 12th, 2009

Summary

Businesses continue to commit to security spend but will go for more affordable integrated and managed security options in 2009, says Frost & Sullivan.

Topics

analyst, asia-pacific, financial, frost & sullivan, industry, managed security, network security, security, small and medium business

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Companies in the Asia-Pacific region will not shy away from spending on security in 2009 but are likely to deploy "more affordable" converged or managed security options, according to a new report.

In line with this, the region's network security market will grow 6.5 percent this year, Frost & Sullivan said in a statement on Friday.

Growth in 2009, however, pales in comparison with that in 2008, when the region achieved a 17.9 percent year-on-year jump to reach US$1.8 billion. Emerging markets such as China and India, as well as Southeast Asian countries including Indonesia and Vietnam, registered growth rates of over 20 percent in 2008, said the market analyst.

Arun Chandrasekaran, industry manager at Frost & Sullivan, said in the statement most companies in the region recognize the risks of not implementing adequate IT security "far outweigh" the investment costs. In spite of weak business sentiments and exercised caution in spending, commitment to network security investments remains strong, he reported.

"Amidst pressure to control Capex (capital expenditure) and stretch every dollar, companies are more likely to deploy the more affordable converged security solutions," he noted. "Adoption of managed security services is also expected to rise as companies try to minimize outright purchases."

According to Frost & Sullivan, small and midsize businesses (SMBs), which accounted for just over a third of network security spending in the region last year, will increasingly contribute a greater share to overall revenues across the 14 markets covered--making up about 45 percent by 2015.

"More and more SMBs are beginning to install at least first-layer perimeter defense on their corporate networks as converged or integrated security appliances have made network security affordable for smaller businesses," explained Chandrasekaran.

The Asia-Pacific network security market, predicted the market analyst, will grow at a six-year compound annual growth rate of 7.5 percent to reach over US$3 billion by end 2015.

In addition, the bulk of spending going forward will continue to be on firewalls and Internet Protocol security VPN (virtual private network) tools. The two segments accounted for 74.6 percent, or US$1.34 billion, of the total network security spend in 2008.

In terms of industries, the analyst pointed out that the banking, financial services and insurance (BFSI) sector will be the dominant buyer of network security in the region, driven by rising regulatory compliance.

"Following the loss of public confidence in the banking system after the financial debacle of September 2008, the last thing any CIO would want is a security breach to further dent the confidence of existing and potential customers," he said.

Last year, the BFSI industry contributed 20.8 percent (US$377 million) of overall revenues; service providers and the government sector were the next biggest spenders at 18.4 percent (US$333 million) each.

Related stories

Asian telcos less stringent on security

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