As cybercrime continues to grow and become more complex, businesses must race to implement tools, technologies and strategies to protect their organizations.
Frost & Sullivan cites Cybercrime as the primary driving factor in the growth of the North American Managed Security Service Provider (MSSP) Market. The firm estimates that managed security service providers generated revenues of $1.20 billion in 2009 and estimates this to reach $3.90 billion in 2016.
“Although budget cutbacks have resulted from the economic slowdown, companies are continuing to implement measures to upgrade security,” says Frost & Sullivan Research Analyst Martha Vazquez. “Outsourcing security to an MSSP will free up time for organizations to focus on core business processes.”
New legislation is creating an always-changing corporate liability for information security. Verticals such as healthcare, financial services, and government, are required to comply with regulations such as Health Insurance Portability and Accountability Act (HIPAA), Sarbanes Oxley Act (SOX), and those from the Payment Card Industry (PCI).
In a weak economy, it is important for vendors to offer cost-effective solutions. Frost & Sullivan’s research has shown that organizations that have not experienced a serious security breach, are finding it difficult to comprehend the ROI benefits. Economic uncertainty is also making companies hesitant about implementing MSSP services, but organizations are more accepting than in the past. Enterprises also rely on outsourcing to secure infrastructure and lower operational costs.
“There is still a lack of information with regards to the costs entailed by serious data breaches, especially during this slow economy,” cautions Vazquez. “Education must be increased to enable organizations to become more at ease with acknowledging the benefits obtained from outsourcing security to an MSSP.”
MSSPs must focus on diversifying security portfolios in order to remain competitive in the market. MSSPs are leveraging hosted services as a means to offer lower price points; and this has increased the demand for these services in the past year.
Cloud computing services are being increasingly utilized to cut operational and upfront costs. Virtualization is being widely embraced across enterprises to facilitate the use of cloud-based solutions and ratchet down cost. New avenues of opportunity will open up for MSSPs as virtualization and cloud-based solutions gain further traction.
Frost & Sullivan predicted that managed security services in the Asia-Pacific market to grow at rate of 19.7 percent annually for the next five years, exceeding US$4 billion by end-2015. Cathy Huang, industry analyst from Frost & Sullivan, expects growing adoption for Managed Security Services by small and medium businesses (SMBs.)
Related Content: Managed Security Services in Asia-Pacific to Top $4.0 Billion in 2015 with 20% Annual Growth