Global spending on security-related hardware, software and services will grow at a compound annual growth rate (CAGR) of 9.2% between 2018 and 2022, to a total of $133.8 billion in 2022. The figures come from the latest Worldwide Semiannual Security Spending Guide compiled by IDC.
The forecasts are more conservative than Gartner’s August 2018 predictions (for 2018 and 2019). While Gartner forecasts that 2019 global spending will be $124 billion, IDC’s forecast for 2019 is just $103.1 billion. Both companies do agree on one thing — growth in spending on managed security services will continue.
IDC says it will be the largest technology category in 2019, with firms spending more than $21 billion. “The security landscape is changing rapidly,” comments Martha Vazquez, senior IDC research analyst, Infrastructure Services, “and organizations continue to struggle to maintain their own in-house security solutions and staff. As a result, organizations are turning to managed security service providers (MSSPs).”
Last August, Gartner reported that managed services represented roughly 24% of deployments, and added, “Services (subscription and managed) will represent at least 50 percent of security software delivery by 2020.”
Outside of managed services, the second largest technology category in 2019 will be network security hardware, including unified threat management, firewalls, and intrusion detection and prevention technologies. Next will be integration services and endpoint security software. The fastest growing categories will be managed security services (14.2% CAGR), security analytics, intelligence, response and orchestration software (10.6% CAGR), and network security software (9.3% CAGR).
IDC believes that the three industries that will spend the most on security in 2019 –banking, discrete manufacturing, and federal/central government — will together spend more than $30 billion. Three other industries — process manufacturing, professional services, and telecommunications — will together spend almost $20 billion.
The three industries that will experience the fastest spending growth between 2018 and 2020 are state/local government (11.9% CAGR), telecommunications (11.8% CAGR), and the resource industries (11.3% CAGR).
Geographically, the U.S is the largest market, expected to spend $44.7 billion in 2019. Within this, discrete manufacturing and the federal government will account for nearly 20% of the total.
Outside of the U.S., China will be the second largest market, with state/local government, telecommunications, and central government accounting for 45% of the national spend. Japan and the UK are the next largest markets, led by the consumer sector and banking respectively.
Forecasting is a tricky business since it is based on the known (recent and present), and known unknowns (things we can see coming); but it cannot take account of the unknown unknowns (things of which we have no current knowledge). For example, if Brexit proceeds to a ‘hard’ Brexit, there could conceivably be a flight of banking from London to, say, Frankfurt in Germany. While this migration might increase global banking spend, it would certainly decrease UK banking spend.
Two things are clear, however: security spending will continue to rise; and history suggests that forecasts tend to be conservative. In 2017, Gartner forecast that spending would increase to $93 billion in 2018. In mid-2018, Gartner predicted that the 2018 spend would reach $114 billion.