The security industry is desperately looking for ideas to cope with increasing threats to companies in cyber space, & most ideas are coming from start ups. So how do the leaders cope?
At times, the manner in which we relentlessly surf the web and exchange critical and non-critical information over the web so nonchalantly does cause a lot of surprise. We aren’t really thinking of our vulnerability to cyber attacks in those moments, are we? And that’s after the spate of attacks & breaches on companies like Sony, Bank of America, Wipro, et al & even on national networks that have made headlines. The recent one affected top defence contractors to the Japanese government like Mitsubhishi Heavy Industries and shocked the world. If they are vulnerable, where are smaller companies, or even average consumers headed?
For security companies, of course, this is a sign of business opportunity as well as a challenge to match the dynamically changing security needs of the organisations of today. As per Gartner estimates, the global security software market aggreagated a turnover of $16.5 billion in 2010, a rise by 12% yoy. The market is led by Symantec with a revenue of $3.12 billion in 2010 (market share of 18.9%) followed by McAfee with revenues of $1.71 billion (market share of 10.4%) and TrendMicro with a revenue of $1.04 billion and market share of 6.3%. It’s still a highly fragmented market, considering that the top five vendors account for 44.3% of the global market. The battle for market share between these top five in particular is only going to intensify in the coming months, and there is a lot of inorganic activity expected, since a number of the new innovations in this increasingly complex arena lie to a large extent with smaller companies and start ups. “Products within the security market are undergoing rapid evolution, in terms of both new delivery models – with security as a service showing increasing popularity – and new technologies being introduced, often by startup companies,” asserts Ruggero Contu, principal research analyst at Gartner.
At the top is the bitter rivalry between Symantec, McAfee & TrendMicro. Symantec continues to be especially aggressive on acquisitions and has acquired 25 companies since 2005. Its recent deals include Clearwell Systems for their eDiscovery Solution this year, and acquired Verisign’s Security Services (for their online identity protection portfolio), RuleSpace (URL filtering functionality), PGP Corporation & GuardianEdge (e-mail & data encryption) and Gideon Technologies (standards-based information security solutions) in 2010. McAfee has become a unique case. Its CEO had promised at least 3-4 acquisitions every year in early 2010, but the company was itself acquired by microprocessor giant Intel for a whopping $7.7 billion last year. Intel’s sudden diversification to this space has surprised many. The company hopes to bundle hardware security capability with McAfee’s software credentials to be able to undo some of the disadvantages it has of not being there in the mobile space and facing increasing competition from rivals. The number 3 player TrendMicro acquired mobile encryption player Mobile Armor last year to boost its capabilities in the mobile space. The acquisition of TrendMicro expands its portfolio to serve the growing cloud space. As remote management of infrastructure becomes a reality with increasing cloud adoption (globally a $1.6 billion market as per IDC), it is becoming a huge opportunity for security firms.
At times, the manner in which we relentlessly surf the web and exchange critical and non-critical information over the web so nonchalantly does cause a lot of surprise. We aren’t really thinking of our vulnerability to cyber attacks in those moments, are we? And that’s after the spate of attacks & breaches on companies like Sony, Bank of America, Wipro, et al & even on national networks that have made headlines. The recent one affected top defence contractors to the Japanese government like Mitsubhishi Heavy Industries and shocked the world. If they are vulnerable, where are smaller companies, or even average consumers headed?
For security companies, of course, this is a sign of business opportunity as well as a challenge to match the dynamically changing security needs of the organisations of today. As per Gartner estimates, the global security software market aggreagated a turnover of $16.5 billion in 2010, a rise by 12% yoy. The market is led by Symantec with a revenue of $3.12 billion in 2010 (market share of 18.9%) followed by McAfee with revenues of $1.71 billion (market share of 10.4%) and TrendMicro with a revenue of $1.04 billion and market share of 6.3%. It’s still a highly fragmented market, considering that the top five vendors account for 44.3% of the global market. The battle for market share between these top five in particular is only going to intensify in the coming months, and there is a lot of inorganic activity expected, since a number of the new innovations in this increasingly complex arena lie to a large extent with smaller companies and start ups. “Products within the security market are undergoing rapid evolution, in terms of both new delivery models – with security as a service showing increasing popularity – and new technologies being introduced, often by startup companies,” asserts Ruggero Contu, principal research analyst at Gartner.
At the top is the bitter rivalry between Symantec, McAfee & TrendMicro. Symantec continues to be especially aggressive on acquisitions and has acquired 25 companies since 2005. Its recent deals include Clearwell Systems for their eDiscovery Solution this year, and acquired Verisign’s Security Services (for their online identity protection portfolio), RuleSpace (URL filtering functionality), PGP Corporation & GuardianEdge (e-mail & data encryption) and Gideon Technologies (standards-based information security solutions) in 2010. McAfee has become a unique case. Its CEO had promised at least 3-4 acquisitions every year in early 2010, but the company was itself acquired by microprocessor giant Intel for a whopping $7.7 billion last year. Intel’s sudden diversification to this space has surprised many. The company hopes to bundle hardware security capability with McAfee’s software credentials to be able to undo some of the disadvantages it has of not being there in the mobile space and facing increasing competition from rivals. The number 3 player TrendMicro acquired mobile encryption player Mobile Armor last year to boost its capabilities in the mobile space. The acquisition of TrendMicro expands its portfolio to serve the growing cloud space. As remote management of infrastructure becomes a reality with increasing cloud adoption (globally a $1.6 billion market as per IDC), it is becoming a huge opportunity for security firms.
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Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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