Cybersecurity businessGartner: 11 percent software security revenue jump in 2010

Thanks to compliance requirements and a threat environment marked by growing sophistication, sellers of software security products are expected to earn more than $16.5 billion in revenue this year, an 11.3 percent jump from 2009 revenue of $14.8 billion, according to a Gartner forecast released this week.

The sector is thriving, despite the ongoing economic downturn because products have matured and successfully penetrated the marketplace, according to Gartner, which released its predictions on Tuesday. In addition, organizations have more confidence in IT offerings, and the need for such products exists across many verticals and geographies.

Compliance mandates and the elaborate threat landscape are the primary motivators for consumers and organizations to purchase security products, according to Gartner.

“The growing sophistication of the threat landscape — with malware composed of multiple components that can be installed after the initial infection and the exploits of socially engineered trojans, which trick end users into downloading and executing malicious files — will push organizations and consumers to invest in endpoint security products in coming years,” said Matthew Cheung, senior research analyst at Gartner.

The most popular products to help organizations meet compliance are user provisioning, security information and event management and mobile data protection, according to Gartner.

SC Magazine’s Dan Kaplan writes that meanwhile, software-as-a-service will continue to push past on-premise software as the preferred delivery model, the analyst firm found. SaaS solutions most commonly deployed are related to Web security and identity and access management (IAM).

The IAM product category continues to be a hot spot, with organizations dedicating eight percent of their security budgets to the technology. Gartner estimates that the IAM market will exceed $12 billion in value by 2014.

“Most segments of the security software market will continue to grow over the next few years, although a significant degree of variation is expected between the more-established and less-mature technologies,” said Ruggero Contu, principal research analyst at Gartner. “Overall, security will remain one of the fastest-growing areas within the enterprise software market.”

Gartner analysts said security software markets will weather the current economic downturn better than in 2001 and 2002, because the market conditions are dramatically different in terms of maturity, penetration, confidence in IT, and geographic and vertical mix.

“Security software vendors that have a balanced mix of channel, new license and maintenance revenue streams and flexibility in contractual terms, such as software as a service (SaaS), open source and outsourcing, have the strongest options for continued growth and to even out the risk,” Contu said. “Shrinking discretionary spending budgets have heightened competition for new maintenance and license revenue streams and placed a renewed emphasis on vendor performance and viability.”

The consumer security software market remains the largest security software segment, with 2010 revenue projected to reach $4.2 billion in 2010, up from $3.9 billion in 2009. The endpoint protection platform (enterprise) market is the No. 2 security software segment, with revenue on pace to reach $3 billion in 2010, up from $2.9 billion in 2009.

More details are available in the Gartner report “Forecast Analysis: Security Software Markets, Worldwide, 2009-2014, 2Q10 Update.”