It can be difficult to find relevant estimates for niche market segments, such as managed security services, in such a volatile context. The volatility is mainly generated by the amount of consolidation and business model transformation processes that are currently taking place among managed service providers (MSPs).
In this July, 2014 article from MSPmentor, the author cites forecasts the market values of managed security services, while Research and Markets makes claims for the overall MSP market. If we compare the share of managed security services within overall MSP market, in the two scenarios below, we can easily conclude that the revenue contribution of security services for MSP will grow.
2012/2013: Managed Security ($9bn) is over 6% from the overall MSP market ($143bn)
2018/2019: Managed Security ($24bn) will be over 9% from the overall MSP market ($256bn)
But what will be the differences between the security services delivered in present times and the ones that will be delivered in 5 years from now?
What type of security services will generate $24 billion?
To set the context of the future, Forrester’s James Staten says in this recent 2014 report that “when you look at the vast majority of companies calling themselves cloud service providers, they consist mostly of companies that in 2006 called themselves managed service providers (MSPs), meaning a bulk of their revenues came from hosting and/or managing applications for their customers.”
This statement illustrates the transformation of business models that MSPs still have to go through, in their journey to incorporate of cloud based services to customers. “Most providers are taking a hybrid approach with on-premises, traditional hosting, and outsourcing, as well as cloud solutions.”
In present, most of managed security services come down offering on-premise protection for physical devices (laptops, workstations and servers).
Going forward, CSPs have to guarantee security of the hybrid models they promote. Ensuring the highest security for such model is becoming a strong differentiator between service providers. On top of that, they have to ensure highest security for hybrid models with no impact on the performance and the profitability. It is well known that for service providers profitability increases as the level of automation of services management increases.
As a conclusion, service providers will strongly prefer security solutions that are built to offer maximum protection, minimum impact and high automated service management in the hybrid approach.