This is a good time to be a managed security services provider—if you believe industry reports about the robust growth of the market. Even if you don’t believe the research, there is plenty of evidence that many organizations are looking for expert help when it comes to strengthening their security posture against a host of potential threats. And service providers can provide that needed assistance.
This is especially true among smaller companies, which in many cases lack the internal resources and skill sets needed to keep up with the latest threats and vulnerabilities. These companies oftentimes do not have a chief security executive or department dedicated to cyber security, and they rely on overworked IT staff to handle the safeguarding of systems and data.
That’s not to say all larger enterprises can handle the growing cyber security needs on their own. They also often require help from outside, and turn to managed service providers for that expertise.
The industry research certainly indicates heavy demand for managed security services. A new report from Technavio predicts that the global managed security services market will grow steadily at a compound annual growth rate (CAGR) of nearly 12% until 2020.
The high adoption of managed services “due to their high convenience and service quality assurance for end users will result in this market’s growth during the forecast period,” the firm says. In addition, benefits such as managed services’ ability to reduce IT budgets and provide high levels of responsiveness—and to ensure quick fault resolution—will augment the adoption of managed security services until the end of 2020, the study notes.
Rising demand from small and mid-sized businesses (SMBs) is the key driver for the growth of the market, Technavio says. The changing aspects of business have prompted organizations worldwide to overhaul their existing models and infrastructure, and security services support growth by optimizing business processes and improving operational efficiency, it says.
Since the managed services provide high-level security for sensitive or confidential information, their demand from SMBs is expected to increase quickly over the next several years.
The growth of the cloud is also playing a key role in the rise of managed services. Cloud-based managed security services will account for more than half (56%) of the total market share by 2020, Technavio says. Because cloud-based managed security services are easy to implement and maintain, their rate of adoption will see a significant increase by 2020.
Another research report, released in 2015 by Allied Market Research, forecasts even more significant growth for the market. The report estimates that the global managed security services market will reach $29.9 billion by 2020, with a CAGR of 15.8% from 2014 to 2020.
The cloud-based managed security services deployment model will grow faster than the market for remotely monitored customer premises equipment by 2020, Allied says. Like Technavio, the firm predicts SMBs will lead the adoption of cloud-based managed security services, due to cost constraints. The North American region will continue to dominate the global market, followed by Europe.
The Allied Market report notes that executives consider incidents of data theft and cyber crime as the greatest threats to their organization's reputation, and a lack of capital and skilled IT resources needed to manage data security are the major hindrances in protecting the information.
“Managed security services have emerged as [a] lucrative option for delivering security asset monitoring and management, threat intelligence research, detection and remediation, and risk and compliance management solutions on shared basis to multiple clients,” the report says. “The cost-effectiveness and effective data security have been gaining traction for the managed security market.”
Among the variety of data security applications, endpoint security will grow at the fastest rate, with increasing adoption of bring-your-own-device (BYOD) policies. This market is forecast to grow at a CAGR of 25% from 2014 to 2020. Secured information and event management (SIEM), an emerging technology for the automatic collection, correlation and analysis of log and alert data, will be the next most popular application for managed services.
Among the key drivers for enhancing security are the growing regulatory compliance requirements for protecting customer information. As a result, the banking and financial services, insurance, telecommunications and IT sectors will be frontrunners in employing managed security services, the Allied Market report says.
Healthcare organizations such as hospitals and medical clinics are also outsourcing security tasks, with the growing trend of electronic health records.
The challanges of maintaining strong defenses against evolving security threats are not likely to go away soon. For many organizations, managed security services providers will be valuable partners in addressing those challenges.