The Asia-Pacific network security market is expected to grow by 6.5 per cent in 2009, dropping nearly two-thirds from the robust growth in 2008. Last year was perhaps too soon for the Asia-Pac region to feel the full brunt of the financial meltdown, the final quarter however – typically the strongest quarter – was a tell-tale of what to expect in 2009, growing a dismal 1.5 per cent over the third quarter of 2008.
According to Frost & Sullivan industry manager Arun Chandrasekaran, however, despite the weak sentiments and businesses exercising caution in spending, the commitment to network security investments remains strong. “Most companies recognise that the risks of not implementing adequate IT security far outweigh the cost of investing in it,” he said.
“Amidst pressure to control CAPEX (capital expenditure) and stretch every dollar, companies are more likely to deploy the more affordable converged security solutions,” Chandrasekaran added. “Adoption of managed security services is also expected to rise as companies try to minimise outright purchases.”
Asia-Pacifi market growing at 17.9%
New analysis from Frost & Sullivan, Asia-Pacific Network Security Market, finds that the market – covering 14 Asia-Pacific countries – was worth an estimated US$1.81 billion in 2008, growing 17.9 per cent from the year before. A modest CAGR (compound annual growth rate) of 7.5 per cent is expected from 2009 to 2015, to gross revenues of just over US$3 billion by end-2015.
The growth in 2008 continued to come from the epicentres of emerging markets like China, India, as well as ASEAN countries like Vietnam and Indonesia, all registering year-on-year growth rates of above 20 per cent.
Firewall and IPSec VPN (Internet protocol security virtual private network) solutions continued to be the dominant choice, accounting for the bulk of revenues last year at 74.6 per cent (US$1.34 billion). This trend is likely to continue through to 2015.
Growing contribution of SMB segment
The SMB (small and medium businesses) segment contributed slightly more than one-third to the total revenues in 2008. Chandrasekaran expects this per centage to rise over the next few years, “More and more SMBs are beginning to install at least first-layer perimeter defence on their corporate networks as converged or integrated security appliances have made network security affordable for smaller businesses.” By 2015, SMBs will account for approximately 45 per cent of the revenues.
Despite being one of the hardest hit, the BFSI (banking, financial services and insurance) sector remains the leading adopter of network security solutions at 20.8 per cent (US$377 million) of revenues in 2008, followed closely by service providers and the government sector at 18.4 per cent (US$333 million) each.
Chandrasekaran believes that the banking sector will continue to be the biggest spender on network security moving forward, mainly due to rising regulatory compliance. Moreover, he says, “Following the loss of public confidence in the banking system after the financial debacle of September 2008, the last thing any CIO would want is a security breach to further dent the confidence of existing and potential customers.”
The Asia-Pacific Network Security Market study is part of the Network Security Growth Partnership Service program, which also includes research in the following markets: network access control, managed security services, data security, application security and content security.
