Big five infosec software vendors lose ground

The top five information security vendors have lost almost 20 percent of global software security market, and now fight for control of less than half of the industry.

Gartner said Symantec, McAfee, Trend Micro, IBM and CA held about 44 percent of last year's market, down from 60 percent in the four years prior.

Analyst Ruggero Contu said the infosec software industry remained fragmented, and small innovative players continued to make wins.

Source: Gartner (July 2011)

“The information security market is in a continuous state of consolidation, but even fairly intense merger and acquisition activity has not stopped the market from being very fragmented,” Contu said.

“Market expansion and innovation are driven partly as a result of new start-up players entering the market. New players bring innovative technology solutions to cater for end-user requirements that in turn are created as a result of the new threats, often introduced by cybercriminals taking advantage of new vulnerabilities created by changes to IT ecosystems.”

The infosec market was “far from reaching a consolidated status”, in which 60 to 70 percent of the market is owned by the top five vendors.

"Currently, any consolidation at the top is contrasted by an expansion of the market at the bottom,” Gartner said. 

Contu said the infosec market provided good growth opportunities for established players and start-ups.

“While end-user organisations have shown an increasing preference to use a suite of products from fewer suppliers, the complexity of end users' product portfolios will not be solved in the short term because new, stand-alone niche tools will continue to be purchased to solve new rising threats and vulnerabilities that incumbent players haven't been able to address."

The analyst firm said growth in the Australian information security software industry is cooling and forecast a rise of only half a percent this year compared to 12.6 percent across the Asia Pacific.

It said revenue in the local infosec software market will reach $310.4 million by year’s end. Revenue was predicted to reach $1.5 billion across the Asia Pacific and $17 billion globally.

According to IBRS security analyst James Turner, IT security shops will likely feel a budget freeze over the next 12 to 24 months.

“With uncertainty in the economy over next 12 months, we won’t get an increase in security budgets,” Turner said.

“We’ve so far weathered the storm. Projects went ahead, and we’ve been pretty casual over the last two years.”

Turner said talented and “trusted” staff would help security shops survive budget cuts and said organisations should not delay seeking out talented employees while cash flow remains stable.