IDC: Internet Security Software Market is Booming

Fueled by a surge in threats to the security and integrity of e-commerce and other Web sites, the Worldwide market for Internet security software will reach $4.4 billion (US$) by the end of 1999, according to an International Data Corp. (IDC) report released this week.

The report — “Internet Security Software: 1999 Worldwide Markets and Trends” — indicates that the projected 199 totals represent a 39% increase over 1998’s $3.2 billion mark. The market isn’t slowing down either. IDC says that the escalating number of netizens will push the market for security software up an average of 21% per year, hitting $8.3 billion.

Threats To E-Commerce

A recent study indicated that e-commerce operations are 57 percent more likely to experience a security breach than other online sites, and 24 percent more likely to be the target of a hacker/cracker attack. With this in mind, companies enlisting the services of online security solution providers are more wise than paranoid, according to experts.

“The 1999 Information Security Industry Survey” — published by ICSA, Inc., through its Information Security Magazine — collected data from a survey that took place between April and May of this year, polling 745 administrators, managers and executives working in the data management, IT, networking and security fields.

Security By The Numbers

“The increasing popularity of e-commerce” is a significantly contributing factor to the growth of the market, commented Chris Christiansen, program director for IDC’s Internet security research, particularly the widespread utilization of firewalls.

Firewalls were identified as one of the fastest growing sectors, increasing 80% in value between 1997 and 1998 alone, reaching $442 million. Additionally, IDC sees firewalls accounting for a $1,6 billion market share come 2003.

The report splits the Internet security software market into 4 segments, the other 3 being encryption, antivirus and authentication, authorization, and administration packages.

“Authentication, authorization, and administration products represented the largest segment in the 1998 market with $1.6 billion,” said IDC. “This segment will maintain its top spot through 2003, when its worth will exceed $3.7 billion.”

Network Associates on Top

The IDC report singled out Network Associates, Inc. (Nasdaq: NETA) ranking several of its products — who produce such products as McAfee’s Total Virus Defense, PGP encryption, Gauntlet firewall and Cybercop — as market leaders. “Network Associates built its Internet security business by being number one or number two in each of the most critical product categories, then integrating those products into broader e-business security offerings to provide increased value,” said Christiansen.

“Network Associates’ products are clearly gaining momentum in the marketplace as customers look for the best solutions to meet the demands of the emerging new e-business economy,” commented Wes Wasson, director of product marketing for Network Associates. “With each of our best of breed products in the lead in their individual security markets, Network Associates is in a great position to meet customer needs across the enterprise, and continue its strong trend of innovation and growth.”

IDC is a division of International Data Group, specializing in IT media research.