Managed security service global revenue totaled $17.4 million in 2015, up 9% from the previous year, and it is forecast to grow by one-third over the next five years, according to a new report from research firm IHS Technology.
More than half (54%) of security service revenue in 2015 came from customer premises equipment (CPE) based services, with cloud-based offerings contributing 46%, the study says. But this ratio is expected to reverse by 2020.
Managed security providers are now beginning to leverage software-defined networking (SDN) and network functions virtualization (NFV) rollouts, the firm says, in order to scale delivery of managed security services.
“SDN deployments in cloud and hosting environments will help providers build more scalable, flexible and profitable hosted and cloud security services,” said Jeff Wilson, cybersecurity research director for IHS. “While common wisdom says the transition to the cloud and cloud services for security will overwhelm CPE, there’s still a play for on-premises services, even in a virtualized world.”
Sales of cloud-based security services grew 12% in 2015 from the prior year, and the segment is expected to grow at a compound annual growth rate (CAGR) of 9% over the five years from 2015 to 2020.
The largest contributor to cloud-based security service revenue is content security, followed by managed firewall services, other security services, distributed denial of service (DDoS) mitigation and intrusion detection and prevention systems.
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