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 Channel Futures

Business Models


US Managed Security Market Growing 17% Annually

  • Written by Joe Panettieri 1
  • September 23, 2008

The U.S. managed security services market will grow to $2.8 billion by 2012, up from $1.3 billion in 2007, predicts International Data Corp. That’s a healthy 17.2% compound annual growth rate. It’s good to see the market growing, But I’m always a little skeptical of such forecasts. Here’s why.

Much of the new revenue will go to carrier-class managed service providers that secure Global 2000 companies. Plus, 89.5 percent of MSPs already offer some sort of managed security services, according to our original MSPmentor 100 report. (You can participate in this year’s MSPmentor 100 survey right here.)

Despite the flood of MSPs focused on managed security, I still think there’s room to compete and innovate. All small businesses require spam filtering, patch management, endpoint security and other basic security capabilities. But other types of security — such as video surveillance — are emerging.

Also, keep in mind that MSPs will need to secure new types of devices — from smart phones to emerging Netbooks to thin clients.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Business Models

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2 comments

  1. Avatar Steve Crawford September 23, 2008 @ 2:32 pm
    Reply

    Joe, agree that managed security is a substantial market and will continue to grow, but for the smaller players it will be increasingly difficult to compete with the larger players on security solutions and basic IT management alone.

    Managed security is less of a greenfield opportunity for MSPs, and more of a ‘must have’ that then allows them to differentiate on customer care and other services that are unique to them. But if they don’t have managed security offerings, and increasingly other managed application services, then it will be difficult to hold their own against the bigger players.

    Markets consolidate over time, and hot services of yesterday become commodity offerings tomorrow. I’d argue that managed security is starting to become a commoditized service offering, and therefore it’s important for MSPs to augment their services portfolios with other on-demand service offerings.

  2. Avatar Joe Panettieri September 23, 2008 @ 2:47 pm
    Reply

    Steve: To reinforce your point about commodity vs. emerging managed services, check out our Managed Services Hype Cycle, based on Gartner’s technology adoption curve.

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