Concerns about IT security threats will drive new business technology investment. Worldwide revenues for security-related hardware, software, and services will reach $81.7 billion in 2017, an increase of 8.2 percent over 2016, according to the latest market study by International Data Corporation (IDC).
Global spending on security solutions is expected to accelerate over the next few years, achieving a compound annual growth rate (CAGR) of 8.7 percent through 2020 when revenues will be nearly $105 billion.
"The rapid growth of digital transformation is putting pressures on companies across all industries to proactively invest in security to protect themselves against known and unknown threats," said Eileen Smith, program director at IDC.
IT Security Technology Market Development
On a global basis, the banking, discrete manufacturing, and federal government industries will spend the most on security hardware, software, and services throughout the 2015-2020 forecast. Combined, these three industries will deliver more than 30 percent of the worldwide total in 2017.
In addition to the banking, discrete manufacturing, and central government industries, three other industries (process manufacturing, professional services, and telecommunications) will each spend more than $5 billion on security products this year.
These will remain the six largest industries for security-related spending throughout the forecast period, while a robust CAGR of 11.2 percent will enable telecommunications to move into the number 5 position in 2018.
Following telecommunications, the industries with the next fastest five-year CAGRs are state and local government (10.2 percent), healthcare (9.8 percent), utilities (9.7 percent), and banking (9.5 percent).
Services will be the largest area of security-related spending, led by three of the five largest technology categories: managed security services, integration services, and consulting services. Together, IT organizations will spend nearly $31.2 billion -- that's more than 38 percent of the worldwide total -- on these three categories in 2017.
According to the IDC assessment, Network security (hardware and software combined) will be the largest category of security-related spending in 2017 at $15.2 billion, while endpoint security software will be the third largest category at $10.2 billion.
IT security categories that will see the fastest spending growth are device vulnerability assessment software (16 percent CAGR), software vulnerability assessment (14.5 percent CAGR), managed security services (12.2 percent CAGR), user behavioral analytics (12.2 percent CAGR), and UTM hardware (11.9 percent CAGR).
The United States will be the largest market for security products throughout the forecast. In 2017, the U.S. is forecast to see $36.9 billion in security-related investments. Western Europe will be the second largest market with spending of nearly $19.2 billion this year, followed by the Asia-Pacific (excluding Japan) region.
Outlook for IT Security Market Growth
Asia-Pacific (excluding Japan) will be the fastest growing region with a CAGR of 18.5 percent over the 2015-2020 forecast period, followed by the Middle East and Africa (9.2 percent CAGR) and Western Europe (8 percent CAGR).
Large and very large businesses will be responsible for roughly two thirds of all security-related spending throughout the forecast. IDC also expects very large businesses to pass the $50 billion spending level in 2019.
Small and medium businesses will also be a significant contributor to spending with the remaining one third of worldwide revenues coming from companies with fewer than 500 employees.