IDC expects investment on security related products and services to grow at a five-year CAGR of 13.3% over the forecast period (2019-24) and reach USD 35 billion by 2024
Spending on security hardware, services, and software in APeJ is expected to reach USD 23.1 billion in 2021 – an increase of 12.6% over the previous year, according to IDC’s Worldwide Security Spending Guide. IDC expects investment on security related products and services to grow at a five-year CAGR of 13.3% over the forecast period (2019-24) and reach USD 35 billion by 2024. This growth is driven by increased cloud adoption, massive WFH migration, and transformation projects by enterprises to overcome operational challenges.
Industries that will drive the security spending in 2021 are banking, telecommunications, federal/central and state/local government which are more targeted by threat actors for fraud, cybercrime, and breaches. Together, these industries will constitute half of the total security spending. The industries that are seeing the greatest increase in security spending this year are state/local government (18.5%), transportation (13.9%), and retail (13.7%) – driven by increased focus on data security, e-commerce, work from home, digitalization of logistic monitoring, payments, and contracts, and in playing catch up due to underspending in the area in previous years.
“2020 defined the importance of digital for everyone globally, but it also highlighted shortcomings in security strategies. While leading organizations are starting to adopt a more platform-based approach, the majority are still buying point-solutions to address specific concerns. This majority needs to change their mindset and invest more strategically into their security architectures,” says Simon Piff, Vice President of Trust, Security, and Blockchain Research at IDC Asia/Pacific.
Having invested in security last year, enterprises realize their limited expertise that is now encouraging them to rely on trusted security partner to fulfill their security needs. As expected, Services will be both the largest and the fastest growing category among security markets, accounting for almost half of security spending throughout the forecast period at a 13.4% five-year CAGR. Among services, the most significant will be managed security services – delivering around 40% of the security services spending throughout the forecast – followed by consulting services and integration services. As the IT environment becomes more diverse and complex, enterprises are more dependent on managed service providers for security.
Security hardware will be the second largest of the security market, dominated by network security needs – including firewalls, intrusion detection and prevention, unified threat management, and virtual private networks. Security software spending is led by endpoint security, and Identity and Digital Trust Software, delivering more than half of the overall security software spend in 2021. Driving the growth in the security software category is the concern of enterprises to protect devices and networks used by remote work force from cyberattacks.
Large (500-1000 employees) and very large businesses (more than 1000 employees) will be responsible for two thirds of all security-related spending in 2021. These two segments will also see the strongest spending growth over the forecast period with CAGRs of 12.7% and 13.7% respectively. This growth is driven by large work force and the adoption of emerging technologies by the large organizations. Furthermore, Medium (100-499 employees) and small businesses (10-99 employees) is expected to spend more than US $5 billion combined on security solutions in 2021.
“In APeJ, investments on security-related products and solutions (i.e. endpoint security, VPN, and firewalls) will experience double-digit growth in 2021 due to the increased spending by both governments and enterprises (particularly in the banking, telecom, and professional services industry) to enable a safe, efficient, and trustworthy digital environment for the expanded remote workforce,” adds Sharad Kotagi, Associate Market Analyst at IDC IT Spending Guides, Customer Insights & Analysis.
From a geographical perspective, China alone will account more than 40% of total APeJ security spending in 2021, and the country spending is projected to take off at a five-year CAGR of 16.8% during the forecast period. Telecommunications and State/Local Government are the two leading drivers of the Chinese market for security related solutions, collectively accounting to one third of overall China spend in 2021. Australia and India are the next two largest countries in terms of security spending due to the presence of large number of businesses catering to domestic as well as international customers. Together, these countries will account 26% of the overall security spending in 2021.