The Asia Pacific security market grew at a solid rate of 28.3 per cent in 2008, down from 36 per cent in 2007, according to Gartner, Inc. Despite a slower growth rate, the results show that the security market did not suffer a significant impact from the economic downturn.
In Australia, the security software market showed above-average growth of 27.5 per cent to reach revenues of A$248.6 million (US$207.2 million). Australia is the second-largest market for security software in Asia Pacific, following China.
“This growth is remarkable considering in the fourth quarter of 2008, global economies began to feel the impact of the credit crunch and the global economic downturn,” said Matthew Cheung, senior research analyst, Gartner. “Double digit growth in a challenging economic climate confirms that security remains a key priority for Asia Pacific CIOs and IT security leaders.”
Prime drivers of the industry
Data security and privacy, along with the need to protect IT infrastructure from the ever increasing rise in sophisticated and targeted attacks in Asia Pacific, were among the key drivers fuelling the growth of IT security software spending. For organizations operating in mature markets such as Australia, Singapore and Hong Kong, compliance was a major driver.
The secure Web gateway (SWG), security information event management (SIEM) and e-mail security market segments demonstrated the highest growth at 48 per cent, 31.1 per cent and 29.4 per cent, respectively. Consumer security and enterprise endpoint protection remained the two largest sub-segments of the Asia Pacific security market in 2008, totalling US$1.08 billion.
In 2008, the largest security markets in Asia Pacific were (in order) China, Australia and South Korea. Achieving over 30 per cent growth, the most dynamic countries were China, Indonesia and Vietnam.
“The region is vibrant and fast-growing, which is fostered by the need for modernization,” said Cheung. “Demand for IT security in emerging markets such as China is high, and even other small countries, such as Vietnam and Indonesia, are considered fast-emerging economies. Asia Pacific is viewed as a large long-term sustainable market, especially amid the global economic recession.”
China clocks fasts growth
As the biggest security market in Asia Pacific, China had the fastest growth of 39.4 per cent. Cheung attributed this to the high growth of local security players, such as Rising and Kingsoft, the heavy spending on Olympic Games in 2008 and the rapid increase in foreign investments. Other drivers included the modernization of IT infrastructure and domestic demand in the country.
The top five vendors held nearly half of the market at 47.8 per cent. The combined top five vendors’ market share is gradually falling in favour of smaller players, a sign that security remains a dynamic market where smaller players, new entrants and specialist vendors rise to become an effective challenge to the established leaders.
Symantec continued to be the market leader, accounting for 22 per cent of security software revenue in Asia Pacific in 2008 (see table). However, the company’s market share was down from 2007 when it accounted for 22.8 per cent of the market. McAfee experienced the strongest growth rate among the top five vendors, as its revenue increased 30.1 per cent in 2008. Local players from China exhibited the highest levels of growth in 2008. Other fast-growing vendors in the region included McAfee and Cisco.
Highest growth opportunities
Emerging markets in Asia Pacific are expected to provide the highest growth opportunities over the coming years, although the more mature markets are expected to provide sustainable levels of investment.
Purchasing attitudes point to an increase in popularity in security products delivered as software as a service (SaaS) or as an appliance, particularly for certain technologies such as e-mail security and SWG.
Estimates for 2009 predict that security will produce good growth levels, although the full impact of the global economic recession will result in a decrease in spending and the fall of growth rates to around half the levels achieved in 2008.
