Revenues match rise in security threats

Threats from worms and viruses and the continuing purchase of firewalls and virtual private networks (VPNs) indicate that security remains a priority for many organisations, according to analyst Datamonitor.

For specialist vendors in the market, security revenues in the last three months of 2003 were 14 per cent higher than those in 2002, the analyst found.

In 2003, these vendors generated revenues of $5.33bn compared to $4.67bn in 2002. Fourth-quarter 2003 revenues were 22 per cent higher than the same quarter in 2002. The industry average is six per cent.

"The rise is an indication the market is growing steadily as a higher proportion of IT expenditure," said Ian Williams, managing analyst of Datamonitor's enterprise security programme.

Sales of antivirus software also outperformed the market average, with revenues for the three leading antivirus vendors rising by an average of 13 per cent in 2003.

Another area of sustained growth was in the firewall and VPN market, which continued to defy predictions that it has reached saturation.

And Datamonitor predicted that the recent ISS/Cobion, HP/TruLogica and SafeNet/Rainbow mergers would be followed by more acquisitions as vendors look to create meaningful portfolios to address emerging security models.

"When the boards of the large IT companies and big network vendors see growth it prompts them to be more proactive. It's thrown it all open now, and anyone can buy anyone," said Williams.

"We are now seeing the end game that was expected five years ago with an integration of IT and security,"