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Even with the current economic instability, it is predicted that the market will see steady annual growth in all four security software markets -- firewalls; encryption software; security authentication, authorisation and administration ("3A"); and anti-virus software. The four markets all grew by 25 percent or more last year, according to a new report.
Overall, the worldwide Internet security software market increased by 33 percent to USD5.1 billion in 2000. By 2005 IDC claims the market is predicted to amass more than USD14 billion in revenue, a 2000 to 2005 compound annual growth rate (CAGR) of 23 percent.
"For security software vendors, the current economic instability is a double-edged sword," said Brian Burke, senior research analyst with IDC, who produced the report. "On the one hand, it's forcing companies to reduce spending. On the other, it's forcing them to look for ways to cut costs, become more security proficient and build trusted relationships with customers, partners, suppliers and channels -- which are areas security software can help."
IDC expects security authentication, authorisation and administration to be both the largest and the fastest-growing segment of Internet security software. It forecasts that 3A revenues will increase to over USD9.5 billion, representing a 2005 market share of 67 percent.
Anti-virus software will also play an important role in the market's growth, according to the research firm. "The explosive growth of wireless handheld devices that are able to transmit and receive data opens the door to a whole new opportunity for virus writers and the vendors who try to stop them," Burke said.
North America will continue to account for more than half of the worldwide Internet security software revenue in 2005 at 52 percent. Asia-Pacific will be the fastest-growing region for Internet security software with revenues increasing at a 2000-2005 CAGR of 32 percent. According to IDC, this growth will help hike market share in this region from 12 percent in 2000 to 17 percent in 2005.
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