State of the IT security sector

Security is fast becoming the hot sector of the IT industry, with a global proliferation of start-up companies focusing on niche areas of expertise.

Yet at the same time, the market is driving industry players towards end-to-end solutions. In any booming market, there are many new players followed by a period of consolidation and convergence.

In IT security, this merger and acquisition activity is likely to be accelerated due to the demand by customers for holistic offerings.

The need for information security is becoming more and more entrenched as organisations find themselves needing to protect their data from a wider range of attacks, both internally and externally, as well as complying with good corporate governance, says SecureData MD Brett Parker. Further, the proliferation of devices that communicate with computers opens new vulnerabilities.

"Outside of SA, global innovation indicators demonstrate a groundswell of new entrants into information security across US and Europe, with many hundreds of start-up companies introducing new solutions at the various information security conferences around the world," says SecureData director of product and technologies, Wayne Biehn.

Most of the new players focus on niche areas or develop their own products. If successful, these companies are typically bought by bigger players looking to plug gaps in their own offerings.

"The industry used to be largely a product play," says Biehn. "But as the industry matures, it is becoming more solutions-focused, although a strong service-orientation is also important.

"Today you can't 'just be in security'; customers are demanding holistic packages and this is driving the comprehensive approach to risk management."

In SA, the market is clearly buoyant. "SA's information security market is definitely experiencing accelerated growth and all suggestions appear to indicate that it will continue to grow," he says. These growth trends apply in varying degrees across all the information security market components of software, hardware and services.

Risk compliance has driven customer adoption swiftness at different rates in different markets, and Biehn believes SA is still behind the curve internationally. "But as and when more government-initiated and industry-centred compliance initiatives are localised, compliance will have its say in SA in due course."

This implies that the local IT security industry has more scope for growth. However, in terms of local vendor innovation, Biehn says SA is more inclined to demonstrate growth in information security from a 'market maker' perspective than from an 'innovator' perspective.

"More and more South African supply companies and, equally so, divisions of internal companies based in SA, are adding information security capacities and conversations to their existing business portfolios," he says. "These local companies serve to create markets in SA for solutions that other international vendors introduce through innovation." As such, there are more new companies providing solutions and services in this field from a market maker perspective only, and not so much from an innovator perspective.

The push by the market towards end-to-end offerings is being driven by a combination of practicality and cost. Biehn says as more and more point solutions find their way to market, management of these disparate and individual security solutions will magnify the complexity of security operations.

"The implications are that customers are gravitating towards suites of security solutions from fewer vendors with single, unified management capability across the entire suite. The aim is to reduce cost of ownership while improving overall security posture, as opposed to deploying many single-point solutions being managed individually with incrementally high cost-of-ownership factors."

As the combined landscape becomes increasingly more populated - both in terms of the available basket of software and hardware security offerings and in terms of volume and degree of sophistication of threats and exploits - customers will move towards including security services to assess vulnerabilities, to mitigate threats, to manage deployments and to advise on improvements, designs and architectures to ensure security infrastructures scale appropriately for existing and future needs.

Reflecting the positive factors for the IT sector, the FTSE/JSE Africa Technology Index has enjoyed stellar returns, doubling in value over the past two years. And the good times look set to continue.