Security Software Spending Surges

Stock ChartSecurity is rarely a losing bet, but 2012 was a particularly good year for the security vendor and channel community with a 7.9 percent gross increase in sales, according to research firm Gartner. The big winners: Symantec Corp. and McAfee Inc.

Gartner says the security software market, comprised of everything from consumer antivirus to security information management and encryption, grew from $17.7 billion in 2011 to $19.1 billion in 2012.

Symantec, the overwhelming leader with a market share of 19.6 percent, saw its revenue rise from $3.6 billion in 2011 to $3.7 billion in 2012 — that’s 2.6 percent growth. Symantec expanded sales even as it  undergoes restructuring, which has stalled many of its product and program initiatives.

Longtime rival McAfee saw a steep increase in sales, rising from $1.2 billion in 2011 to $1.7 billion in 2012. Gartner notes that some of McAfee’s 37 percent year-over-year growth is attributable to Intel Corp. — its corporate owner — writing down part of its value related to the acquisition.

Trend Micro Inc., the world’s third largest security vendor, saw its revenue decrease 2.7 percent, with gross sales falling to $1.17 billion from $1.2 billion the previous year. While Trend Micro diversifies into virtualization and cloud security, Gartner says its sales were hurt by dampening demand for its enterprise and consumer products.

The bulk of the security market is comprised of other vendors, including Kaspersky Lab ZAO, Sophos Ltd. and Websense Inc., with combined 2012 revenues of $10.8 billion, an 8 percent increase over 2011.

Gartner notes security sales activities are not uniform. Some regions are flat or lagging – such as Western Europe – due to uncertain economic conditions. Developing regions, though, are seeing more net-new installations as companies form or expand to meet local economic demands.

The true bright spot in the security market: the SMB segment.

“Security continues to be a top priority across all technology categories in the SMB market. The rise of midmarket demand presents a new challenge for participants in the security space, as SMB requirements are different from those of larger enterprises,” said Ruggero Contu, research director at Gartner. “Security buyers from SMBs are increasingly considering security as a service as an alternative for deploying security technologies, particularly for areas such as email and Web security, which is leading to more market consolidation and more competitive pricing as established players acquire pure-play cloud-based specialists across the security landscape.”

The SMB security opportunity isn’t lost on the channel. Recent research by The 2112 Group, with the Ingram Micro SMB 500, finds solution providers servicing this segment see increasing opportunities in security technology sales and are investing heavily to meet that demand.

While Gartner attributes much of the increase to market demand, the contributions of the channel cannot be understated. Security solution providers tell Channelnomics they’re seeing more requests from clients for new technology that delivers higher degrees of risk management.

Gartner makes no forecast on this security growth continuing into 2013. However, 2112’s market research finds security will remain a steady and well-performing part of their portfolio and revenue mix.