INDUSTRY

FRAMINGHAM, MA -- In 2000, the worldwide market for information security services grew to approximately $6.7 billion. By the end of 2005, IDC expects this market to more than triple to $21 billion at a compound annual growth rate of approximately 25.5% over the 2000 to 2005 period. "The growing corporate appetite for remote LAN, Internet, extranet/intranet, and wireless access services will drive the need for advanced information security services as technologies for circumventing network security systems continue to keep pace with the technologies designed to defend against them," said Allan Carey, senior analyst with IDC's Information Security Services research program. "The growth in this market will come from clients who recognize the value of engaging third-party service providers skilled at developing customized security strategies that solve real business problems. By implementing a best-in-class security architecture coupled with continuous monitoring and management of the infrastructure, security service firms enable clients to mitigate the risks associated with their business." IDC's research indicates the financial services sector will continue to represent the single-largest source of information security services spending, growing from $848 million in 2000 to approximately $2.2 billion in 2005. Downtime equating to lost transactional revenue, the need to remain one step ahead of fraud, and government regulations are all factors leading to the growth forecast in the financial sector. Regionally, IDC believes international opportunities will continue to expand, especially in rapidly growing areas such as Asia/Pacific, Latin America, and Western Europe. IDC estimates that one of the fastest-growing regions of the world for information security services over the next five years will be Asia/Pacific at 29.8%. One factor influencing this growth is Internet adoption whether via cyber cafes in China or Web-enabled wireless devices throughout the region. IDC believes success in regional markets will come to those firms that attain the ability to overcome technological hurdles as well as regulatory and cultural hurdles. Although representing the smallest commercial sector in terms of services spending in 2000, the small business category (i.e., firms with 100-999 employees) will represent the fastest-growing opportunity in this sector through 2005. As small businesses continue to transition their networks to high-bandwidth architectures capable of handling a range of applications, from ecommerce to wireless, these organizations will invest more aggressively in security-related services. IDC's report, Mid-2001 Update: Information Security Services Worldwide Market Forecast and Analysis, 2000-2005, (IDC #W25415 ) examines the U.S. and worldwide markets for information security consulting, implementation, management, response, and education and training services from 2000 through 2005. It presents market sizing and five-year growth forecasts for 17 discrete service activities, including top-level segmentation by geography, vertical industry, and company size, and describes the influence of worldwide industry trends and customer preferences identified through IDC's ongoing information security services research. For additional information visit www.idc.com