Australian security services worth $38 million: Frost & Sullivan

Market climbed 17.2 per cent this year, driven by Cloud services migration
Frost & Sullivan APAC ICT practice vice president, Andrew Milroy.

Frost & Sullivan APAC ICT practice vice president, Andrew Milroy.

The Australian security-as-a-service market climbed 17.2 per cent this year and was driven by increasing Cloud adoption, according to new research from analyst firm, Frost & Sullivan.

In its report entitled A Strategic Analysis of the ANZ Security as a Service Market, the firm found that the market was now worth $38.4 million.

Ongoing migration from on-premise software and increasing Cloud services penetration among small businesses is forecasted to drive a compound annual growth rate (CAGR) of 16.6 per cent by 2016, by which time the market would be worth $83 million.

According to the report, Cloud adoption in Australia was amongst the highest in the world and software-as-a-service (SaaS) was the most popular service model, used by 72 per cent of Cloud computing users.

Frost & Sullivan APAC ICT practice vice president, Andrew Milroy, said in a statement that the shift to security-as-a-service was driven by a number of factors including a desire by business owners to classify IT expenses as operating rather than capital expenses.

“This ensures a more predictable monthly expenditure for organisations along with other benefits such as lower up-front costs, greater standardisation, ease of upgrades and ubiquitous access,” he said.

Adoption was also driven by the shortage of qualified IT security staff which led to organisations using contractors and incurring higher costs in the process.

“Security-as-a-service removes this issue, at the same time as lowering management and maintenance overheads, by placing responsibility for delivery and maintenance of the security offering on the Cloud services provider,” he said.

According to the report, other attractions of security-as-a-service included the flexibility for an organisation to scale up or down and the ability to protect users irrespective of their location.

However, Frost & Sullivan also found that organisations still hold some concerns about moving security to the Cloud with the most common being fear of loss of control by outsourcing to a third party service provider and data sovereignty.

For example, companies could be faced with a potential regulatory impact of relying on Asian or US-based data centres used by many security-as-a-service providers.

“This use of international data centres has also raised uncertainties about latency, particularly as it applies to Web security,” said Milroy.

“We believe that latency continues to be a prominent restraint for adoption of Web security as a service in the medium term.”

The report also found that the banking, financial services and insurance (BFSI) sector was leading demand for security-as-a-service from the Cloud, driven by business continuity and preventing loss of intellectual property.

“This sector has also been an early adopter of add-on modules such as encryption to adhere to regulatory compliance,” he said.

Other users of the service include federal and state government ministries and agencies looking to consolidate IT infrastructure across departments.

Got a security tip-off? Contact Hamish Barwick at hamish_barwick at idg.com.au

Follow Hamish Barwick on Twitter: @HamishBarwick

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