Worldwide Spending on Security Will Reach $81.7 Billion in 2017
A new update to the IDC Worldwide Semiannual Security Spending Guide forecasts worldwide revenues for security-related hardware, software, and services will reach $81.7 billion in 2017, an increase of 8.2% over 2016. Global spending on security solutions is expected to accelerate slightly over the next several years, achieving a compound annual growth rate (CAGR) of 8.7% through 2020 when revenues will be nearly $105 billion.
In addition to the banking, discrete manufacturing, and federal/central government industries, three other industries, process manufacturing, professional services, and telecommunications, will each spend more than $5 billion on security products this year. These will remain the six largest industries for security-related spending throughout the forecast period, while a robust CAGR of 11.2% will enable telecommunications to move into the number 5 position in 2018. Following telecommunications, the industries with the next fastest five-year CAGRs are state/local government (10.2%), healthcare (9.8%), utilities (9.7%), and banking (9.5%).
Services will be the largest area of security-related spending throughout the forecast, led by three of the five largest technology categories: managed security services, integration services, and consulting services. Together, companies will spend nearly $31.2 billion, more than 38% of the worldwide total, on these three categories in 2017. Network security will be the largest category of security-related spending in 2017 at $15.2 billion, while endpoint security software will be the third largest category at $10.2 billion.
The technology categories that will see the fastest spending growth over the 2015-2020 forecast period are device vulnerability assessment software (16.0% CAGR), software vulnerability assessment (14.5% CAGR), managed security services (12.2% CAGR), user behavioral analytics (12.2% CAGR), and UTM hardware (11.9% CAGR).
From a geographic perspective, the United States will be the largest market for security products throughout the forecast. In 2017, the U.S. is forecast to see $36.9 billion in security-related investments. Western Europe will be the second largest market with spending of nearly $19.2 billion this year, followed by the Asia/Pacific (excluding Japan) region. Asia/Pacific (excluding Japan) will be the fastest growing region with a CAGR of 18.5% over the 2015-2020 forecast period, followed by the Middle East & Africa (MEA)(9.2% CAGR) and Western Europe (8.0% CAGR).
From a company size perspective, large and very large businesses (those with more than 500 employees) will be responsible for roughly two thirds of all security-related spending throughout the forecast. IDC also expects very large businesses (more than 1,000 employees) to pass the $50 billion spending level in 2019. Small and medium businesses (SMBs) will also be a significant contributor to BDA spending with the remaining one third of worldwide revenues coming from companies with fewer than 500 employees.