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Rising Trend Seen for SaaS Security Managed Services

The software-as-a-service (SaaS) security market is booming, according to a report by Infonetics Research, announced on Monday.

SaaS security services accounted for 10 percent of the estimated $9.4 billion managed services market in 2010, according to Infonetics. That share is expected to grow to 22 percent by 2014. The report predicts that the SaaS security market will continue to grow as both enterprise and small-to-medium businesses deploy managed security services to fight off growing Web-based security threats.

Infonetics analyst Jeff Wilson predicts "strong growth" in SaaS security over the next five years. However, meeting enterprise needs for SaaS security is still a bit behind the curve, he noted in an e-mail.

"It's a work in progress, and it depends on the security technology in question," Wilson wrote. "The security technology itself is there, but many of the ancillary capabilities [that enterprises need] are still under development." Those capabilities include management, logging and reporting, he explained.

Wilson noted that security on the Internet has always been a big question for businesses of all sizes. The answers businesses will get "will vary based on the [service] provider you talk to," he said.

"The equation generally boils down to the provider showing that moving to SaaS improves a company's level of security over what they're doing right now, and then the buyer building trust over time with the provider," Wilson added.

For its study, Infonetics tracked major telcos (including AT&T, T-Systems, China Telecom and more), large hosting providers offering security services (such as Google), specialized service providers and security SaaS vendors such as Cisco/ScanSafe, Symantec and McAfee. The report, "Managed Security Services and SaaS," provides market forecasts through 2014.

The study's results showed that worldwide revenues for SaaS security services were up by 70 percent in 2009. Those revenues were boosted by demand for content security services that address, Web, e-mail and antivirus security.

From a SaaS revenue standpoint, customer premises equipment (CPE)-based security still dominates the security space, with a more than 60 percent market share. Next in line, in terms of SaaS revenue, are cloud-based security offerings with more than 20 percent of the market, followed by current SaaS security services, according to the report.

Wilson noted that cloud-based services, such as firewall services in hosting environments, are typically provided by a traditional service provider with network or datacenter facilities. These providers typically do not develop their own security technology, but instead add solutions from third-party security software vendors.

"SaaS offerings are developed and sold by one entity. The technology is branded with the name of the SaaS provider and, in most cases, they don't own their own network facilities," Wilson said. He noted that SaaS providers are a mix of focused service providers, such as zScaler, and technology/product suppliers such as Cisco, McAfee, Symantec and others.

About the Author

Herb Torrens is an award-winning freelance writer based in Southern California. He managed the MCSP program for a leading computer telephony integrator for more than five years and has worked with numerous solution providers including HP/Compaq, Nortel, and Microsoft in all forms of media.

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