The global data center security market size was valued at USD 6.36 billion in 2015. It is expected to gain traction in the coming years due to the increase in the awareness of threats to the integrity and sovereignty, tremendous increase in online traffic, rapid shift towards the cloud-based infrastructure, increase in cyber-attacks, and the necessity to implement a comprehensive security policy.
The data centers act as the repositories of critical data and core assets of organizations including customer information, intellectual property, and transaction records, the safeguarding of which is the prime concern of the organization. The security solutions help in protecting and safeguarding these critical assets by providing immunity at various levels.
U.S. Data Center Security Market by Logical Security Solution, 2014 - 2024 (USD Million)
The industry is anticipated to grow at a tremendous rate over the forecast period due to the increase in number of businesses adopting cloud computing platforms and virtualization techniques for their business information storage. These create additional vulnerabilities at different levels in the network, emphasizing on the need to adopt and implement exhaustive measures, both logical as well as physical. Moreover, the virtualization of workplaces, emergence of software-defined storage, software-defined networking, and growing trend of Bring Your Own Device (BYOD) makes the safety of the information even more susceptible to malware attacks and intrusion threats, thereby creating additional control and surveillance issues in the existing infrastructure of the data centers. This onslaught of new technologies is expected to propel the demand for greater defensive measures and upgrades of the existing systems with virtualized layers of infrastructure, authorization, and filtering to protect them from myriad threats.
In addition, there have been greater efforts at both the international and national levels to regulate the government and industry regarding information integrity and privacy. Factors such as disaster recovery, incident response, and event management systems, coupled with the growing need for risk and compliance management systems, will lead to a steep increase in the demand for integrated data center security across the globe.
Furthermore, there is a growing need for implementing security measures without compromising on the scalability of networks and their performance. This has created a need for a controlled environment and the implementation of preventive measures at various levels, such as the physical, logical, and virtual levels. Due to this, the industry players are continually evolving their product offerings to maintain a competitive edge with a focus on new technology development and extensive research and development activities, owing to which the data center security market is expected to be dynamic and volatile over the forecast period.
Though the adoption of data center protection measures is slow in some regions due to low awareness and high initial costs, the overall market is expected to grow as a result of an increased focus on the security in the view of recent breaches, the scale of damage done, and the level of sophistication of these attacks. Hence, the data center security measures and its implementation have come to a forefront, leading the security market to grow in numerous new avenues. The adoption of new technologies, emergence of Software Defined Data Center (SDDC), as well as the large amount of traffic generated by the Internet of Things and online transactions are expected to boost the market even further over the forecast period.
The industry is anticipated to grow at an exceptional rate, owing to the rising demand from different sectors, such as healthcare, banking, financial services, retail companies, research and development firms, among others. The sensitive nature of the generated information stored by these industries makes them susceptible to attacks by hackers and vandals. Hence, these industries are expected to boost the demand for greater and better technology systems in the coming years.
The increasing amount of awareness about the emergence of new threats, the sophistication of attacks, and the next generation technology is driving the demand in the IT &telecom segment. The Financial Services segment is expected to be the fastest-growing segment, owing to the presence of sensitive business information and a larger attack area for incursions into the networks.
The overall marketplace includes solution and service wherein solution segment holds the major market share. The solution segment is divided into logical and physical security solution. The logical segment held more than 80% of the revenue in 2015.
Managed service is accounted for more than 30% of the revenue share in 2015 and is expected to grow at a CAGR of over 12% from 2016 to 2024. Rising number of cyber-attacks is expected to propel consultancy service demand over the forecast period.
Developed regions, such as North America and Europe, are expected to be the largest regions in terms of revenue, owing to a highly matured data center market. The shift of data centers locations towards the cold regions is also helping countries such as Canada to attract many industry players. Asia Pacific is expected to be the fastest growing segment in the coming years owing to growing IT spending and increasing adoption of cloud in small and medium enterprises in the region.
Symantec Corporation, Juniper Networks Inc., IBM Corp., Cisco Systems Inc., and Fortinet Inc. are some of the prominent vendors in the marketplace. The other key vendors include Checkpoint Software Technologies Limited, Dell Inc., Trend Micro Inc., Honeywell International, Citrix Systems Inc., EMC Corp, McAfee Inc. (Intel Corp.), and Hewlett-Packard Enterprise, among others.
The new product development and technological upgrades are anticipated to be the most effective ways for industry players to gain a competitive advantage and enhance their product capabilities. Resource pooling and strategic mergers & acquisitions are also an extensively adopted strategy by the key industry players to gain a significant market share. The key players in the data center security market have also been focusing on R&D activities for new product development and enhancement of its existing technology capability.
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