The managed security services (MSS) market in Europe, Middle East and Africa (EMEA) is seeing double-digit growth in revenue.
According to Frost & Sullivan’s research, the market was valued at $4.27 billion in 2016 and is expected to reach $8.26 billion by 2021 at a compound annual growth rate (CAGR) of 14.1 percent during 2016 through 2021. It is in its third consecutive year of double-digit, year-on-year growth, after seeing a 16% CAGR in 2016, after a 15% increase in 2015.
While new market entrants with network-based MSS propositions and remediation capabilities are disrupting the MSS provider (MSSP) landscape, mature technologies such as cloud migration, enterprise mobility and always-on availability are boosting MSS adoption. These factors have stoked demand for expert security professionals, who are in short supply.
Partly in response to this human resource crunch, and the need to ensure compliance with Europe-wide General Data Protection Regulations (GDPR), businesses and public entities of all sizes are turning to MSSPs, the firm said.
“Customers want solutions that solve problems, rather than mere alerts to a potential problem,” said Frost & Sullivan Digital Transformation research director Adrian Drozd. “Therefore, MSSPs that offer consulting, professional and technical services could well outpace the overall market.”
The report said that trends show a decline in the combined market share of the top three participants and an increase in the number of suppliers. Merger and acquisition activity has continued in 2016, with several similar sized companies pooling their expertise to compete with improved geographic scope, scale, and product breadth. At least two leading telecoms service providers, Vodafone and Deutsche Telekom, have re-launched their security services in 2016, and every other security vendor is also offering services to counter an expected decline in growth momentum for security hardware.
All of these supply-side activities are reflective of a buoyant market, but Frost & Sullivan noted that for players in the market, the key to longevity and success in an agile MSSP environment is staying ahead of the competition by capturing the next wave of higher-value MSS. The two growth MSS segments in the next five years are threat intelligence, and research and detection services.
Also, a large opportunity exists in growing the midsized market segment with the right pricing strategy; following a customer-centric approach by delivering solutions that meet evolving demands will be crucial as well. Also, vendors should adopt technology-led approaches to service delivery, such as unburdening tedious tasks through automation and a collaborative solution approach.
“Although the media has extensively covered security breaches, many enterprises still believe that they will not be subject to targeted attacks and, hence, do not require protection against advanced threats,” noted Drozd. “This approach to security has curtailed the adoption of MSS in the EMEA region—and is one that will doubtless change as the threat landscape evolves.”