Dataquest: Security Software Sales Sail North

A study released by Dataquest Tuesday found that firms will have spent $3.2
billion on security software by the end of the year — a 22-percent increase
over the $2.5 billion spent in 1999.

What’s more, the market is projected to grow at a compound growth rate of
21.7 percent through 2004, with revenues topping $6.7 billion, said
Dataquest, a Gartner Group division.

Common sense dictates this should not come as a surprise: As more and more
e-commerce businesses head online and begin to ramp up their offensive
attack on rivals, more and more defense becomes a necessity.

“As Internet and e-commerce applications mature, security will gain
increased focus, creating more opportunity for vendors,” said DiCenzo said.
“Vendors of point solutions that are not best-of-breed need to widen their
portfolios to address the limited market for suite-type solutions or look
for merger or acquisition partners.”

Hackers, too, are becoming more sophisticated and malevolent code savvy,
cooking up nasty little virus such as this year’s Melissa e-mail bug and,
most recently, the Palm
Phage virus
, which was the first true virus to affect personal digital
assistants. This makes bolstered protection much more of a necessity than a

Roberto Medrano, head of HP’s Internet Security Solutions Division, told Tuesday that Dataquest’s estimates are neither overblown nor conservative.

“I’ve seen estimate that were higher and estimates that were lower,” Medrano said. “What we will see is an increase in the number of security solutions for wireless devices and for WAP protocol. Growth will not be as significant in the PC industry, but will continue to increase for infrastructure.”

Medrano also said he noticed security increasingly since the Y2K preparations began a few years ago.

“Peoples’ attitudes have changed,” Medrano said. “It used to be people would get security for defense, but now I call it an enabler of business. People need this to continue bringing in new customers in e-commerce and e-services. It’s just like when I go to a bank — I go there because I know my money is secure.”

Medrano, who was in New York at Wireless World 2000 to promote a new HP security for WAP-enabled Nokia phones, said that the more technology and hackers get sophisticated, the greater the need for new technologies.

That’s where firms such as Network Associates, Symantec and Trend Micro
chime in as leaders (31 percent all-told) of the anti-virus software market.
With 43.8 percent, 33.8 percent and 11.9 percent of the market share,
respectively, the three firms constitute the bedrock of the industry.

However, they are not the only players in the their sector. Until September,
RSA Security, a leader in e-security via public key infrastructure, had held
a patent on an encryption algorithm that was so important, one of its
largest rivals declared the firm had held
the industry back

That competitor, Baltimore Technologies, went on to release a number of
products using the algorithm before notching a blockbuster purchase in
mid-September when it bought Content Technologies for nearly $1 billion.

Content Technologies products enable organizations to implement policies
protecting them against confidentiality breaches, exposure
to e-mail legal liability, junk e-mail, e-mail-borne viruses, and misuse of
e-mail and the Web. With the purchase, Baltimore tacked on over 6,000
customers and 6 million users throughout the world currently use Content
Technologies MIMEsweeper to protect against business and network integrity

“Just as e-security solutions have enabled and become the de facto
standard f

or secure e-commerce, content-based security is increasingly
requested by enterprises as part of their business-critical e-security
infrastructure,” Fran Rooney, chief executive
officer of Baltimore.

Still, Jacob Furst, a teacher of Internet security at DePaul University told Tuesday that while he agreed that Internet security is growing more and more important, he said Dataquest has stated the obvious of what has been known for some time.

He also disagreed with HP’s Medrano, saying that while security solutions for wireless devices should not be ignored, that an emphasis should probably be put on securing high-speed fiber-optics Internet access, which moves in lightning-quick terabyte-per-second speed.

“Sure, wireless is smooth and sexy right now,” Furst said. “But how polluted do you think people will want our airwaves to be?”

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