Analysis of the EMEA Managed Security Services Market

  • October 2013
  • -
  • Frost & Sullivan
  • -
  • 109 pages

Protection and Risk Mitigation from Targeted Cyber Attacks is Driving Market Growth

The managed security services market continues to experience double-digit growth rates and is expected to maintain its momentum for the next five years. The increasing sophistication of targeted attacks, limited IT budgets, and the rising complexity around regulatory compliance are all factors driving the growth of managed security services. Frost & Sullivan carried out an analysis based on extensive primary research with leading managed security service providers present in Europe, the Middle East, and Africa (EMEA). This research service provides revenue forecasts the EMEA region by service segments, customer segments, vertical markets, and regions for the 2011 to 2018 timeframe.

Executive Summary

• The managed security services (MSS) market in Europe, the Middle East, and Africa (EMEA) continued to see strong growth rates in 2012.
• The complexities of securing an organisations’ network and infrastructure against targeted attacks has been a major growth driver.
• The need to reduce capital expenditures and to comply with relevant industry standards have also driven the adoption of MSS.
• Regulatory compliance, in particular data protection and data privacy compliance, acts simultaneously as a driver and as a restraint.
• The complexity of maintaining regularity compliance induces organisations to adopt MSS. However, misperceptions on regulations often deter organisations to engage in MSS.
• In line with these drivers, leading managed security service providers (MSSPs) have adopted a risk-based approach, whereby they focus on understanding a client’s specific business context, the risks the client is exposed to, and deliver MSS accordingly.
• Likewise, leading MSSPs have placed great emphasis on improving their security intelligence and security analytics capabilities.
• Investing in acquiring, developing, and retaining human capital also persists as a common practice among leading MSSPs.
• From a delivery-mode standpoint, the demand for customer premises equipment (CPE)-based MSS remains strong.
• Hosted MSS are, however, experiencing higher growth rates. The demand for hosted content, email, and Web security, as well as hosted distributed denial of service (DDoS) mitigation is expected to expand rapidly.
• Enterprises continue to constitute the main segment of MSS in EMEA. Frost & Sullivan believes that, in terms of market value, the enterprise segment will continue being dominant.
• From a regional perspective, the United Kingdom and Germany lead in terms of market value. In Scandinavia, Benelux, Switzerland, and Austria the adoption of MSS is relatively high.
• Frost & Sullivan believes that the market will continue to expand at double-digit growth rates throughout the forecast period from 2013 to 2018.

CEO’s Perspective

1. MSSPs are broadening their portfolios, increasingly focusing on security intelligence and security analytics.
2. Securing virtualised and cloud-based environments is increasingly important for customers and MSSPs.
3. Customers demand that MSSPs have a greater, more proactive role in improving their security posture.
4. Further market consolidation is expected to take place over the forecast period.
5. A shortage of highly-skilled security professionals remains a challenge for MSSPs and customers.

Market Overview—Definitions

Market Description
• MSSPs monitor results (log stream data) of security appliances (security products) from a security operations centre (SOC). In many instances, MSSPs also manage the security appliances throughout their lifecycle.
• By providing an outsourcing service, MSSPs help customers reduce capital expenditure (CAPEX) while providing in-depth expertise on security and maintaining efficient security management.
• MSSPs are expected to have expertise in a wide number of product vendors because initially they are hired to monitor and manage existing equipment.
• Frost & Sullivan splits the MSSP market into four segments: CPE-based MSS, hosted MSS, professional services, and technical services. In this research service, Frost & Sullivan will only include CPE-based MSS and hosted MSS.

Region Definitions
• Europe, the Middle East, and Africa (EMEA) includes countries in Western and Eastern Europe, Western Asia, and Africa.
• The following regions are included within the study:
- ACH refers to Austria and Switzerland.
- Benelux refers to Belgium, the Netherlands, and Luxembourg.
- Nordics refers to Denmark, Sweden, Norway, and Finland.
- CEE refers to the Baltic countries, Bulgaria, Czech Republic, Hungary, Poland, Romania, and Slovakia.
- MEA refers to countries in North and Sub-Saharan Africa, as well as countries in Western Asia.

Revenue Definitions
• Projected revenue is segmented according to service portfolio distribution, vertical market distribution, and region/country.
• Revenues generated by information security vendors who only offer to monitor their own products are excluded.
• Frost & Sullivan’s MSS market revenue models include installation costs incurred while procuring the services.
• Enterprise refers to an organisation with X or more users, while SMB refers to small and medium businesses with fewer than X users. Within the SMB segment, small business refers to organisations with less than X users, and medium business refers to organisations having between X and X users.
• Frost & Sullivan provides analyses of the MSS market in the following areas: growth, demand, pricing, channel distribution, legislation, and technology trends. These include regional and vertical market forecasts as well as an in-depth look at the competition within the MSSP market.
• The base year for this study is 2012, and revenue forecasts and trends are provided through 2018. Historical data is quantified to reveal trends since 2011.

Key Questions This Study Will Answer

• What is the total addressable market of MSS market by region/country in EMEA?
• What are the values of the CPE and hosted MSS segments? How fast will these segments grow over the next five years?
• Which services are experiencing more demand? How will the demand for services change over the forecast period?
• What are the most prominent verticals that MSSPs are operating in?
• What trends are, and will continue, shaping the future of MSSPs and MSS offerings?
• Who are the leading competitors in the EMEA MSS market?

Table Of Contents

Table of Contents

1. Executive Summary
2. Market Overview
3. Total MSS Market
• External Challenges: Drivers and Restraints
• Forecast and Trends
• Demand Analysis
• Market Share and Competitive Analysis
4. CPE-based MSS Segment Breakdown
5. Hosted MSS Segment Breakdown
6. The Last Word
7. Appendix
8. Notable Market Participants

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