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Gartner Says Worldwide Information Security Spending Will Grow 7 Percent to Reach $86.4 Billion in 2017

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Business Impact of Security Incidents and Evolving Regulations Driving Market Growth

Worldwide spending on information security products and services will reach $86.4 billion in 2017, an increase of 7 percent over 2016, with spending expected to grow to $93 billion in 2018, according to the latest forecast from Gartner, Inc.

Within the infrastructure protection segment, Gartner forecasts fast growth in the security testing market (albeit from a small base) due to continued data breaches and growing demands for application security testing as part of DevOps. Spending on emerging application security testing tools, particularly interactive application security testing (IAST), will contribute to the growth of this segment through 2021.

Security services will continue to be the fastest growing segment, especially IT outsourcing, consulting and implementation services. However, hardware support services will see growth slowing, due to the adoption of virtual appliances, public cloud and software as a service (SaaS) editions of security solutions, which reduces the need for attached hardware support overall.

“Rising awareness among CEOs and boards of directors about the business impact of security incidents and an evolving regulatory landscape have led to continued spending on security products and services,” said Sid Deshpande, principal research analyst at Gartner.

“However, improving security is not just about spending on new technologies. As seen in the recent spate of global security incidents, doing the basics right has never been more important. Organizations can improve their security posture significantly just by addressing basic security and risk related hygiene elements like threat centric vulnerability management, centralized log management, internal network segmentation, backups and system hardening,” said Mr. Deshpande.

Other assumptions behind Gartner’s latest information security market forecast include:

The EU General Data Protection Regulation (GDPR) has created renewed interest, and will drive 65 percent of data loss prevention buying decisions today through 2018.

The EU General Data Protection Regulation (GDPR) has caused an overall panic and unease among organizations in Europe, but will also have a global effect since multinationals will also need to adhere to the new law. While organizations are working toward strengthening their knowledge of the regulation, those with some form of data loss prevention (DLP) already implemented are determining what additional capabilities they need to invest in (specifically, integrated DLP such as data classification, data masking and data discovery). In addition, organizations that do not already have strong DLP in place are looking to increase their capabilities.

By 2020, 40 percent of all managed security service (MSS) contracts will be bundled with other security services and broader IT outsourcing (ITO) projects, up from 20 percent today.

To deal with the complexity of designing, building and operating a mature security program in a short space of time, many large organizations are looking to security consulting and ITO providers that offer customizable delivery components that are sold with the MSS. As ITO providers and security consulting firms improve the maturity of the MSS they offer, customers will have a much broader range of bundling and service packaging options through which to consume MSS offerings. The large contract sizes associated with ITO and security outsourcing deals will drive significant growth for the MSS market through 2020.

By 2021, more than 80 percent of large businesses in China will deploy network security equipment from a local vendor.

China’s recently approved cybersecurity law will contribute to further displacement of U.S.-manufactured network security products with local Chinese vendors. Despite an increase of 24 percent in 2016, Gartner expects end-user spending growth in Asia/Pacific to return to single-digit yearly growth from 2018 onward, as a result of a decline in average selling prices (ASPs), due to the more competitive pricing of Chinese solutions.

More detailed analysis is available to Gartner clients in “Forecast Analysis: Information Security, Worldwide, 1Q17 Update” and “It’s Time to Align Your Vulnerability Management Priorities With the Biggest Threats.”

Gartner Security and Risk Management Summits

Gartner analysts will provide additional analysis on IT security trends at the Gartner Security & Risk Management Summits 2017 taking place in Mumbai, Sao Paulo, Sydney, London and Dubai. Follow news and updates from the events on Twitter at#GartnerSEC.About Gartner

About Gartner

Gartner, Inc. (NYSE: IT) is the world’s leading research and advisory company. The company helps business leaders across all major functions in every industry and enterprise size with the objective insights they need to make the right decisions. Gartner’s comprehensive suite of services delivers strategic advice and proven best practices to help clients succeed in their mission-critical priorities. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has more than 13,000 associates serving clients in 11,000 enterprises in 100 countries. For more information, visit www.gartner.com.

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Gartner Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. The company delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the valuable partner to clients in approximately 10,000 distinct enterprises worldwide. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, and has 8,300 associates, including more than 1,800 research analysts and consultants, and clients in more than 90 countries. For more information, visit www.gartner.com.

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