Analysts are forecasting that by 2020, yearly spend on technology security products will increase by 35 percent over 2016 investment levels.
The first Worldwide Semiannual Security Spending Guide from International Data Corporation (IDC) forecasts worldwide revenues for security-related hardware, software and services will grow from $73.7 billion (£60bn) per annum in 2016 to $100 billion (£80bn) by 2020.
This represents a compound annual growth rate (CAGR) of 8.3 percent, more than twice the rate of overall IT spending growth, over the five-year forecast period.
"Today's security climate is such that enterprises fear becoming victims of the next major cyber-attack or cyber extortion," said Sean Pike, program vice president, Security Products. "As a result, security has become heavily scrutinised by boards of directors demanding that security budgets are used wisely and solutions operate at peak efficiency."
The industries making the largest investments in security solutions in 2016 will be banking ($8.6 billion – £6.9bn), followed by discrete manufacturing, federal/central government and process manufacturing. These four industries will deliver 37 percent of worldwide security revenues this year and will remain the largest industries in terms of total spending throughout the five-year forecast.
The industries that will see the fastest growth in security investments will be healthcare (10.3 percent CAGR), followed by telecommunications, utilities, state/local government and securities and investment services. Each of these industries will experience CAGRs above 9.0 percent over the forecast period.
The largest category of investment will be security-related services, which will account for nearly 45 percent of all security spending worldwide in 2016.
The largest segment, managed security services, is forecast to generate revenues of $13 billion (£10.5bn) this year.
Security software will be the second largest category in 2016, with endpoint security, identity and access management and security and vulnerability management software driving more than 75 percent of the category's revenues.
Finally, security hardware revenues will reach $14.0 billion (£11.3bn) in 2016, led by purchases of unified threat management systems. One of the fastest growing segments of the security products market will be user behavior analytics software with a CAGR of 12.2 percent.
Ilia Kolochenko, CEO of web security firm High-Tech Bridge, told SCMagazineUK.com, “Something is wrong here: we cannot continuously increase our cybersecurity budget and get instantly and more frequently hacked in parallel.”He said that too often “companies spend their budgets on new technologies, before conducting holistic and comprehensive risk (re)assessment in order to understand which risks and threats they need to mitigate and in which priority. Cyber-security management is not rocket science.”