Print

Comment

Email

Digg

Del.icio.us

Reddit

As per VOICE&DATA's assessment, in 2003–04, India graduated from an emerging market to a market with significant business opportunity with a leading position in the Asia-Pacific region in terms of growth. In fact, India, along with China, began to be identified as one of the main growth drivers of the network security products market globally. In 2003–04, the Indian market grew by an estimated 30 percent to Rs 215 crore. However, it still remained overwhelmingly anti-virus and firewalls centric, though their share came down to around 70 percent of the market.

Growth Drivers
The singlemost fact that drove the growth in the market was the growing number of real threats to networks as reflected in the increasing virus and malicious code attacks on networks. This naturally created an increased awareness among user organization that resulted in deployment of more security. Security emerged as the number 1 or number 2 priority of many enterprises especially in the banking and finance, telecom, BPO and pharmaceutical sectors.

Security management has emerged as the forceful market driver leading to the adoption of security solutions. Compliance, particularly in the banking and finance sectors, was another driver of adoption of security measures in many organizations.

However, despite security being in almost everybody's mind, decision on deployment of tools and technologies had a long gestation period that lead to pretty long selling cycle for vendors. Sales cycle was also affected by a lack of sufficient trained-qualified experts. Also there was a trend to break down bigger security implementations into phases-first a pilot was done and only when the pilot showed some tangible results organization went for complete implementation.

Key Trends
There was a visible shift in the way corporates and enterprises viewed network security. Earlier organizations first built a network and then though of deploying security. That seems to have changed a lot now with organizations provisioning for security at the time of building the network. Also, some organizations began to budget for security separately unlike most others who either did not budget for it or made it part of their overall IT budget.

On the tools and technology front, anti-virus and firewalls have been at the forefront of India's deployment. However, increasingly there was an interest for security solutions such as intrusion detection and prevention (IDP) as corporations seek to protect themselves from business impacting threats such as virus, Trojans and worms that attack the application layer.

Even though globally security solution vendors focused a lot on integrated security solutions, the Indian market remained 'best of the breed' points product market. In other words, while vendors were trying to sell integrated solutions that combined anti-virus, content security, firewalls, IDS etc, users still preferred buying individual products. As such, the market was still a challenge for integrated security vendors like Cisco, CA, and Symantec.

Perhaps one of the most significant shifts was in the anti-virus products space. Not only anti-virus solutions began to be used for vulnerability assessment; they also emerged as key to content and web security. Also, anti-virus deployment and usage was now significantly licensed based. Anti-virus companies started offering outbreak prevention and control services. The shift to solutions and services was the reason for the over 50 percent growth in the anti-virus solutions market.

Another significant reason for their growth was the growing menace of Spam. As the link between Spam and virus attacks grew, anti-virus solutions also began filtering Spam.

The firewall market grew by 25 percent in 2003–04. The shift towards hardware based firewalls noticed in 2002-03 continued with more enterprises preferring to deploy hardware then software. The larger enterprises and provider segments have been very proactive in the deployment of appliance based security solutions.

As per VOICE&DATA estimates there was a 50 percent growth in the IDS market, with a significant amount of growth coming from the shift from IDS to IPS (Intrusion Prevention System). BPO companies and telecom operators were the important buyers of IPS. There was a growing interest in the small and medium businesses in IDS.

In the communication/transport security space, SSL VPN clearly emerged as the technology of choice mainly because of ease of use. SSL products were available from Cisco, Check Point Software, F5 Networks, Nokia, NetScreen, Nortel Networks and Symantec.

Two-factor authentication was on a roll this year as well growing at the rate of 50 percent. VOICE&DATA estimates that the market for authentication would be around Rs 8.5 crore. RSA Security was the only vendor of any significance in this segment. BPO and software companies remained the primary buyers of authentication products. Pharmaceutical companies also emerged as top buyers.

Key Market Segments
Like the past years, the banking and finance segment remained the number one buyer of security products. Software companies, telecom operators, BPO and pharmaceutical companies were the other key buyers. The main reason for these companies' interest in security solutions was the fact that they were the ones who faced huge amount of risks. Also, for companies in these segments security compliance was a must – either because of regulations (banks) or because of clients (BPO companies). All banks must get networked and go online by 2005 as per a government directive. While private sector banks are perceived to be more security conscious, in 2003–04 public sector banks like State Bank of India, Vijaya Bank, Punjab National Bank and Canara Bank appeared to have taken a lead in making investments in security as they together spent more than Rs 600 crore in networking their branches and deploying banking applications.

Strong growth in the telecom and software sector has led to the service provider & software companies being the other two major contributors. The service providers have been active in their build out for some time now and are beginning to explore and implement higher level solutions which can offered as value add for their customers.  Pharma companies were key buyers of network security products.

Government, despite longer decision-making cycle, emerged as one of the key market segments for network security vendors in 2003–04 as awareness grew. Public sector undertakings and education institutions were early movers. A number of government organizations floated tenders for buying network security products (they also asked for consulting, implementing and monitoring services).

Key Vendors
Cisco is clearly the leader in the Indian network security market with dominating the firewall market. According to VOICE&DATA estimates, Cisco commands around 25 percent of the market in the firewall market followed by CheckPoint (Software), NetScreen and Nokia. CheckPoint is the only player in the software firewall market.

NetScreen has emerged in the network security appliances with a predominant focus on the service provider markets. The vendor emerged as the fourth important player in the firewall space. Internet Security Systems (ISS) is a key player in the IDS market.

Among all the security solutions vendors, Cisco has been the most uniquely placed. This is because it was the only one that offered both networking as well as security products.

In the more mature anti-virus solutions category, Trend Micro remained the number one vendor followed by Symantec and Network Associates.

Ravi Shekhar Pandey