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7/26/2007
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Cybercriminal Innovation Will Continue To Drive The IT Security Market

The creativity and ambition of cybercriminals all but ensure for years to come there will be a market not only for security technology but for individual security components provided by a multiplicity of vendors.

The creativity and ambition of cybercriminals all but ensure for years to come there will be a market not only for security technology but for individual security components provided by a multiplicity of vendors.That's the message of a recent Burton Group research paper entitled, "The Long Tail of Risk and the Dynamics of the Security Market," a sentiment that runs contrary to market trends, where a you know a vendor or technology has arrived because they're being snatched up by a larger vendor for hundreds of millions of dollars.

Earlier this week, IBM sealed a deal to integrate Watchfire's Web application vulnerability assessment and compliance technology with IBM Rational software quality management products. This was just the latest in a long string of major deals, which over the past few months have included Cisco's $830 million deal for e-mail security provider IronPort, HP's bid for application security provider SPI Dynamics, and Google's planned $625 million acquisition of Postini, a provider of managed security services.

Still, it's not the fate of every startup security product vendor or service provider to become part of the larger security machine, according to Burton Group analyst Bob Blakley, who wrote, "Unlike most markets, the security market is not driven solely by customer demand and vendor profit. It's also driven by innovation -- the innovation of the bad guys."

As a result, "the security market will therefore remain for the foreseeable future in a steady state which is 'always consolidating but never consolidated.'" Blakley wrote. There's certainly plenty of money being spent on security's moving target, a fact that guarantees to attract new waves of security entrepreneurs for years to come. IDC predicts the market for security products and services will reach $66.6 billion by 2010.

Others aren't so sure. Addressing this year's RSA conference in San Francisco in February, EMC's RSA division president Art Coviello made headlines with the claim, "With the exception of a few innovative startups, the standalone security industry will end within three years." Of course, Coviello already had cashed in, so it wasn't a stretch for him to make this prediction. Still, as I noted before, RSA isn't the only company to have welcomed the warm embrace and deep pockets of a tech heavyweight looking to sink its hooks into the security market.

But Blakley concludes that entrepreneurial nimbleness is a necessary part of ensuring that security technology keeps pace with the evolving threat environment. "An organization's platform and its risks are never in equilibrium for long; as long as equilibrium exists, risks are under control and the bad guys are denied their payday," he wrote. "But bad guys need to feed their families, so they're constantly developing innovative ways to disrupt the risk equilibrium."

This constant cycle of attack and defend ensures that spending on IT security won't decrease anytime soon, if ever. Look on the bright side -- job security abounds: for IT security pros, security vendors, and, of course, the malicious malcontents who keep them on their toes.

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