Managed Security Services in North America

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Managed Security Services in North America

  1. 1. Managed Security Services in North America Once a Convenience Becoming a Necessity Frank Dickson, Industry Principal Information & Network Security 30 July, 2014 © 2014 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  2. 2. 2 Today’s Presenter • Industry Principal on IT and Information Security market strategies, business opportunities, and technologies • Over 20 years of experience in the TMT (Technology, Media, Telecomm) space • Master of International Management with Distinction, Master of Business Administration & Bachelor of Science Cum Laude Frank Dickson, Principal Analyst Frost & Sullivan Follow me on: @fdickson777 frank.dickson@frost.com www.linkedin.com/in/frankdickson/
  3. 3. 3 Focus Points Why do Managed Security Services exist? What is the landscape for Managed Security Services? What are the prospects for the market? How will the market develop? Who are the dominant vendors? What are some predictions and recommendations for the market?
  4. 4. 4 Network security was once easy. Network Security Model Circa 1995 Source: http://www.foursquaretraining.co.uk
  5. 5. 5 Network security got slightly more complicated, but still manageable. Network Security Model Circa 2000 Source: http://www.foursquaretraining.co.uk
  6. 6. 6 Cyber Attackers are creative and smart 6
  7. 7. 7 A New Security Reality Is Here 61% Data theft and cybercrime are the greatest threats to their reputation of organizations say Average U.S. breach cost $7million+ 2013 Cost of Cyber Crime Study Ponemon Institute 2012 IBM Global Reputational Risk & IT Study
  8. 8. 8 The attack surface has grown as well. Multiple Devices and BYOD Heading To the Cloud Using What Comes Naturally Through Big Pipes From Anywhere
  9. 9. 9 Consequences of IT Sprawl in Security & Risk Management 9 Broader Exposure Footprint Certain Uncertainty in Data Location & Protection Government & Industry Intervention
  10. 10. 10 70% of security exec’s are concerned about cloud and mobile security Mobile malware grew 614% from March 2012 to March 2013 in one year A New Security Reality Is Here 61% Data theft and cybercrime are the greatest threats to their reputation of organizations say Average U.S. breach cost $7million+ 2013 Cost of Cyber Crime Study Ponemon Institute 2013 Juniper Mobile Threat Report 2012 IBM Global Reputational Risk & IT Study 2013 IBM CISO Survey
  11. 11. 11 Today, network security is more than “slightly more complicated,” and whether it is manageable is a debate. Frost & Sullivan Network Security Functions Framework Network Access & Operations Network Access Control Firewall/ Unified Threat Management Virtual Private Networking Identity and Access Management Analytics and Compliance Log Management Security Information & Event Management Vulnerability Management Forensics GRC Automation/ Orchestration Security Services IPS/IDS Web Content Security Advance Threat Detection Sandboxing DLP Internet Property Defense Distributed Denial-of- Service Protection Web Application Firewall Device Management Mobile Device Management Antivirus Endpoint Protection IaaS Hybrid On-premise
  12. 12. 12 Network security has become very complex.
  13. 13. 13 The increasing complexity of security is being addressed by security teams that are already overtaxed. Source: The 2013 (ISC)2 Global Information Security Workforce Study assisted by Frost & Sullivan
  14. 14. 14 Staffing problem is having an effect. Source: The 2013 (ISC)2 Global Information Security Workforce Study assisted by Frost & Sullivan
  15. 15. 15 83% of enterprises have difficulty finding the security skills they need tools from vendors 85 45 IBM client example 70% of security exec’s are concerned about cloud and mobile security Mobile malware grew 614% from March 2012 to March 2013 in one year A New Security Reality Is Here 61% Data theft and cybercrime are the greatest threats to their reputation of organizations say Average U.S. breach cost $7million+ 2013 Cost of Cyber Crime Study Ponemon Institute 2013 Juniper Mobile Threat Report 2012 IBM Global Reputational Risk & IT Study 2013 IBM CISO Survey 2012 ESG Research
  16. 16. 16 Poll Question What to you feel is the biggest challenge to maintaining your organization’s network security posture? • The increasing sophistication of cyber attacks • The complexity of tools needed to provide security • Not enough security professionals positions on staff • The inability to find individuals with the right security skills
  17. 17. 17 Security Organization Losing Ground 17 Spending Up Staffing is a Challenge Spinning Faster, but Not Moving Ahead
  18. 18. 18 Managed Security Services to the Rescue
  19. 19. 19 What exactly is meant by a managed service? • In today’s IT environment, managed services represent a strong partnership—in which the provider contributes technology and expertise, and the customer retains control and oversight—as both parties accept accountability for achieving specific outcomes. • Thus, a managed service must not only satisfactorily perform a function (e.g., networking or storage), but must incorporate tools and processes that allow customers and their expert partners to continually assess how well their goals are being met, and make necessary changes. • The managed service includes proactive, hands-on monitoring by expert technicians. • The customer participates in defining and redefining success. • The customer and provider share accountability for success.
  20. 20. 20 What Isn’t a Managed Service? • Business Process Outsourcing • Software as a Service (SaaS)/Hosted Applications: • Professional Services
  21. 21. 21 Managed Security Service Provider Offerings ProfessionalSecurity Services Security advisory Implementation services Technical services ManagedSecurity Services Security Asset Monitoring and Management Threat intelligence, research, detection, and remediation Risk and compliance management Advanced and emerging MSS Custom to Standard
  22. 22. 22 Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan Strong growth continues for North American managed security services. 0 2 4 6 8 10 12 14 16 18 20 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2010 2011 2012 2013 2014 2015 2016 2017 2018 Total Managed Security Services Market: Revenue Forecast, North America, 2010–2018 Revenue($M) GrowthRate(%) Year
  23. 23. 23 Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan What services are managed security service providers delivering to clients? Total Managed Security Services Market: Percent Revenue Forecast by Segment, North America, 2013 Risk and compliance management Threat intelligence, research, detection and remediation Advanced and Emerging Managed Security Services CPE Hosted Security asset management and monitoring
  24. 24. 24 How did we get to where we are today? MaturityDevelopment Growth Decline Time MarketValue Total MSS Market: Market Life Cycle Analysis, North America, 2013 Source: Frost & Sullivan
  25. 25. 25 How did we get to where we are today? CPE-based MSS MaturityDevelopment Growth Decline Time MarketValue Although the need for hosted security services is increasing in demand, its growth is slower than expected. The CPE-based MSS segment will remain as the leading service and grow at a healthy rate. Total MSS Market: Market Life Cycle Analysis, North America, 2013 Source: Frost & Sullivan
  26. 26. 26 How did we get to where we are today? CPE-based MSS MaturityDevelopment Growth Decline Time MarketValue As the threat landscape evolves, the demand for assessment services will grow. Assessment services Although the need for hosted security services is increasing in demand, its growth is slower than expected. The CPE-based MSS segment will remain as the leading service and grow at a healthy rate. Total MSS Market: Market Life Cycle Analysis, North America, 2013 Source: Frost & Sullivan
  27. 27. 27 How did we get to where we are today? CPE-based MSS MaturityDevelopment Growth Decline Time MarketValue As the threat landscape evolves, the demand for assessment services will grow. Assessment services Although the need for hosted security services is increasing in demand, its growth is slower than expected. The CPE-based MSS segment will remain as the leading service and grow at a healthy rate. Hosted services continue to experience high growth. Customers are demanding that managed security service providers offer more emerging services from a hosted model. Hosted MSS Total MSS Market: Market Life Cycle Analysis, North America, 2013 Source: Frost & Sullivan
  28. 28. 28 How did we get to where we are today? CPE-based MSS Threat detection and remediation MaturityDevelopment Growth Decline Time MarketValue As the threat landscape evolves, the demand for assessment services will grow. Assessment services Although the need for hosted security services is increasing in demand, its growth is slower than expected. The CPE-based MSS segment will remain as the leading service and grow at a healthy rate. Hosted services continue to experience high growth. Customers are demanding that managed security service providers offer more emerging services from a hosted model. Hosted MSS Total MSS Market: Market Life Cycle Analysis, North America, 2013 Threat detection and remediation is a growth area in managed security services as providers look to provide higher value services. Source: Frost & Sullivan
  29. 29. 29 How did we get to where we are today? CPE-based MSS Threat detection and remediation MaturityDevelopment Growth Decline Time MarketValue As the threat landscape evolves, the demand for assessment services will grow. Assessment services Although the need for hosted security services is increasing in demand, its growth is slower than expected. The CPE-based MSS segment will remain as the leading service and grow at a healthy rate. Hosted services continue to experience high growth. Customers are demanding that managed security service providers offer more emerging services from a hosted model. Hosted MSS Total MSS Market: Market Life Cycle Analysis, North America, 2013 Threat detection and remediation is a growth area in managed security services as providers look to provide higher value services. Advanced (Big Data) Analytics Services Managed security service providers are launching advanced analytics services in a number of fashions. This is the hottest area in managed security services as managed security service providers look to differentiate and be a high-value solutions provider.
  30. 30. 30 Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan 20112009 2013 2018 Need for combined services: AV/AS/CF Hosted demand emerging – but slower than expected Growth in Managed SIEM and log management Expansion and advancement of mobile security offerings Enhanced threat detection & remediation capabilities Increase demand in compliance services Total MSS Market: Service Technology Road Map, North America, 2010–2018 Managed security migrates to cloud- delivered security services Advanced analytics solutions becomes a key differentiator MSS evolve to secure changing technology and in parallel with the perceived threat.
  31. 31. 31 Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan Compliance and threat remediation services are becoming significant segments. Security asset management and monitoring Risk and compliance management Threat intelligence, research, detection and remediation Advanced and Emerging Managed Security Services 2010 Total Managed Security Services Market: Percent Revenue Forecast by Segment Security asset management and monitoring Risk and compliance management Threat intelligence, research, detection and remediation Advanced and Emerging Managed Security Services 2018 Total Managed Security Services Market: Percent Revenue Forecast by Segment
  32. 32. 32 Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan Solutionary SilverSky MegaPath CenturyLink Level 3 Nuspire CompuCom Systems Alert Logic Sprint Masergy The market is typified by a significant number of participants. VerizonAT&T Dell SecureWorks IBM Symantec British Telecom Trustwave HP Percent of Revenue Total MSS Market: North America, 2013 Notable “Other” Market Participants Remaining Players 31% Remaining players are comprised of managed security service providers that are NOT including on this slide.
  33. 33. 33 Five factors are leading competition Stronger relationships with Consulting and Professional Services is being required. Advanced Threat Detection and Remediation Services is becoming a differentiator. Services are being integrated into Managed Services Telecommunication providers with managed security service offerings are leveraging their access customers to develop new managed security service accounts. Need for compliance assistance is a strong source of funding for managed security services.
  34. 34. 34 Source: Frost & Sullivan Predictions Managed security services to defend against APTs will become increasing popular. This segment will drive market. 1 Compliance will continue to be a strong driver for North American managed security services. Unfortunately, compliance needs will continue to justify and fund spending for non-compliance related security spending. 2 Advanced and emerging services will increasingly be introduced to the market in 2015. Identity and access management, mobile security, and cloud security should lead these new services. 3
  35. 35. 35 Source: Frost & Sullivan Recommendations North American managed security services providers are advised not to get overly distracted by the hype in the news. Successful providers are the companies that stay close to their customers and provide solutions. Although not “sexy,” managed security service providers that focus on their customers are most success in growing revenue. 1 Threat and incident remediation is THE growth sector. Customers want solutions that solve problems and not just add to the number of alerts to be addressed. The most successful managed security service providers will approach this sector with a unique service attribution such as big data or unique sensory data collection. 2 The linking between managed security services and consulting, professional & technical services is unmistakable. Providing consulting, professional & technical services is not a requirement for managed security services providers . . . unless the provider is looking to grow its revenue. 3
  36. 36. 36 Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities Phone: 1-877-GOFROST (463-7678) Email: myfrost@frost.com
  37. 37. 37 Your Feedback is Important to Us Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. What would you like to see from Frost & Sullivan?
  38. 38. 38 http://twitter.com/fdickson777 Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/frankdickson http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan
  39. 39. 39 For Additional Information Chris Kissel Industry Analyst IT & Network Security, IRG-74 (623) 910-7986 Christopher.Kissell@frost.com Michael Suby VP of Research IT & Network Security, IRG-74 (720) 344-4860 Mike.Suby@frost.com Frank Dickson Principal Analyst IT & Network Security, IRG-74 (469) 387-0256 Frank.Dickson@frost.com Chris Rodriguez Senior Analyst IT & Network Security, IRG-74 (210) 477-8423 Chris.Rodriguez@frost.com

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