Cloud-based security services are set for another bumper year in 2017, with current growth above the total for the total cyber security market.
According to analyst firm, Gartner, cloud-based security services will hit US$5.9 billion in 2017, up 21 per cent from 2016 and will reach US$9 billion by the 2020.
Specifically, technologies such as security incident event and incident management (SIEM), identity access management (IAM) are the fastest growing in the segment.
"Email security, web security and identity and IAM remain organisations' top-three cloud priorities," Gartner research director Ruggero Contu said.
“Mainstream services that address these priorities, including SIEM and IAM, and emerging services offer the most significant growth potential.”
The firm added that emerging offerings are among the fastest-growing segments and include threat intelligence enablement, cloud-based malware sandboxes, cloud-based data encryption, endpoint protection management, threat intelligence and web application firewalls (WAFs).
Small and midsize businesses (SMBs) are driving growth as they are becoming increasingly aware of security threats, according to Gartner.
The firm said they are also seeing that cloud deployments provide opportunities to reduce costs, especially for powering and cooling hardware-based security equipment and data centre floor space.
"The cloud medium is a natural fit for the needs of SMBs," Contu said. "Its ease of deployment and management, pay-as-you-consume pricing and simplified features make this delivery model attractive for organisations that lack staffing resources."
But this growth also extends to the enterprise where Gartner said companies are acknowledging the benefits of such a cyber approach and are investing accordingly.
"Cloud-based delivery models will remain a popular choice for security practices, with deployment expanding further to controls, such as cloud-based sandboxing and WAFs," he added.
A global survey conducted by the firm at the beginning of 2016 showed public cloud will be the prime delivery model for more than 60 per cent of security applications by the end of 2017.
"The ability to leverage security controls that are delivered, updated and managed through the cloud — and therefore require less time-consuming and costly implementations and maintenance activities — is of significant value to enterprises," Contu said.
"On the one hand, new greenfield demand arising from emerging requirements from SMBs is driving growth."
On the other hand, Contu said new competitive dynamics and alternative pricing practices threaten traditional business models.
"Providers need to adapt to the shift from an on-premises to a cloud-delivery business model," he explained.
"Overall, one of the main focus areas for providers relates to the shift from owning and selling a product, to selling and supporting ongoing service delivery."