Cyber security investment saw a boost during the first quarter in 2020, driven mostly by an end of quarter surge in remote working.
During the first quarter of 2020, cyber security investment rose by 9.7 per cent year-on-year to US$10.4 billion. This figure encompasses spending on network security, endpoint security, web and email security, data security and vulnerability and security analytics.
This is according to research firm Canalys, with its chief analyst Matthew Ball claiming the start of the shift to remote working in March caused strong demand for endpoint security to protect this workforce.
However, this growth is under threat with IT budgets being adjusted to brace for future economic downturns, with a 12 month forecast showing budgets to be reduced or stopped entirely, as explained by Ketaki Borade, Canalys research analyst.
“Workers will be more decentralised and work from multiple workplaces post-COVID-19. This has implications for the type of cyber security solutions needed, with greater emphasis on cloud security, zero-trust and policy automation," she said.
“But cyber security spending is unlikely to be completely protected from budget cuts, as organisations adjust to deteriorating fiscal conditions."
The highest-growing market segment for the quarter was endpoint security, with shipments growing 16.9 per cent year-on-year to US$1.6 billion, the highest-growing market segment. This was followed by web and email security with 13.8 per cent year-on-year to US$2.3 billion.
Next was vulnerability and security analytics with 11.4 per cent year-on-year to US$ 2.3 billion, and then data security with 6.6 per cent year-on-year to US$0.5 billion.
Network security meanwhile grew just 4 per cent to US$3.7 billion as the hardware appliance business market was hit by supply chain issues.
“In addition, many organisations were able to either better use existing network access through service engagements or increase capacity through additional licenses rather than build out new network security infrastructure,” Ball said.
Cisco was the top cyber security vendor during the quarter, making up 9.1 per cent of total market share. In second place was Palo Alto Networks with 7.8 per cent market share, followed by Fortinet with 5.9 per cent, Check Point with 5.4 per cent and Symantec with 4.7 per cent.
The more successful vendors were the ones that moved quickly to support existing and new customers during lockdown, said Borade.
Some examples of the support provided by these vendors included Cisco extending free licences for some of its products and announcing a US$2.5 billion business resiliency program and Palo Alto Networks extending payment terms through its financial services arm.
Looking to the quarters ahead, large projects are expected to be hit by delays and demand from small- and medium-sized businesses (SMB) declined mid-Q2. Multi-year contracts are expected to see fewer upfront payments, with some vendors switching over to subscription-based payment models.
Going to 2021 and beyond, cyber security investments are expected to pick up again, with some sectors seeing surges with customers switching from expired free trials to paid offers.
“The shift from high to low growth will affect all vendors," Borade said. "Private equity-backed vendors will look to cut costs further, while startups will accelerate their exit plans, giving larger vendors opportunities to acquire emerging technology and accelerate their strategies.
“Channel partners and customers will have to carefully assess the vendors they work with, in terms of support and investment to meet their evolving needs.”