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Asia-Pacific network security market remains resilient, says Frost andSullivan

Zafar Anjum | June 15, 2009
Growth slows to 6.5 per cent this year

SINGAPORE, 15 JUNE 2009 -- The Asia-Pacific network security market is expected to grow by 6.5 per cent this year, dropping nearly two-thirds from the robust growth in 2008.

The figures are according to Frost & Sullivan (,

Asia-Pacific Network Security Market. The analysis finds that the market covering 14 Asia-Pacific countries was worth an estimated US$1.81 billion in 2008, growing 17.9 per cent from the year before. A modest compound annual growth rate (CAGR) of 7.5 per cent is expected from 2009 to 2015, to gross revenues of just more than US$3 billion by end-2015.

Last year was perhaps too soon for the Asia-Pacific region to feel the full brunt of the financial meltdown. The final quarter however typically the strongest quarter was a tell-tale of what to expect in 2009, growing a dismal 1.5 per cent over the third quarter of 2008, said the research company.

Strong commitment to network security investments

According to Frost & Sullivan industry manager Arun Chandrasekaran, however, despite the weak sentiments and businesses exercising caution in spending, the commitment to network security investments remains strong.

Most companies recognise that the risks of not implementing adequate IT security far outweigh the cost of investing in it, he said.

Amidst pressure to control CAPEX (capital expenditure) and stretch every dollar, companies are more likely to deploy the more affordable converged security solutions, Chandrasekaran added. Adoption of managed security services is also expected to rise as companies try to minimise outright purchases.

The growth in 2008 continued to come from the epicentres of emerging markets such as China, India, as well as ASEAN countries like Vietnam and Indonesia, all registering year-on-year growth rates of more than 20 per cent.

Firewall and IPSec VPN (Internet protocol security virtual private network) solutions continued to be the dominant choice, accounting for the bulk of revenues last year at 74.6 per cent (US$1.34 billion). This trend is likely to continue through to 2015.

The small and medium businesses segment contributed slightly more than one-third to the total revenues in 2008. Despite being one of the hardest hit, the banking, financial services and insurance sector remains the leading adopter of network security solutions at 20.8 per cent (US$377 million) of revenues in 2008, followed closely by service providers and the government sector at 18.4 per cent (US$333 million) each.

Chandrasekaran believes that the banking sector will continue to be the biggest spender on network security moving forward, mainly due to rising regulatory compliance.


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