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Indian enterprisesbig and small have been under attack from all corners (outside and inside) with mobile, Internet and now web 2.0 only adding to their vulnerabilities. The ever-increasing need to manage these threats, have seen the security products and services markets in India performing better than average. Last year was no exception, notwithstanding the slowdown. Talking purely of external threats, in FY 09, it was found that enterprises were exposed to almost 12,885 vulnerabilities. With the ubiquity of the Internet, most attacks came through the web browser and web applications.

The fact that India had the fifth highest number of broadband subscribers in the APJ region in 2008, and the third highest volume of malicious activities (with 10% of the regional total, according to Symantecs Internet Security Report), makes it mandatory for enterprises to be on high alert. Interestingly, computers from the US and China were the leading source of web based attacks targeting India, accounting for 84% and 5% respectively. Moreover, there was a 300 times increase in the malware level in India last year, with close to 245 mn malicious malware programs running on the Internet each month. Symantec wrote more malicious code signatures (more than 1.6 mn in FY 09) in the last fiscal and the year before put together, than in the last ten years before that.

Coming to the threats within an organization, the loss of data prevention was one big trend. The fact that the market for data loss prevention software grew by 60% in the last fiscal says a lot about how critically the organizations perceived it.

So the bigger point that we are trying to makegood or bad depending on whether you are a security vendor or an enterprise CIOis that there was hardly any impact of the slowdown on the security market despite the negative market sentiments. The overall security market (including products and services) grew by a healthy 39%. The fact that it could not outgrow the previous years growth is not important, as the market still offered a lot of opportunities to both security product vendors and security service providers.

The high growth has come more from the services side, which grew by a greater rate as compared to the products market. In absolute terms, the managed security services market was pegged at Rs 666 crore last year. Though at 46% growth it was down as compared to the previous year when the market grew by a rampaging 73%, it was good enough in a tough year.

The products market on the other hand, witnessed a growth of 36% over FY 08 to reach Rs 1304 crore. One big growth driver for both the services and the products market was the compliance and regulatory norms that most industries started strictly followingas it was seen to be most critical to secure data and information. There was also significant push provided by the new RBI guidelines for the banking sector. Rise in the number of network entry points (laptops, PCs, PDAs, Blackberry, and so on) and a surge in the mobile workforce were some other catalysts.

On the technology side, consolidation and convergence of technologies on to a single platform, virtualization, movement of data center on the cloud, were some trends that were marking a change in the security landscape. Telecom, government, defense, and BFSI were some of the key industries that were seen to be driving growth of the entire security market. On the services side, one saw more and more organizations moving towards system integration, monitoring, and management model; with consulting services providing the push. Manufacturing lay low while pharmaceutical was up a bit.

As per Frost and Sullivan, the security market in India primarily revolved around network security, content security, and managed security services.

Products and More
This was an interesting market in the last fiscal, with loads of developments right from product upgrades to acquisitions of niche players; a fresh approach of the leading players towards the market; and so on. The products slice, which in absolute terms was pegged at Rs 1,304 crore in the last fiscal, constituted 66% of the total Indian security market.

The security products market in India was basically divided into two partsnetwork security and the secure content management appliances (including the ubiquitous anti-virus solutions). While anti-virus or firewalls (part of network security) markets had already matured and even over-saturated as more and more organizations woke up to the security threats around them, the market was getting more competitive around newer products.

In the first half of the year, this market grew very well, the second half though was slightly slack in terms of major deals not breaking through and some getting postponed. This was more in the case of BFSI and ITeS sectors. However, big telcos beefing up their network security and value added services; Internet banking by most banks; a greater focus on e-governance; and state wide area network projects made the market look pretty exciting.

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