Authentication, Digital Rights to Lead Security Software Market

Worldwide revenue in the Internet security software market will jump from less than $4 billion in 1999 to more than $11 billion in 2004, according to research by International Data Corp. (IDC).

“The ability to use security technologies to enable greater access to corporate content deepens and stabilizes relationships,” said Brian Burke, an analyst with IDC’s Internet Security program. “These trusted relationships yield numerous benefits, including, most importantly, increased revenue and profitability.”

The success of e-commerce activities and the growth in use of virtual computing architectures are obvious in North America and Western Europe. In 1999, these two regions made up 84 percent of all Internet security sales. North America produced nearly two-thirds of all Internet security software sales.

The biggest opportunity in the market rests with security authentications, authorization, and administration (3A) software. In 1999, this segment, was the largest part of the overall market with $2.1 billion in revenue. In addition to being the largest segment, this market will grow faster than any other. Its revenue will increase at a compound annual growth rate (CAGR) of 28 percent from 1999 to 2004. By comparison, the next-nearest segments — firewall and antivirus — will increase at CAGR of 17 percent.

The success of e-commerce activities and the growth in use of virtual computing architectures are obvious in North America and Western Europe. In 1999, these two regions made up 84 percent of all Internet security sales. North America produced nearly two-thirds of all Internet security software sales.

According to research by the Gartner Group, Inc., by 2002 more than 60 percent of enterprises adopting e-commerce will use some content security tools or services, such as digital rights management (DRM).

Enterprise strategies are promoting DRM because they want applications focused on a single secure content solution. DRM provides for the persistent protection of digital information over an intranet, extranet, or on the Internet. Users are granted only the privileges the media sender allows.

DRM technologies are targeting the music and book industries first as they migrate from traditional distribution of physical media to new, networked, online methods of selling electronic content. DRM offers publishers the ability to control and protect the distribution of their content, and thereby maintain their revenue associated with that content.

“Until the advent of DRM technology, many content distributors viewed the Web as only offering what they most feared: uncontrolled access to valuable content,” said Alan Weintraub, Gartner’s research director. “With DRM technology, the Web becomes a channel that allows all types of electronic content to be distributed and protected in a controlled manner.”

DRM applications will have significant effects on the business-to-business (B2B) as well as the business-to-consumer (B2C) markets, Gartner Group found. In the B2C area, the challenges will be centered on money and standards. The B2B area will likely recognize the need for protecting their intellectual property but will be challenged with questions focused around infrastructure and spending.

“While determining if they need a DRM strategy, Internet retailers will be faced with questions regarding consumers’ acceptance of the need to charge for electronic content and how much the consumer will be willing pay,” Weintraub said. “B2B companies will have their own challenges, such as determining if their organization has the infrastructure to support DRM and even recognizing the need to implement a DRM strategy.”

According to the report “The Internet, Security, and You,” from CarbonMedia, 32 percent of the respondents to the “Internet Security IQ Test” do not protect their company’s intellectual property. As for more basic Internet security measures, 50 percent of the respondents rarely change their passwords and 46 percent do not use email encryption when sending sensitive information.

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