Security Analytics Market Size, Share & Industry Analysis, By Component (Solutions, and Services), By Application (Network Security Analytics, Web Security Analytics, Endpoint Security Analytics, and Application Security Analytics), By Vertical (BFSI, Government and Defense, IT and Telecommunication, Manufacturing, Healthcare, Energy and Utilities, and Others), and Regional Forecast, 2020-2027

The global security analytics market size was valued at USD 5.05 billion in 2019 and is projected to reach USD 28.55 billion by 2027, exhibiting a CAGR of 24.3% during the forecast period. The market share is expected to be dominated by North America, while Asia-Pacific is expected to experience significant growth. 

Cloud computing and the Internet of Things (IoT) are observed as significant market trends, while the outbreak of the novel coronavirus is expected to further drive the market growth. For instance, to eliminate the cyber-threats, the market players are offering advanced security services. For instance, in November 2019, IBM Corporation collaborated with TruSTAR Technology, an LLC based in San Francisco, California, to provide Enterprise Intelligent Management Solutions. At present, collectively these companies are offering X-Force IRIS COVID-19 threat intelligence enclave that incorporates X-Force IRIS intelligence. Such collaborations and partnerships among market players are likely to boost the adoption of analytics solutions. Furthermore, owing to the complete digital shift, there is an increasing need for industries to adopt robust security services, which are anticipated to supplement the revenue generation of analytics-driven security platforms.

MARKET TRENDS

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Increasing Reliance on Cloud Computing and IoT to Push the Market Forward

The proliferation of IoT, connected network devices, and cloud computing has created significant number of vulnerabilities and cyber-crimes. Decreasing cost of hardware, software, and other internet services incorporated with higher bandwidth capacities have enabled companies to deploy internet connections across the organization. As a result, companies have become more reliant on data centers and cloud computing for data storage. These trends have contributed to the rapid transformation of the security and threat intelligence services offered by companies.

Growing adoption of cloud computing, IoT, and the centralization of services have created a hyper-connective ecosystem, which has increased attackers' ability to expose the information through various channels. Also, analytics-driven security solutions would enable overcoming the challenges posed by security threats. As a result, increasing reliance on trending technologies such as cloud computing and IoT is expected to push the market towards higher growth.

Increasing Frequency and Severity of Data Breaches and Vulnerabilities to Drive the Penetration of Intelligent Threat Solutions                                                                    

In recent years, the severity and number of breaches have seen a higher growth trajectory. As the number of breaches and vulnerabilities are rising, businesses are facing a slowdown in their financial earnings. According to a report published by IBM Corporation, in 2018, the approximate average annual cost for businesses that face data breaches is about USD 3.86 million.

As a result, businesses are adopting threat analytics services to safeguard and secure the data and predict the risk of breaches to avoid undesirable circumstances. For instance, in January 2018, Splunk, Inc. announced that Daimler, a German automotive manufacturer, replaced its legacy solution SIEM with Splunk Enterprise Security (ES) solution. The company’s analytics solution for security helps the manufacturer to achieve security insights across the organization including manufacturing lines and vehicle systems.

MARKET DRIVERS

The Outbreak of Novel Coronavirus to Surge the Adoption of Security Analytics Solutions

Unethical hackers and other cybercriminals are likely to exploit the outspread of COVID-19 pandemic for illegal use. As a result, the United States Department of Homeland Security (DHS), United Kingdom's National Cybersecurity Center (NCSC), and Cybersecurity and Infrastructure Security Agency (CISA) have issued alert notifications to organizations regarding cyber thefts such as advanced persistent theft (APT) groups and other unethical hackers. Hence, many countries that have already deployed security systems are trying to make them more robust, while some of the developing regions are deploying the threat intelligence systems to avoid data breaches.

The surge in telecommuting has potentially increased the use of vulnerable devices and services such as virtual private networks (VPN), posing a threat to organizations. Online communication platforms such as Skype and Zoom have witnessed major spike in usage across several domains. Thus, the business processes are at risk from malicious activities such as phishing and ransomware attacks, among others, as they are more exposed to open platforms. These situations that have resulted from the outbreak of COVID-19 are influencing the market players to offer customized and robust analytics-driven security solutions to organizations.

Increasing Demand for Analytics-driven Platforms for Intelligent Threat Analysis to Drive Market Growth

Cyber security requires an intelligent and integrated analytics platform that can automate scanning and speed up the process of analyzing digital data and workload patterns. The analytics-driven platform empowers data scientists to derive meaningful insights, convert the data into intelligent statistics, and pre-detect the threat risks. Leveraging big data analytics, deep learning, Artificial Intelligence (AI), and edge analytics makes the intelligent statistics process more efficient. Integration of such advanced analytics technologies is likely to enable automated analysis of data. This would include data sources across several dimensions and generate deep insights such as proactive identification, risk factors, and user-behavior, among others. These factors ensure to drive the security analytics market growth in the coming years.

MARKET RESTRAINT

Shortage of Qualified IT Security Talent to Restrict Market Growth

At present, organizations mainly lack the expertise and manpower to properly configure and install sophisticated threat detection platforms due to the shortfall of skilled IT employees. Also, perplexity associated with the use of security platforms is likely to be a key market restraint. Similarly, lack of IT security budgets is expected to be a notable factor to inhibit market growth. However, organizations may overcome this restraint by leveraging third-party support or partnering with trusted advisors or other managed security service provider (MSSPs). This is likely to enable the enterprises to focus on effective cybersecurity instead of focusing on newly hired personnel and retaining them. Also, several companies invest a substantial amount in training and staff development. Skilled workforce would ensure to overcome this market restraint.

SEGMENTATION

By Component Analysis

Adoption of Security Analytics Solutions to Propel Market Growth

By component, the market is classified into solutions and services. Among these, the solution segment is expected to dominate the market share throughout the forecast period. The solutions offered by the market players include IBM Corporation’s QRadar, Cisco’s Rapid Threat Containment and Stealthwatch, and McAfee’s Mvision EDR endpoint threat detection. These solutions are being leveraged by businesses to gain visibility into future threats and detect suspicious activities based on real-world observations. The increasing adoption of these solutions by the end-users is likely to propel the market growth. However, the services segment is expected to witness moderate growth in the coming years.

By Solution Analysis

Increasing Demand for Cloud-based Solutions to Expand Market Size

The solution segment is further divided into the cloud and on-premise. Cloud-based security systems are estimated to witness a higher growth rate during the forecast period. The advent of disruptive technologies such as AI, big data, and IoT, among others has empowered the market players to offer cloud-based security management solutions. Cloud-based security management enables organizations to replace the on-premise security management infrastructure and reduce maintenance costs. Hence, businesses are likely to prefer cloud-based threat intelligence solutions. On-premise solutions are incorporated with the manual security operations. Manual security operations are inefficient to keep pace with the ever-changing business needs. Hence, organizations intend to integrate cloud solutions with the existing on-premise solutions.

By Services Analysis

Professional Services to Support Enterprises to Provide Enhanced Customer Experience

The service segment is further bifurcated into professional and managed services. Professional services are expected to hold a significant market share. These services are further categorized into consulting, training & education, and support & maintenance. Professional services are likely to thrive in a long-term relationship between businesses and customers. Offering professional services enables organizations to achieve customer-driven goals Managed security services are referred to as the remote monitoring delivered through shared services. These services are managed from security operations centers and are operated remotely and not through the on-site personnel. Managed services are expected to exhibit a significant CAGR during the forecast period.

By Application Analysis

Web Security Analytics Market to Hold a Significant Market Share

By application, the market has been classified into network security, web security, endpoint security, and application security analytics. It is estimated to hold a significant market share for web security, while application is anticipated to exhibit a higher growth rate.

Web security analytics is a central component of any web-based business. It deals specifically with the security services related to web applications, websites, and other web services such as application programming interface (API). These analytical solutions enable businesses to detect web security vulnerabilities such as data breach, cross-site request forgery, and SQL injection. These factors are driving the demand for analytics-driven web security solutions across organizations.

Similarly, application security refers to the process of developing, testing, and integrating security features within an application to thwart vulnerabilities such as unauthorized access and modifications in the application. As applications are becoming ubiquitous on various networks and connected to the cloud, there is a rising need to incentivize the security capabilities at the application level. Application security offers smart authentication, authorization, end-to-end encryption, and other application testing solutions. These factors are likely to contribute to the adoption of analytics-based application security solutions.

Further, network security analytics collects data from every channel of the extended network, including the encrypted traffic, to analyze the data and derive meaningful insights. For example, Cisco Systems, Inc. provides analytics integrated security network solutions that enable business networks to pre-detect and mitigate the risk of threats including ransomware and phishing attacks, emerging threats, and insider threats. Network security applications are likely to support the organizations to prevent and identify attacks, which is likely to supplement the growth of this market.

Endpoint security refers to securing end-user devices such as laptops, servers, or desktops connected to the enterprise network. These endpoints can be considered as the gateways for cyber-security threats and as a result, the endpoint devices need strong and robust protection. Such protection can be installed on an endpoint device or as a standalone application. For example, RSA Security LLC. offers RSA NetWitness endpoint solution that enables the enterprises to monitor every endpoint on and off the network.

By Vertical Analysis

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BFSI along with Government and Defense Sector to Account for Maximum Share

By vertical, the market has been classified into Banking, Financial Services, and Insurance (BFSI), government and defense, IT and telecommunication, manufacturing, healthcare, energy and utilities, and others. As industries such as BFSI, government, and defense drive digital transformations, they are likely to increase the use of web applications. The proliferation of web-applications has given rise to additional vulnerabilities and other such complexities. Demonetization and increasing use of online financial services have made the financial institutions a prime target for cyber-criminals.

For instance, the WannaCry ransomware cryptoworm attack in 2017 brutally hit the financial sector globally. According to the Reserve Bank of India (RBI), in the year 2017-18, on an average 2,059 cyber fraud cases were reported, amounting to USD 8.35 billion. This data illustrates that the financial services industry continues to be a lucrative target for unethical hackers and cyber-criminals. These types of cyber threats have led to the substantial adoption of security analytics among the BFSI as well as the government & defense sectors, resulting in maximum market share.

The manufacturing industry is mostly prone to malware attacks as manufacturers are shifting towards cloud infrastructure and services from the traditional on-premise infrastructure. The manufacturers are likely to face a significant threat regarding their confidential information such as investments in technology, industrial designs, blueprints of projects, and other operating parameters. As a result, they are likely to increase their spending on advanced security solutions. Thus, this industry is expected to witness a remarkable growth rate in the coming years. However, due to the closure of manufacturing plants and factories because of COVID 19 pandemic, the manufacturers are likely to postpone these developments.

Moreover, telecom companies operate and manage complex communication networks that are leveraged for voice and data transmission and hence store vast amounts of sensitive data. This makes the industry more prone to cyber-attacks. The IT and telecommunication industry is likely to witness a direct attack from cyber-criminals, intending to breach the organizational data and network operations. The adoption of analytics solutions for security can be attributed to the above-mentioned factors.

Apart from this, the healthcare industry continues to focus on offering advanced services to improve treatment and patient care. The adoption of advanced services is plagued by cyber-security-related issues. This sector is likely to experience considerable financial losses and breach of privacy. Distributed denial of service (DDoS) attacks is likely to pose a significant challenge for healthcare providers. Hence, healthcare providers must maintain a robust and efficient security system. Similarly, certain security concerns such as phishing attacks and ransomware, among others, will drive the adoption of analytics integrated security solutions across several industry verticals.

REGIONAL ANALYSIS

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North America to Lead the Global Market Throughout the Forecast Period

The market has been categorized into five major regions, namely, North America, Europe, Asia- Pacific, the Middle East and Africa, and Latin America. The regions are further divided into countries. North America is anticipated to dominate this market share, whereas Asia-Pacific is expected to witness a high growth rate.

North America is estimated to hold a major market share primarily due to substantial adoption and penetration of solutions in the U.S. and Canada. Rapid adoption of e-commerce, social media, and advanced technologies such as AI and IoT has widened the platform for cyber threats due to the generation of heaps of data. This, therefore, drives the need for advanced threat intelligence solutions across the region. The federal governments in the region are also taking initiatives to incentivize cyber-security investments across the region, which is likely to fuel the global market growth.

Asia-Pacific is expected to witness an exponential CAGR during the forecast period. According to a published by Palo Alto Networks, Inc. in 2017, Asia Pacific had a staggering 1.2 billion mobile phone and internet users. This data illustrates that digital services drive the need for cyber-security solutions to mitigate cyber threats in the digital era. Also, the rise of cloud services and bring your own device (BYOD) implementation have driven organizations to overcome the potential vulnerabilities by deploying efficient analytics solutions.

Cybersecurity is gaining strategic importance owing to the fast digitalization of several sectors such as health, energy, and transport, among others in the European Union (EU). With the implementation of the EU’s General Data Protection Regulation (GDPR), it is now binding upon companies in the region to report data breaches to the national data protection authorities. This will enable the companies to maintain a record of the breaching cases and adopt efficient and effective solutions to avoid them in the future. These factors are likely to drive the market growth across the region.

Growing use of social media, cloud, and mobile services is expected to drive the need for security services and technology across the Middle East and Africa. The region is expanding its information and technology services across several sectors. The increasing dependence on interconnectivity, advanced technologies such as IoT, and a growing number of endpoint devices paves the path for cyber-crimes. Being a developing region, the market is more prone to cyber threats. As a result, the region is likely to offer lucrative market opportunities in the near future.

Latin America is expected to witness a steady growth in the coming years. In 2018, there were considerable number of cyber-attacks reported by banks in Mexico and Chile. Lack of security for financial services in Latin America is likely to increase the cyber-threats from foreign criminals and local unethical hackers. As a result, with growing awareness about cybersecurity solutions, the financial industry in the region is projected to offer lucrative opportunities for analytics-based security technologies.

KEY INDUSTRY PLAYERS

IBM Corporation to Continue to Adopt Advanced Technologies to Drive Innovation     

IBM Corporation is a key player in the market. The company offers a comprehensive portfolio of security analytics solutions including Cloud Pak, QRadar Advisor, IBM zSecure, Security Resilient, and IBM Security i2. As a part of its business strategy, the company continues to integrate advanced technologies with the existing service offerings. This is likely to enhance the product portfolio of the company and boost revenue growth. For example,

• November 2019 – IBM Corporation announced the release of Cloud Pak solution for security. Cloud Pak platform can be connected to any security tool and can be deployed on cloud or on-premise. The platform includes open source technology for identifying threats and has efficient automation capabilities to speed up the response against cyber threats.


• November 2018 – IBM Corporation released new capabilities for QRadar Advisor, the company's security platform based on its Watson AI. The addition of new capabilities expands the software's knowledge of cyber-criminal behavior and enables it to be trained for various security response activities.


• October 2018 – IBM Corporation announced a cloud-based security platform called “Security Connect” for cyber-security applications. Security Connect is built upon open federated technologies, incorporated with AI capabilities. The platform analyzes security data across various environments.

Market Players to Enter into Strategic Partnerships and Acquisitions to Increase Market Share

The market is highly competitive and fragmented due to the presence of many established contenders and emerging market players. Hence, the market players continue to extend their product lines and enter into strategic partnerships to increase their market share and achieve the organizational goals. The key players in the market such as RSA Security LLC and Splunk Inc. continue to enter into strategic partnerships and acquisitions to increase their market share.

For instance, in September 2019, ThreatConnect, Inc. partnered with RSA Security LLC to offer the ThreatConnect platform, and threat intelligence platform. The new product will be named RSA NetWitness Orchestrator based on ThreatConnect.

Similarly, in April 2018 Splunk, Inc. acquired Phantom Cyber Corporation, a provider of security orchestration, automation and response (SOAR). The acquisition aims to provide efficiency in security operations centers (SOC), organizing workflows, enabling incident response, and automating tasks. Such partnerships and acquisitions are likely to empower the players to gain market share, ensure business expansion, and achieve good brand awareness in the market.

List of Key Companies Profiled:

• Broadcom, Inc.


• Cisco Systems, Inc.


• FireEye, Inc.


• Fortinet, Inc.


• Hewlett Packard Enterprise Development LP


• Huntsman Security


• IBM Corporation


• McAfee, LLC


• Rapid7, Inc.


• RSA Security LLC


• Splunk, Inc.

KEY INDUSTRY DEVELOPMENTS:

• February 2020 – RSA Security LLC released a new version of the RSA NetWitness Platform. The new version includes functional updates for automated response & network detection, threat intelligence, and user and entity behavior analytics.


• October 2019 – Splunk, Inc. announced advanced capabilities across its security operations product (suite) portfolio. Splunk Mission Control, the security operations suite offered by Splunk, enables the security analysts to draw actionable insights from the data by managing security across the entire threat lifecycle.

REPORT COVERAGE

An Infographic Representation of Security Analytics Market

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The security analytics market report highlights leading regions across the world to offer a better understanding of the market. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. It also examines various paradigm shifts associated with the transformation of software. The report further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.

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