Managed Security Services Market - Forecast (2022 - 2027)

Managed Security Services Market Overview

The global Managed Security Services market size is forecast to reach $46.3 billion by 2027, growing at a CAGR of 10.8% from 2022 to 2027. Managed Security Services refer to network security services that are outsourced from a service provider to provide firewall management, endpoint security, unified threat management, managed encryption and many others. Emerging trends like Bring your own device (BYOD) and Work from home, governmental mandates or regulations for upgradation of organizational security standards, adoption of cloud services and others can be considered essential in driving the market growth forward. In addition, increasing demand for cost-efficient security services, gradual shift towards migrating workloads in cloud environments, alongside rise in number of security breach incidents have been potentially creating the demand for managed security services. Furthermore, growing adoptability of connected devices, increased cyberattack activities within BFSI & retail sector, significant need for early threat detection and risk assessments, and many others is also set to influence the growth of managed security services industry in the long run.

Managed Security Services Market Report Coverage

The report: “Managed Security Services Outlook – Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the Managed Security Services industry.

Key Takeaways

• Cloud Managed Security Services segment is anticipated to witness fastest growth with a CAGR of 12.5% from 2022 to 2027, due to rising adoption of cloud-based services within enterprises, and increased shift towards cloud data storage and management applications.
• Managed Security Services for BFSI industry is anticipated to grow with the highest CAGR of 11.4% during the forecast period 2022-2027, due to increased shift towards online banking services, and rise in security breach incidents within banks and financial institutions, and so on.
• North America Managed Security Services market dominated with a share of 39% in 2021, owing to rising investment on IT infrastructural security, and increased dependency on cloud applications.
• Increased adoption of connected devices with rise in malware attacks, IoT security constraints, and so on along with growing rate of cybercrimes across varied industry verticals is analyzed to significantly drive the global Managed Security Services market during 2022-2027.

Managed Security Services Market Segment Analysis- By Deployment Model

Based on deployment model, Cloud segment is analyzed to grow with the highest CAGR of 12.5% in the global managed security services market during the forecast period 2022-2027. This market growth will be attributed to varied factors such as growing adoption of cloud-based services within enterprises, increased cloud deployment for data storage and management applications, and significant workload shift towards public or private cloud environments. Cloud deployed managed security services have been gaining wide popularity, due to several capabilities like reduced dependency on human intervention, real-time monitoring, faster threat identification, improved data protection and so on. According to Flexera 2022 State of the Cloud Report, about 59% of organizations will optimize its existing use of cloud, followed by 57% on workload migration to cloud and 42% moving from on prem software to SaaS. Deployment of cloud security services serve as a cost-effective approach in comparison to on premise, through automated updates, pricing flexibility with annual/monthly subscriptions, higher security, eliminating additional IT infrastructure requirement and so on, which in turn is driving its market growth overtime. Moreover, growing shift towards big data analytics, technological advancements like IoT implementation across end use industries, increased dependency on cloud computing and many others have been also raising the demand for cloud managed security services. In March 2021, IBM Security announced about its enhanced services in order to help organizations towards managing their cloud security strategy, policies as well as controls across hybrid cloud environments. Rollout of these services was done to bring together cloud-native, third-party technologies with IBM expertise to help organizations in creating a unified security approach across cloud ecosystems. Furthermore, rising utilization of cloud servers and applications within enterprises, gradual shift towards work from home and bring your own device (BYOD) trends alongside growth in cloud security breach incidents, can also be considered vital in accelerating the market growth in the coming time.

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Managed Security Services Market Segment Analysis- By End Users

Banking, Financial Services & Insurance (BFSI) sector is analyzed to witness the fastest growth with a CAGR of 11.4% in the global managed security services market during 2022-2027. Rising number of security breach incidents within banks and financial institutions, significant demand towards security solutions for data protection, increasing shift towards online banking services and so on can be considered as some of the prime factors impacting the market growth. Since this sector makes use of sensitive data, maintaining its confidentiality and overall security becomes highly essential, contributing to the adoption of managed security services. Adoption of managed security services within BFSI vertical have been gaining wide popularity owing to its 24/7 real-time monitoring benefit which ensures early identification an prevention of security threats. According to VMware’s 2022 report titled “Modern Bank Heists 5.0”, about 63% of financial institutions have experienced an increase in destructive attacks, compared to only 17% from previous year. Additionally, government emphasis on improving cyber security management for banking sector, increased spending on IT security by finiancial firms, rise in ransomware attacks, significant shift of IT workalods in cloud and growth in digital banking amidst the Covid-19 pandemic, have been propelling the market demand for managed security services overtime. In April 2022, UiPath announced about the launch of its Automation as a Service offering on Finastra cloud, intended to provide a managed service model to Finastra’s thousands of banks, credit union, as well as financial institution customers. With this offering, the company will design, install, deploy, run as well as maintain automated processes in order to enable the banking sector leverage the power of automation along with security and compliance of cloud-based infrastructure from Finastra. These factors are set to accelerate the market growth of managed security services within BFSI industry in the long run.

Managed Security Services Market Segment Analysis- By Geography

North America region accounted for the largest share of around 39% in the global Managed Security Services market in 2021, owing to factors like rising investment on IT infrastructural security, increased dependency on cloud based applications and services as well as growth of data breach inclidents across industries. High investments on R&D activities from key market players like IBM, AT&T and Verizon, rise in cybercriminal activities, growing penetration of digital banking, and so on have been also impacting its market growth overtime across the region. According to Identity Theft Research Center (ITRC), a record number of data compromises were reported within U.S., amounting to 68% rise in 2021, compared to the previous year. In November 2021, IBM Security announced about gaining Nozomi Networks MSSP Elite Partner certification, in order to strengthen its managed security services offering with Nozomi Networks industry-leading solutions and expertise for OT as well as industrial IoT cybersecurity. Furthermore, increased security breach incidents within banks or financial institutions, growing exploitation of retail & e-commerce websites, rise in identity thefts, and so on will also be catering to the growth of managed security services in the North American markets.

Managed Security Services Market Drivers

Rising rate of cybercrimes across varied industry verticals is potentially driving the need for threat identification, data protection, risk assessment and others:

Rise in rate of cybercrimes across varied industry verticals act as one of the major drivers boosting the market growth of managed security services. This significantly drives the need for solutions capable of serving application areas including threat identification, data protection, risk assessment and others, which in turn raises the demand for managed security services across organizations. Cybercrimes ranging from data hacking, ransomware attacks, network intrusion, identity thefts, credit card frauds and so on, have been significantly growing, creating need for 24/7 monitoring, thus improving organizational security standards. Cybersecurity managed services help firms in improving governance of security management, strengthen security processes with continuous risk identification or mitigation, increase profitability, maintain company’s market reputation, and many more, thereby gaining it wide popularity in the end use markets overtime. Growing cyberattacks within retail & e-commerce businesses, increased adoption of WFH and BYOD policies amidst the pandemic, rising digital or online frauds and so on, have been positively impacting the market growth of managed security services in order to combat cybercrimes. According to SonicWall’s Cyber Threat report, the cyberattacks and IT security threats surged in 2021, compared to 2020. This report revealed that more than 625 million digital assaults took place throughout the year 2021, which was more than double of the cases in the previous year. In August 2021, a telecom firm, T-Mobile had revealed about suffering a cybersecurity breach which led to data of around 50 million existing users and prospects being stolen. This security breach included high confidential data like customer addresses, social security numbers and driving license details. Such instances can be considered vital in influencing the need for managed security services owing to rising cybercrimes in the long run.

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Increased adoption of connected devices contributes to rising malware attacks, IoT security constraints, and so on, which drives the market growth for managed security services:

Increased adoption of connected devices drives the demand for managed security services prior to rise in malware attacks, IoT security constraints, and so on, thereby creating a positive impact on its market growth. Due to shift towards digital transformation and automating workloads within varied industries, the manufacturers have started focusing on higher utilization of connected devices to improve work productivity and flexibility standards. Since majority of industries have been shifting towards IoT based connected devices, the need to leverage solutions to mitigate its security constraints, be it malwares, cyber security risks, data protection, and many other vulnerabilities. In addition, lack of computational capacity for built-in security of IoT devices, prone to infected by malwares, device mismanagement, online exposures and many more, is eventually driving the managed security services market growth forward. In February 2020, InsightCyber Group announced about the launch of a managed Internet of Things (IoT) security services suite for MSSPs and many other value-added partners. This development was meant to provide services including threat scanning, cyber risk assessments, visibility and threat monitoring, security operations monitoring and so on for the industrial customers. As per Ericsson, it is predicted that around 29 billion of devices will be connected globally by the year 2022. Such factors are set to accelerate the market growth for managed security services, due to rising adoption of connected devices.

Managed Security Services Market Challenges

Limited adoption of managed security services offered by third party service providers due to lack of trust from the end use customers hinders its market growth:

Limited adoption of managed security services offered by third party service providers due to lack of trust from the end use customers can be considered as one of the major factors restraining the market growth. Various small-scale businesses or enterprises having limited availability of in-house security expertise or with budgetary constraints, generally rely on third party service providers for maintaining its business operations. Before outsourcing security operations to a third-party, it becomes highly essential for the end use customers to check infrastructure security of its service providers, and also about the updated cybersecurity tools being utilised. Adoption of managed security service providers gives complete control over the organizational data, which on getting affected by security breach or potential vulnerabilities, can adversely impact its business reputation. In May 2021, SecureLink and Ponemon Institute released a report titled “A Crisis in Third-party Remote Access Security”, which revealed about the alarming disconnect between an organization’s perceived third-party access threat and its security measures. In accordance to this, over half of respondents (51%), said that organizations are not assessing security as well as privacy practices of all third-parties before granting access to their sensitive or confidential information. These factors can eventually create an adverse impact on its market growth owing to lack of trust from end users with policy violations and rising cyberthreats.

Managed Security Services Market Landscape

Product launches, acquisitions and R&D activities are key strategies adopted by players in the Managed Security Services market. The Managed Security Services market top 10 companies include:

1. IBM Corporation
2. AT&T Inc.
3. ATOS
4. Secureworks Inc.
5. Trustwave Holdings
6. Verizon
7. Fortinet
8. DXC Technology
9. BT Group plc
10. BAE Systems

• In November 2021, AT&T Cybersecurity announced about the launch of a managed security service, named Government Trusted Internet, which have been designed to help U.S. federal agencies towards IT infrastructure protection from prying eyes. This development was done after the U.S government’s order stating the need for federal agencies to modernize their IT infrastructures, ensuring protection from current as well as emerging cyber threats.
• September 2021, ATOS and Intigrit announced about its collaboration in order to launch end-to-end bug bounty service, for offering vulnerability detection as well as remediation service to its customers. With this, ATOS intended to extend its expertise in vulnerability testing services for public as well as private markets worldwide.
• In August 2021, one of the leading managed security service providers, Trustwave announced about the launch of its first-of-its-kind cyber supply chain risk assessment solution, designed for enterprises as well as SMBs within the Pacific region. This service named Managed Vendor Risk Assessment (MVRA), was introduced to provide organization access to deep and fully scalable cybersecurity vendor assessments, which were formerly prohibitively expensive.