MEA security spending to increase by 20.3% in 2008

Spending on security software will reach $157.7 million for the Middle East and Africa region (MEA) in 2008, up from $131.1 million last year, according to Gartner.

The analyst firm is projecting a compound annual growth rate (CAGR) of 11.3% up to 2012 for the region, putting security spending at $224 million that year.

"In MEA, there are a variety of reasons that are pushing this spending up," principal research analyst Ruggero Contu said. "Looking at the region overall, it's more of an up-and-coming market so there is a lower level, generally speaking, of adoption of technology and more opportunities with greenfield projects and new investments, which Western Europe, for example, doesn't provide.

"We also have a general economic background situation that is much different from, again Western Europe, where the pricing of commodity goods like oil for example, which is very important for the Gulf states, and mineral goods and so on is pushing up the economy of many of the countries that are a part of MEA. Obviously this means that there is, generally speaking, more money, more liquidity and more purchasing power for these organisations," he added.

Worldwide, security software revenue is expected to reach $10.5 billion this year, an increase of 11.2% from 2007 and $13.1 billion by 2012. According to Gartner, growing awareness of the damage caused by security breaches, together with the increasing demand for a more mobile and remote workforce, will keep the worldwide market for security software buoyant. For IT managers, investment in security is more readily justified because the consequences of breaches and failures can be dire for the company.

The analyst firm also asserts that compliance to regulations such as the Sarbanes-Oxley Act (SOX), which introduced major changes to the regulation of financial practice and corporate governance in the US, continues to play a significant role in security spending decisions.

"In America, compliance has really become a paramount factor," Contu said, "For MEA, we need to say which area we're looking at and which organisations. If we look at Saudi Arabia, for example, or other Gulf states like Kuwait and UAE, you see that some organisations, particularly those that have international reach and have business dealings internationally like Emirates Airlines or Saudi Aramco, are likely to be more concerned with compliance and spend more on compliance."

Gartner also foresees that the security software market will be influenced by the rise of security as a service (SAAS), particularly in the anti-virus and email security areas. The arrival on the market of SAAS solutions from big players such as Google will push prices down and thereby affect overall revenue growth.

"Security as a service is already a part of the evolution of the market and is already an area that is impacting the market. A number of vendors are doing well here. We're likely to see this type of delivery of security receiving a positive uptake and being pretty positive in terms of growth in the next few years," Contu said.

"Overall it is definitely an area that is set to disrupt the market and we see those vendors that are able to leverage this type of delivery are set to benefit from it. Talking to a number of players in the security software market, those vendors coming from a more traditional type of software delivery are seeing SAAS outpacing the revenue growth significantly when compared to the traditional type of software delivery," he concluded.