Managed security service market revenue increased 9 percent to $17.4 billion in 2015, according to IHS Inc.
The size of the managed security service market is forecast to grow by one‑third over the next five years.
Customer-premises-equipment- (CPE-) based services 54 percent of security service revenue, while the balance 46 percent came from cloud-based offerings in 2015. The ratio between CPE and cloud-based offerings is expected to reverse by 2020, according to IHS Inc.
The report said managed security providers are leveraging software-defined networking (SDN) and network functions virtualization (NFV) rollouts, to scale delivery of managed security services. With the advent of virtual CPE solutions, many providers expect managed CPE-based service revenue to continue growing as well.
“SDN deployments in cloud and hosting environments will help providers build more scalable, flexible and profitable hosted and cloud security services,” said Jeff Wilson, cybersecurity research director for IHS Technology.
“The new generation of virtual CPE services driven by NFV will enable carriers to deliver services to the customer edge on a common hardware platform capable of running virtual machines,” said Wilson.
Sales of cloud-based security services grew 12 percent in 2015.
IHS forecasts that cloud-based security services is expected to grow at a compound annual growth rate (CAGR) of 9 percent over the five years from 2015 to 2020.
The report said the largest contributor to cloud-based security service revenue is content security, followed by managed firewall services, other security services, distributed denial of service (DDoS) mitigation, and intrusion detection and prevention systems.