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Even though the year 2006 started out on a somber note for the network security market (Firewall/IP SEC VPN, SSL VPN, IDS/IPS) in India as it tumbled for two consecutive years (21.4 percent down in Q1 2006 and a marginal 0.2 percent in Q2 2006) after three quarters of high spending (as per the Frost & Sullivan report), there is still no doubting the fact that security continues to be the buzzword among Indian enterprises. Riding on the back of network infrastructure expansion coupled with the growing demand for adherence to regulatory compliance, growing investments into network security will boost the market over the next few quarters.

With growing traction towards Unified Threat Management (UTM), which is emerging as one of the hottest segments within the security market, the internal dynamics of the network security space is in for some marked transformation. Bundling most components of the network security space in a single appliance, whether UTM ends up becoming a part of the network security space or ends up posing a threat to it, will drive the dynamics within the network security market.

As per Frost & Sullivan, the market totaled $19.6 million in Q1 2006, down from $24.9 million in Q4 2005. This was in line with the downturn in the annual spending cycle. Another reason for the decline was due to product revamps done by several vendors, wherein they released more product lines, resulting in more competition in the market, pressing down prices and profit margins. On the other hand, Q2 being the first quarter of the fiscal year in India most enterprises were planning their IT budgets in the quarter. However, Frost & Sullivan sees positive growth for the segment over the third quarter of 2006 with some major deals expected in the BFSI, telecom and IT/ITeS verticals. According to Uday Birje, Country Manager and VP-India and ASEAN, NetDevices Networks India, network infrastructure deployment in banking, finance, e-governance and telecom sector is one major driving factor for the growth of network security. On-line financial transactions in banks, stock-exchanges, e-commerce segments have changed the security landscape to increase the deployment of secure infrastructure by enterprise and service provider organizations. With high spending on network security especially among Indian banks, BFSI continues to be the lead driving force. Other sectors including manufacturing, government, transportation, healthcare and IT/ITeS are also witnessing an increased uptake with their spending on security expected to increase over the next two years.

With the expanding infrastructure and impending build-up of capabilities for managed security services, spending from service providers is also expected to continue in the forthcoming quarters. The growing demand for managed security services will have a resultant effect on further increasing business from service providers.

Meanwhile, the SMB brigade is also catching on. While in the past large enterprises have been driving the network security market, contributing significantly to overall spending, the market is now seeing growing traction from the small and medium businesses. The spend contribution from large enterprises is expected to decrease in the future as the SMB market will experience tremendous growth. Considering the fact that product penetration has been limited in the SMB segment, it provides huge growth potential for security vendors. The investment that enterprises are making in security is being reflected in the growth of security solutions in India," said Mohammed Hayath, Manager, National Business Development- India (Network Security), Cisco Systems.

In India, enterprises are getting well connected. Having private network and centralized set-up is no longer limited to large enterprises. Also, more and more organizations are getting connected to the world-partners, suppliers, consumers.

Also, with the rise in e-commerce, India is witnessing serious business happening over the net. In the last two-three years, India has seen a very fast adoption of Internet-based online transactions in all areas, led by banks of all sizes and now the government departments. This has enabled the growth in investment in security. Globalization of Indian enterprises has necessitated various regulatory compliances, which in turn has created a momentum in network security.

"Latest trends are integrated security, evolving intrusion detection systems and SSL VPNs" -Niraj Kaushik Country Manager, Trend Micro-India and SAARC

According to Dhiren Savla, CIO, Kuoni Travel (India), all this comes with its own set of challenges-more internal and external threats. "Few years back, perception of network security was putting one firewall. Today, some of the progressive organizations clearly define the role of the CSO, as any security breach can affect clients, business and brand," he explained.

In fact, network security is going to be the prime concern of the CIO and CSO in the coming years. According to Radhakrishna Pillai, Head-Team IT, SRL Ranbaxy, the Internet population is growing very fast in India. This coupled with the large amount of business predicted to happen through
e-commerce itself shows that network security is going to be the focus in the next couple of years. The mobile computing initiatives of enterprise as well as outsourcing work to India will also contribute to its growth.

As per an industry estimate, around 60 percent of the global workforce in enterprises is located at the company branch offices. However, with increased applications and services required at the branch office and the use of public telecom infrastructure like VPNs, MPLS WiMAX etc, the need for network security has been significantly enhanced.

According to Hayath, one of the key highlights in the network security space is the move to an architecture-based approach that will concentrate on existing infrastructure devices with embedded security solutions or 'integrated security'; security and networking devices that have native network intelligence and collaborate with each other to take appropriate action or collaborative security; security and networking devices that adapt themselves to mitigate internal and external threats or adaptive security.

Vishal Dhupar, MD, Symantec India too concurs that integrated appliances is the emerging trend. These are complete solutions that incorporate core security functions into a single solution to effectively prevent security breaches of the network. The integrated security functions can be managed from a single management console included with the appliance. By using this management console, administrators can manage local and remote appliances over the Internet including advanced configurations, rule sets and cluster parameters. This is a very cost-effective way of network protection from a single security expert.

According to Birje, overall, the security market is going to be driven by next generation security devices like 'Secure Services Gateways'. The new class of networking devices that are emerging known as 'Services Gateways', combine the functionality of networking infrastructure devices like routing, switching and security applications like VPN, firewall, anti-virus, IDS/IPS, content filtering etc onto a single platform. Services gateways not only reduce the capital expenditure for deploying secure networks, they also significantly reduce operating expenditure for CIOs.

Also, processes, controls and audit-worthiness are common requirements across a spectrum of regulations. SSL VPN directly supports these requirements and therefore is becoming a popular tool in the compliance implementation.

Kaushik felt, "An issue that most corporates need to understand is that security doesn't only include hardware, software, and services. It is also about process, and needs to be treated as such. Enterprises, while planning their Internet/e-business infrastructure, need to consider a policy-based, network-based comprehensive security policy. This is important, especially in light of the fact that perhaps the most serious impact of a security lapse is the less of business opportunity, both in terms of customers as well as revenue."

Shipra Arora

Source: The DQweek