IDC: WORLDWIDE IT security spending will reach $174.7 billion - with government and telecommunications industry benefiting

A dispersed workforce, and ongoing tasks of working from home, has developed charters of enterprise INFORMATION technology (IT) organizations. CIOs are now tasked with supporting flexible work arrangements that require them to reconsider previous assumptions about ensuring the combined infrastructure allows employees to perform work remotely.

Corporate spending on IT security products and services has grown newly by 2020, as more organizations invest in solutions to meet the needs of a much larger remote workforce and a range of online security threats create additional requirements.
According to the latest Global Market Research by International Data Corporation (IDC), worldwide spending on security-related hardware, software, and services will be $125.2 billion by 2020 – a 6% increase over 2019.

Developing its security market
As the global economy recovers from the impact of COVID-19, IDC expects worldwide security spending to reach $174.7 billion by 2024 with a compound annual growth rate (CAGR) of 8.1% during the forecast period 2020-2024. While IT spending is declining somewhat across most industries after the global epidemic, the demand for IT security remains strong, particularly in areas including state or local governments, telecommunications, and federal or central government that have become essential service providers.

Indeed, these three sectors will show a two-figure growth in IT security spending until 2024. Meanwhile, banks, manufacturing, and professional services continue to have the largest proportion of IT security spending. There is even some growth in IT security for currently struggling industries, such as retail and transportation.

The three sectors with the largest IT security investments (banks, discrete manufacturing, and the federal or central government) will account for about 30% of total spending by 2020 and throughout the forecast period.

The sectors with the most increase in IT security spending by 2020 are the federal or central government (10%), state or local governments (8.9%), and telecommunications (8.5%). The three sectors will also bring a single two-figure CAGR during the five-year forecast period, led by state or local governments with an 11.1% CAGR.

IT security services will be the largest and fastest-growing segment of the global IT security market, accounting for about half of total spending during forecasts and a 5-year CAGR of 10.5%.

Managed security services - solutions for a tenant operated by third-party providers and residing on a customer's premises (customer premises equipment) - are the largest spending category of IT security services, followed by integrated services and consulting services. Managed security services will also be the fastest-growing segment with a CAGR of 13.6% in five years.
"The complexity there is a lot with deploying and expanding security technologies that require assessment and design services," said Christina Richmond, vice president of IDC. While COVID-19 has had a negative impact on many ICT technologies, security services have seen an increase in engagement, particularly in outsourced services such as managed security services (MSS) and managed detection and feedback (MDR)."

According to IDC, the software will be the second largest segment of the IT security market, led by end-point security and security analysis, intelligence, feedback, and coordination software.
Spending on hardware will be dominated by cybersecurity needs - including firewalls, intrusion detection and prevention, unified threat management, and virtual private networks. Both product segments are expected to recover in 2021 with an annual growth rate of 9.6% for hardware and 4.4% for software.

Large and very large businesses will be responsible for two-thirds of total IT security-related spending by 2020 and throughout the forecast period. These two segments will also have the strongest spending growth with a five-year CAGR of 9.3% for large enterprises and 8.6% for very large enterprises. Small and medium-sized businesses will spend more than $30 billion on IT security solutions this year.

Global IT security investment growth prospects
From a geographical perspective, IDC analysts forecast that the United States will be the largest market for IT security solutions with a forecast spend of $56.4 billion by 2020. The four industries - discrete manufacturing, the federal government, banking, and professional services - will account for more than $20 billion of the total U.S. market.
China and the UK are the next biggest national markets with SPENDING on IT security expected to reach $7.9 billion and $7.6 billion this year. Telecommunications and state or local governments will be the sectors with the largest IT security spending in China while banking and discrete manufacturing will be the leading sectors in the UK market.
Partly due to global economic uncertainty, I anticipate that the company's IT budget will be revised to meet changing priorities in the coming months. That said, investments in IT technology that facilitate strategic digital transformation projects will remain a top priority for many organizations. IT security will be an important component of these ongoing projects.