Security software market remains fragmented: Gartner

Top five vendors command no more than 44% of security software market.

The top five security software vendors have failed to achieve consolidation of the security software market, according to a recent Gartner report. Market consolidation is said to have been achieved when 60-70% of the market is under the control of the top five vendors. The top five security software vendors,  Symantec, McAfee, Trend Micro, IBM and CA, commanded only 44% of the $16.5 billion worldwide security software market in 2010, down from 60% in 2006 (See table: Security software market stats).

Despite intense merger and acquisition (M&A) activity in the recent past, fresh start-ups continue to gain footholds in the security software market with products that respond to newly discovered threats and vulnerabilities, or through effective marketing strategies. As IT systems evolve, new security vulnerabilities continue to be discovered and exploited.  This makes the security software industry much more dependent on innovation from start-up companies, similar to related industries such as IT operations management.

“We expect more consolidation to take place place, along with innovations being introduced by new additions to the market. The security software market continues to provide good growth opportunities for both established players and start-up companies, and the market landscape remains fairly dynamic with many competitors,” says Ruggero Contu, principal research analyst at Gartner. “While end-user organizations have shown an increasing preference to use a suite of products from fewer suppliers, the complexity of end users’ product portfolios will not be solved in the short term because new, stand-alone niche tools will continue to be purchased to solve new rising threats and vulnerabilities that incumbent players haven’t been able to address.”

Security software market stats:

Vendor Security software
market share (%) in 2006
Vendor Security software
market share (%) in 2010
Symantec 29.5 Symantec 18.9
McAfee 12.3 McAfee 10.4
Trend Micro 8.1 Trend Micro 6.3
IBM 5.3 IBM 4.9
CA 5.0 CA 3.8
Total 60.0 Total 44.3

Source: Gartner (July 2011)

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