The top five players in the security software market last year accounted for just 44 percent of the global US$16.5 billion revenue, according to a Gartner study released Thursday, which revealed that the combined market share was a fall from 60 percent in 2006.
The top five vendors comprised Symantec, McAfee, Trend Micro, IBM and CA Technologies.
Market leader Symantec accounted for 18.9 percent of the global revenue, but this was a dip from 29.5 percent in 2006. McAfee ranked second at 10.4 percent, falling slightly from 12.3 percent in 2006, followed by Trend Micro which saw its share drop to 6.3 percent from 8.1 percent. IBM had 4.9 percent market share, down from 5.3 percent in 2006, and CA clocked in at 3.8 percent, compared to 5 percent in 2006.
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According to Gartner, while merger and acquisition (M&A) activities had been a constant factor, the market has yet to reach "a consolidated status", in which the top five players would account for more than 60 percent of the market. The research firm added that at the moment, any consolidation at the top portion of the market was contrasted by an expansion at the bottom.
"The information security market is in a continuous state of consolidation, but even fairly intense [M&A] activity has not stopped the market from being very fragmented," said Ruggero Contu, principal research analyst at Gartner, in a statement.
He explained that market expansion and innovation were driven partly due to new startup players entering the market, bringing innovative technology offerings that cater to end-user requirements.
These requirements were created as a result of threats often introduced by cybercriminals who took advantage of new vulnerabilities created by changes to the IT ecosystem, Contu said.
Young taking from big
This trend, according to Gartner, was driven by established market leaders losing market share to smaller players--mainly startups--which developed new offerings to meet newly introduced threats and vulnerabilities, implemented a successful go-to-market strategy, or built a niche presence for themselves that took market share away from the top-tier vendors.
And like other related market segments such as IT operations management, the security industry relies greatly on the innovation of startups--and this is particularly the case with the continuous influx of new vulnerabilities and threats.
Contu predicted there will be more consolidations and innovations as the security market continues to provide good growth opportunities for both established players and startups, and the landscape remains dynamic with various competitors.
He added that while end-users organizations showed a growing preference to purchase software suites provided by fewer suppliers, the complexity of enterprises' product portfolios would not be resolved in the short term.
"[As a result], new, standalone niche tools will continue to be purchased to solve new rising threats and vulnerabilities that incumbent players haven't been able to address," noted the Gartner analyst.