Cloud is a big business today, and it's only going to keep growing.
Forrester estimates that global cloud services revenues totaled $114 billion in 2016, up from $68 billion just two years ago -- or annual growth of 30 percent. With the public cloud services market expected to reach $236 billion by 2020, what does this mean for cloud security?
This rapid shift to the cloud raises new issues and challenges for security and risk professionals. Traditional perimeter-based security tools do little to protect cloud workloads. Securing data and applications that reside in the cloud is increasingly critical as more mission-critical apps, high-value data, and intellectual property move to the cloud.
Cloud security solutions are quickly evolving to meet these challenges. Forrester's newly published cloud security solutions forecast shows that we expect spending on global cloud security solutions to reach $3.5 billion by 2021 -- an annual growth rate of 28 percent over the next five years. In the forecast, we examine four types of cloud security solutions: Cloud security gateways; centralized cloud security management; hypervisor security; and native infrastructure-as-a-service/platform-as-a-service security.
Cloud security spending is growing rapidly and attracting vendor attention. Forrester estimated that total global spending on security software was $24 billion in 2016 and will grow 10 percent annually in 2017 and 2018. While spending on cloud security solutions is relatively small today compared with total spending on security software, its rapid growth is attracting the attention of more traditional security tech vendors. Larger tech vendors are quickly entering and consolidating the space via acquisitions. BlueCoat acquired both Perspecsys and Elastica in 2015 before being acquired by Symantec in 2016. HPE acquired Voltage in early 2015. Microsoft acquired Adallom for a reported $320 million in September 2015. Cisco acquired CloudLock in August 2016 for $293 million. Oracle acquired Palerra in September 2016. These well-funded new entrants will help drive growth by incorporating cloud security solutions into their overall product offering.
While businesses are increasingly embracing the cloud across several practices, security risks will also increase -- as will spending -- to minimize these risks. As businesses become more vulnerable and security solutions become more innovative, we are going to see their value skyrocket, because technology leaders will realize the impact they will have on their business.
By Jennifer Adams, senior forecast analyst at Forrester