Managed Security: A $4 Billion Opportunity?

I often hesitate to publish or quote from research reports, since the data often is designed to hype a market or drive sales of the report. A prime example: Yankee Group says managed security services generated $4 billion in revenue in 2006. Hmmm. What percentage of that revenue went to small managed service providers? And how much of it went to big players like VeriSign, Symantec, EDS, etc.? I don’t have the answer to those important questions. But perhaps the more important piece of Yankee’s research involves market growth. The company says managed security services revenue will grow 14 percent annually through 2010.

Plenty of VARs would love to generate double-digit annual revenue growth. But jumping into managed security services doesn’t guarantee success. Thousands of VARs are making a run at this market. And thousands will surely fail because they don’t understand service level agreements, pricing models, support strategies and other components of the MSP business model.