SMB Content Security Spend Still Up For Grabs

By Ericka Chickowski 1

In spite of continued growth in security spend amongst SMBs, it’s still very much a Greenfield opportunity for managed service providers (MSPs) that can break through perception barriers. A recent study by analysts with Canalys shows that year-over-year growth in worldwide content security increased by an appreciable amount, but that small businesses still don’t understand that they’re as much in the crosshairs for attacks as large enterprises.

Defined by Canalys as the combination of anti-malware, DLP, encryption, messaging security and web threat security, content security increased by 9.6 percent in 2014, according to the analysts. In the United States, spending in the category totaled $2.6 billion and made up 28 percent of the overall market.

That’s up a tick compared to 2013, when it was at 27 percent. Considering Gartner’s estimates of just 2.1 growth in overall global IT spending last year, the nearly 10 percent annual clip for the category offers evidence that it is a good candidate for partners to home in on. What’s more, Canalys believes that it isn’t nearly where it should be in order to assure SMB’s effective protection from attack.

“While many small businesses have increased their spending, the overall state of protection remains below an effective level,” said Nushin Vaiani, senior analyst for Canalys. “Some small businesses remain convinced that only those large enterprises they see in highly publicized news articles are the targets of cyber-threats.”

Demand growing in the SMB market

Vaiani’s assessment is corroborated by evidence across the security industry. For example, a study last fall from CSID found that 31 percent of SMBs don’t take any active measures to protect against security threats. However, progress is being made. A study by Software Advice found that 65 percent of SMB decision-makers are now more concerned about cybercrime than they were a year ago. This gradually increase of awareness is heating up competition in the market, according to Canalys.

Major security vendors and the SMB market

Analysts with the firm say that Trend Micro retained its lead in the SMB market, with a simple and flexible pricing model that they say has received good reviews from customers and channel partners. Nevertheless, increased competition from rivals kept growth flat at the vendor.

Meanwhile, second-place Symantec was also flat and Canalys warned that the split of the company at the end of last year may affect its ability to focus on SMB security customers. Meanwhile, Intel Security was the only vendor in the top three that did grow—up by 2 percent last year, attributable to better marketing campaigns, an online store and increased channel promotions. Meanwhile, Kaspersky Lab regressed from its strong growth in 2013 with a 4.2 percent dip. Other players growing in the market, particularly through cloud security solutions, included Websense and Sophos.

The managed services play

“As content security offerings become more complex, small businesses will look to their trusted channel partners for advice on which solutions will offer the best protection and scalability in the long run,’ said Karissa Chua, research analyst for the firm. “In the US, there will be a major shift to hosted security services, and by the end of the year these will account for about 35 percent of total content security investment by small businesses.”

Worldwide content security spend by small businesses increased 9.6 percent in 2014 according to the latest market estimates by Canalys. The $2.6 billion market now represents 28 percent of the total enterprise content security market, compared with 27 percent in 2013.