J’son & Partners Consulting presents short results of the research: Russian Information Security Market, Results of 2014, Forecast till 2018.
Russian Information Security (IS) Market Volume and Tendencies
According to J’son & Partners Consulting’s estimations, volume of Russian Market of Services in the sphere of IS increased in nominal (RUB) value per 13% till 51 bln.RUB that is a little bit higher than nominal IT market growth rates in Russia, which, according to GKS.ru data, had been around 10%. As a result, market of methods and services in IS sphere has around 7% in the totaёl volume of Russian IT market. As for the IT market in general, positive dynamics of Russian IS market in 2014 was due to the ruble’s depreciation and increasing prices on IS imported equipment, which became obvious in 4Q2014. Such situation was observed for the first time since 2009.
In comparable prices, IS Market in Russia showed close to zero growth in 2014, while main effect from currency depreciation, increasing prices on IS products will be best seen in 2015, and it will result in Russian IS market decrease in comparable prices.
In any case, due to stagnation of IS market development, there is a certain increasing threats for IS due to its transit on new quality level that is proved by key market players’ data.
«We mark the transition of cyber crimes on a new quality level, it means that shadow market of cyber criminality is transforming into a well-functioning industry, which fully repeats laws of general world: the development, support, return of funds in case not satisfaction with purchased goods, lease of technologies and equipment, intermediate agents’ services, un-trackable payment systems, partnership programs, cash out and many others. It is no coincidence the term Crime-as-a-Service appeared, which means the transformation of cybercrimes market in a well full-cycle machine, which operates with “minus” term», – marked an expert from Cisco, responsible for IS, Aleksei Lukacki.
Russian IS Market Structure
If to speak about IS market structure, it didn’t change a lot in 2014. As previously, key Russian IS market segments are segments of networks safety and anti-virus protection, together these segments have 70% market share. Nevertheless, despite lack of changes in dynamics and structure of the Russian IS market, the possibility of them during 2018 is very high. At the same time a forecasted continuously negative macroeconomic situation will become one of the key drivers for structural changes of IT market in general and IS segment in particular.
According to J’son & Partners Consulting’s forecasts, share of IS services by 2018 will grow 4 times vs 2014 with 40% market share and general market volume in comparable prices will drop for 15%. At the same time, intellectual IS services, provided under Security as a Service (SECaaS) model will have the major share in the services’ structure.
Vivid changes will happened in clients’ structure. Currently prevailing share of clients from governmental, financial and energy sectors will transfer towards small and medium trade and services companies and also individuals. Sale model (IS products) will also change - service providers become theirs key consumers.
Network Security and Anti-Viruses; Others
Russian IS Market Drivers
Among technological factors influencing IS market are changes in internet traffic structure towards smart mobile devices, where traffic share will increase more than 10 times till 40% by 2018 in comparison with 2014. Meanwhile, traffic share of PCs and notebooks will decrease from 90% in 2014 till 50% in 2018. Mostly it will be generated by virtual PCs with the use of STB - “zero” and “thin” client, connected to monitors and Smart TV, traffic of which will be amounted to 10%.
At the same time, J’son & Partners Consulting’s analysts expect, by the end of forecasted period, changes in market structure of IS systems and services – convergence of fixed and mobile communication networks and their transformation in a deep programmed information-communication environments. There, all functions of network security will be software in functional virtual networks’ controllers and implementation of “network as a sensor” principles.
About importance of “network as a sensor” term is speaking Aleksei Lukacki: “Whatever units, operational systems, apps or users communicated between each other; we speak about corporate networks, home apps of IOT (Internet of Things) – all of them are combined by one term – Network. Exactly via network all data and inquiries of billions of devices are transmitted, which, by our estimations, will be “inhabitants” of Internet of Things in 4-5 years. That is why network security, a base, on which the security of modern network cooperation, is so important. It is not a coincidence, such term “network as a sensor” appeared in Cisco, which means that in terms of such massive transfer of different manufacturers into IOT, a lot of devices appeared, which are not equipped with any serious protection, lack of standards for information exchange between billions of IOT, network security is the only connection chain, able to increase security and protection of network communication in the future».
According to J’son & Partners Consulting’s analysts this factor is extremely important exactly for network security segment, as it has almost half of Russian IS market in monetary value. It is important to take into consideration that nowadays the segment is presented mainly by hardware-dependent solutions, oriented on protection of physical perimeter and inside it stationary objects (PC, server, DSS). As a result, the appearance of deeply programmed informational and communication environments means the opportunity fully transform the segment of hard-, software in IS segment into services, implemented by operators of physical communication networks.
Information Safety in the Era of Internet of Things (IOT)
Besides, we can expect the active systems’ deployment in 2017 in Russia, constructed on IOT principles, and as a result – IS market systems and services’ convergence, as well as Building Management Systems, BMS with formation of complex systems and services to manage infrastructure objects with over trln.RUB per year.
«Overall Internet – this is what is part of our daily life. And we are speaking not only about connection of industrial ASU TP segments to Internet network, rather about IOT penetration in everyday life of general user – smart home, car start by click via mobile phone during winter, home video cameras with access via Internet… All of this is showing that IOT is conquering Russian population. In several years we won’t remember how we lived without this overwhelming Internet. And of course, in terms of such massive distribution of these technologies, first place will take a question how to provide confidentiality of my life, availability of my IOT and safety from commands and data’s modifications, which these things will exchange between themselves. Safety of IOT – is something that has to be considered already now», - precautions from Aleksei Lukacki.
In general, J’son & Partners Consulting’s analysts think that despite the decreasing volumes of local IS market in monetary terms, the described above tendencies have considerable potential for business development among traditional market players, as well as companies – communication operators, providers of online and OTT services, commercial data-centers operators and players on engineering systems and technical safety systems markets.
This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.