Niche Security Markets Booming

The specialized security software market appears to be heating up at the moment, as major vendors rush to fill out their product lines.

Last week, for example, Computer Associates International Inc. (CA) (NYSE: CA) finally completed its $430 million acquisition of identity management software company Netegrity Inc.; and Citrix Systems Inc. (Nasdaq: CTXS) stumped up $50 million for access gateway vendor Net6 Inc. (see Citrix Buys SSL Vendor Net6 and CA Completes Netegrity Acquisition ).

Netegrity provides an identity and access management product line. CA says it likes the product lineup because its user administration services can be extended across non-Web-based systems, such as various enterprise applications, email and groupware, operating systems, and database systems.

Net6s SSL Access Gateway is an alternative to IPSec and traditional SSL VPNs. Citrix says it's a simpler approach to providing secure access to private resources over the Internet and can be used in conjunction with existing Citrix access infrastructure solutions.

”With Net6, we’ll be able to provide a single point of access from any device to any IT resource over an SSL secure connection, providing on-demand access to both voice and data across virtually any screen size, device type, and location,” says Mark Templeton, president of Citrix. “This acquisition simplifies access and access security, and gives us an opportunity to tap the potential of IP voice applications on IP telephones.”Analyst Brad Lehl at Jefferies & Co. Inc., says the security software market, in particular, is exhibiting healthy growth rates and shows no sign of letting up.

It's not just software that is booming; the market for battle-ready security hardware is also growing. Lehl forsees a whopping 30 percent growth rate for hardware solutions as we move into 2008, and he is not alone in these predictions. Analyst firm IDC believes that the market for security products that combine hardware with Web content filtering software will be 16 percent over the next three years.

Against this backdrop, it is hardly surprising that a network vendor like Citrix has decided to fork out $50 million for a hardware vendor like Net6. The San Jose, Calif.-based firm's core offerings include a Secure Access Gateway and specialist VOIP products.

VOIP security is of increasing interest, particularly in the telecom space. Vendors are already scrambling to add VOIP features to their security products in an effort to win a share of this lucrative market (see VOIP Security Poses a Problem and Vendor Points to VOIP Vulnerabilities).

So, are there any parts of the security market that are not booming at the moment? “The only area in the security sector that isn’t growing is firewalls,” says Lehl. "Everyone already has a basic firewall, but the intrusion prevention technology has gotten better, and now it’s getting a second look from customers.”— John Papageorge, Senior Editor, Next-Gen Data Center Forum