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APeJC security software market grows 21.1% YoY in 2023

In 2023, the Security software market (by vendor revenues) in Asia/Pacific excluding Japan & China (APeJC) grew 21.1% year-over-year (YoY), reaching US$6.3 billion in constant currency, according to International Data Corporation (IDC)’s Worldwide Semi-annual Software Tracker (2023H2). Strong growth is attributed to continued demand for technologies like Cloud Native Application Protection Platform (CNAPP), Security Analytics Software, Network Security Software & Identity and Access Management Software, all of which are outpacing overall market growth. Demand for advanced security technologies is expected to rise due to escalating targeted attacks, stronger compliance requirements, and hackers utilizing Generative AI technology for more effective attacks.

“There is an increasing concern when AI is being harnessed by hackers to enhance existing attack methods and create new ones. Organizations adopting a three-pronged approach by leveraging automation, using platform security solutions, and employing AI/generative AI (GenAI) embedded technologies, are well positioned to address AI-driven threats”, says Gurpal Singh, Senior Research Manager, Data & Analytics, IDC India.

As rapid digitization sweeps through various industries in the region, investments in digital transformation (DX) are set to flourish compared to non-DX technologies. The shift of businesses to online platforms and their expanding digital footprints have attracted substantial regulatory scrutiny, resulting in tighter data protection mandates to secure large volumes of data produced and stored. Recent enhancements in data protection regulations, such as India’s Digital Personal Data Protection Act, and Thailand’s and Singapore’s Personal Data Protection Act (PDPA), have compelled organizations to reassess their cybersecurity frameworks, thereby putting them under considerable pressure to enhance their cyber defenses. As the ecosystem of applications increases, the attack surface widens in an organization. There is a notable trend towards technology consolidation within the security domain in response to these evolving demands.

According to the ‘APeJC Software, Services and Public Cloud study 2023’, more organizations are now favoring collaborations with platform or end-to-end stack vendors that offer integrated security solutions. This approach is driven by the need for more comprehensive suites that can address a broader range of security requirements efficiently and effectively. More features and individual products are being integrated into comprehensive suites from the supply-side ecosystem. Security vendors that have integrated solutions across multiple technologies are well placed and growing faster than the market, according to IDC Worldwide Semi-annual Software Tracker (2023H2).

IDC forecasts APeJC security software market revenues to grow at a compound annual growth rate (CAGR) of 12.8% over the 2023-2028 period, reaching US$11.6 billion by the end of 2028.

Organizations in the region with substantial investments in IT infrastructure, including those in sectors such as financial institutions, IT/ITeS, Telecom, e-commerce etc. have been early adopters of advanced security technologies. Cloud-native XDR technologies are forecasted to have the highest CAGR of 39.5% from 2023-2028.

Generative AI technology is being leveraged by security vendors to enhance the functionality of solutions, increase efficiency, and improve productivity, especially in a Security Operations Center (SOC). According to ‘APeJC Software, Services, and Public Cloud study 2023’, enhancing the productivity of security analysts by using solutions with Gen-AI capabilities is the top cybersecurity objective pursued by organizations in the APeJC region. As organizations increasingly focus on and expand their use cases, GenAI-powered solutions are set to become a crucial component of their defense systems. AI-driven security solutions are enabling the supply-side ecosystem to up-sell and generate additional revenue streams. IDC

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