Asia/Pacific security spending to grow 16.7% in 2023
According to IDC’s latest Worldwide Semiannual Security Spending Guide, spending on security hardware, services and software in Asia/Pacific* is expected to reach USD 36 billion in 2023, an increase of 16.7% over the previous year. Security investments will remain resilient in 2023 and the forecasted years despite the economic slowdown and uncertainty risks. IDC expects spending on security-related products and services to grow at a five-year CAGR of 15.4% over the forecast period (2021-2026) and reach USD 55 billion by 2026. Key drivers behind this growth are rise in cyber-attacks, digital transformation initiatives, and continued hybrid workforce trends.
“With looming economic uncertainty and geopolitical instability, it would be natural for Asia/Pacific organizations to turtle-up on their security spending. Yet, IDC still sees increased security budgets and growth over the next few years to address the more prevalent sophisticated attacks and constantly metamorphosizing threat landscape. Security and business leaders must work together to continuously justify their security spending,” said Christian Fam, Research Manager, Security Services, IDC Asia/Pacific.
From the perspective of industry end users, banking, financial services, and insurances (BFSI), telecommunications, government, and manufacturing continue to be among the top spenders on security solutions in 2023. Technology initiatives such as open banking, digital payments, e-governance, IT infrastructure modernization, and changing compliance regulations continue to trigger investments in these industries. Together, these industries will account for more than 50% of the total security spending in the region. Industries seeing the fastest growth in 2023 are state/local government, utilities, and telecommunications.
“As per the latest IDC survey, over 70% of the surveyed organizations have experienced cyberattacks in the last 12 months, out of which, 55% have paid ransom to avert operational disruptions and financial losses. Businesses in the region are increasing investments in tools and solutions to achieve cyber resiliency against cyber threats,” said Sharad Kotagi, Market Analyst, IT Spending Guides, IDC Asia/Pacific.
The need for security capabilities to support complex IT environments, including network, cloud, and endpoints, continues to see high demand and shortage of skilled cybersecurity resources, creating opportunities for vendors and channel partners to provide security service options. As expected, security services will dominate the security markets, accounting for nearly half of the security spending throughout the forecast period, growing at a 14.7% five-year CAGR. Managed services will continue to be the largest category in the security services market– delivering around 40% of the spending throughout the forecast – followed by consulting services and integration services.
Security services will be followed by the security software, led by endpoint security, information and data security software, and identity and digital trust software, accounting for more than half of the overall security software spend in 2023. Security software will be followed by security hardware spending, dominated by network security needs – including firewalls, intrusion detection and prevention, unified threat management, and virtual private networks. These technologies help organizations protect their devices, network, and applications, hence, the demand has remained strong and in line with the need to secure a hybrid workforce. The region continues to see a rise in highly sophisticated and targeted cyberattacks which has increased awareness to adopt a holistic cybersecurity framework to achieve cyber resiliency. China continues to be at the forefront in security investments in the region, accounting more than 40% of total Asia/Pacific* security spending in 2023, with a five-year CAGR of 18.8% during the forecast period. The next two countries which follow China in terms of security spending are Australia and India. Together, these countries will account 25% of the overall Asia/Pacific* security spending in 2023.
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