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The IT security industry is not consolidating

Richard Stiennon | March 16, 2016
A careful count of the number of IT security vendors around the world reveals unprecedented growth.

After Israel, Northern Ireland, Scotland, Wales, England combine to chalk up a healthy 75 security vendors, and Canada 49.

Based on the number of invitations I receive to speak in India, and the number of followers I have on Twitter, Facebook, and Linkedin, from India it is no surprise that India is booming in cybersecurity with 41 companies. I expect there to be many more startups coming out of India soon. Perhaps the acquisition of Cyberoam by Sophos will be to India what the IPO of Check Point was to Israel, igniting a fevered startup economy.

Now let's look at the breakdown within the United States:

Security vendors by US state
IT-Harvest ResearchSecurity vendors by US state

Of course California is the overwhelming leader in cybersecurity with 324 vendors, most in the Bay Area. In my experience Boston (60) should have a clear second place but in recent years "cyber" has become big business in Washington DC. If you combine Virginia (60), Maryland (27), and DC (4) you get 91 vendors, which points to a second major concentration of vendors in the US.

Even though I knew of many vendors in Texas it surprised me to count 53, way ahead of New York (38) and Florida (34).

I have looked carefully at many lists of security companies in Georgia (25). I think the reason the local business press is so effusive is that people in Atlanta still think of ISS, SpyDynamics, CiphererTrust, and Lancope, as their own, even though they have been acquired and belong to IBM, HP, Raytheon, and Cisco respectively. Based on the valuations of these companies, Georgia can still claim to be a hotbed of cybersecurity.

One last interesting set of data is my classification of all vendors into the major buckets of Network, Endpoint, Data, IAM (Identity and Access Management), and GRC(Governance Risk Compliance).

Major Buckets of the IT Security Industry
IT-Harvest ResearchMajor Buckets of the IT Security Industry

For now, my estimate of the actual revenue are very rough and based on a total IT Security market of $104 billion in 2015. Much more on that later. But the number of vendors in each bucket are accurate. The 230 network security vendors include all Firewalls, UTM, IPS/IDS, NBAD, and netflow based solutions.

IAM is next. The reason there are so many vendors in this space - 211 - is that there are so many authentication mechanisms. Two-factor authentication, password grids, smartphones, and biometrics from finger prints to facial recognition to voice and even how you walk (gait) are included in this bucket.

 

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