Information Security Spending To Reach the $80-Billion-a-Year Threshold in 2016. IT Outsourcing and DLP, Main Drivers

Worldwide spending on information security products and services will reach $81.6 billion in 2016, an increase of 7.9 percent over 2015, according to Gartner’s recent forecast.

Consulting and IT outsourcing are currently the largest categories of spending on information security. Until the end of 2020, the highest growth is expected to come from security testing, IT outsourcing and data loss prevention (DLP).

"Organizations are increasingly focusing on detection and response, because taking a preventive approach has not been successful in blocking malicious attacks," said Elizabeth Kim, senior research analyst at Gartner. "We strongly advise businesses to balance their spending to include both."

According to Gartner, spending in security markets such as consumer security software, secure email gateways (SEGs) and endpoint protection platforms (EPPs) continues to show constrained growth due to commoditization.

Gartner's latest forecast also includes these assumptions:

The average selling price for firewalls is expected to increase by at least 2 or 3 percent year over year until the end of 2018.

By 2018, 90 percent of organizations will implement at least one form of integrated DLP, up from 50 percent today.

Public cloud adoption will impact firewall spending by less than 10 percent until the end of 2019 but will have an impact after that.

Half of midsize and large organizations will add bigger, more advanced inspection-oriented features to their network firewalls by 2019.

“Security spending will become increasingly service-driven as organizations continue to face staffing and talent shortages,” Kim adds. “Managed detection and response (MDR) is emerging, with demand coming from organizations struggling to deploy, manage and use an effective combination of expertise and tools to detect threats, and then bring their environment back to a known good state. This is particularly true for targeted advanced threats and insider threats. With more MDR providers emerging targeting the midmarket, Gartner foresees these services being an additional driver for security spending for both large and smaller organizations.”

Last year, Gartner predicted worldwide information security spending will grow 4.7% to reach $75.4 billion in 2015. According to a RAND Corporation study, the cost of managing cyber-security is expected to increase 38% over the next 10 years, reaching almost $100 billion, as companies spend more on cybersecurity tools. Worldwide spending on cybersecurity has already passed the $70-billion-a-year threshold and is growing 10% to 15% annually.