There are currently very large forces at play in our industry. The issues, technology, competition, infrastructure, deployment and market are changing at such a rate that will leave many companies behind, while creating enormous opportunities for others. Here are the 6 major trends that are keeping me up at night, because I relish the opportunities they present but am also concerned about the change.
Virtualization and the Cloud
You should not be surprised that I am combining these into one. IT departments are getting much more comfortable with deploying mission-critical applications on internal virtual machines, while their expertise grows on the mainstream virtual servers (VMWare, Hyper-V, Xen, etc.). Smaller companies with small or non-existant IT departments are migrating to hosted email or hosted email security in bunches. Vendors are now stepping over each other to provide a virtual appliance offering. Vendors are also considering hosting portions or all of their services in the cloud. There are already offerings of a cloud-based virtual appliance for email security, providing customers with the best of both worlds: the lower cost of the cloud from an infrastructure perspective with the flexibility of actually managing the whole appliance, not just the service portion.
You no doubt are thinking ‘Hey, didn’t you say email security trends in the title?’. Well, combatting spam and the underlying technologies used are a major part of the value offered by email security companies. Many of these vendors will be examining the area of social spam and coming out with offerings. Spammers are not just sending millions of useless emails, they have figured out the effectiveness of polluting highly frequented sites with spammy messages or links to malware. Instead of sending thousands or millions of emails, just pollute a site visited by thousands or millions of people, the door is open through comments and other avenues. Better yet for spammers, they can hire humans in low wage countries to do this manually.
Growth in computing power of communication devices
These devices are everywhere and they get more powerful every day (e.g Blackberry, iPhone, Android, netbooks, tablets, UMPCs and so on) and are now all used heavily for all types of communication and computing. Email security vendors are trying to find various segments where value can be offered to customers, such as malware protection, system configuration and management from these devices, etc. The economics for the devices vary depending on geography: for example, in some countries where you pay to receive text messages there is major concern about receiving text spam.
Spam and Malware are on the rise and will continue
The internal joke at our company is ‘We get to keep our jobs!’. But frankly, we entered this business because we absolutely hate to see our email polluted with spam and malware, and we hate it enough to try to do something about it. All recent studies show not only an increase, but also a continuous evolution of the types of threats, as well as the vectors used to introduce those threats. There is still no panacea for these ills.
Anti-Virus and Anti-Spam are commoditized
These two markets are showing the signs of commoditization. It is increasingly hard to differentiate the offerings. There is downward pressure on pricing for those who can’t differentiate. Many email security vendors are giving up on developping anti-spam technology altogether, relying on integrating technology from a technology-only focused vendor. It is interesting to read recent independent test reports with many vendors’ results bunched together, and knowing that they are all using the same technology under the hood. As a customer, you should not be shy about asking your current or potential supplier to be clear about what makes them or their offering special.
Consolidation has begun, in line with a market that is subject to commoditization. The market is still growing overall, but the rate of growth has started to decline. The giants of the industry are seeking to increase revenues by buying them, scooping up smaller companies. Heavily capitalized smaller companies with ineffective business models are seeking to trigger liquidation events. Larger companies are vying to complete their security offerings in order to have an answer for every security concern. If you are a vendor, you have some serious ‘fight or flight’ debate going on internally. If you are a customer, it is probably best to remain with a vendor that has been around for a while and has proven staying power.
Have I missed any major trends? Let me know what keeps you up at night, whether you are on the vendor or the customer side of the email security industry.