15 Aug 2022

Asia/Pacific* Security Spending to Exceed $31 Billion in 2022 Due to Increased Digitalization, Says IDC

Banking, Financial Services, and Insurance (BFSI), Government, and Telecom Industries Enhancing Security Features Investments

SINGAPORE, August 16, 2022 – Spending on security solutions and services in Asia/Pacific* is forecasted to exceed $31 billion in 2022, an increase of 15.5% from 2021, according to IDC's latest Worldwide Security Spending Guide. Despite headwinds such as looming global recession, geopolitical conflicts, and rising inflation, investments in hardware, software, and services related to cybersecurity are expected to reach US$ 57.6 billion in 2026, with a CAGR (compound annual growth rate) of 16.4% for the period of 2021-26. The rise in cyberattacks, increasing demand for a hybrid working model, and ensuring data privacy and regulatory compliances are tailwinds to investment. Effective threat management has become increasingly important as enterprises move toward digital sovereignty.

"The recent spate of cyber-attacks preceding the Russia-Ukraine war has made the organizations in the region take notice and invest in tools to plug existing gaps," says Vinay Gupta, Research Director, IT Spending Guides, IDC Asia/Pacific. "These investments must not be knee-jerk reactive purchases, rather should be planned as long-term strategic investments," he added.

From the perspective of industry end users, banking, telecommunications, government, and manufacturing will be the highest spenders on IT security in 2022. BFSI and Telecoms are investing in digital transformation (DX) projects, emphasizing enhancing security features and customer service solutions. With the open banking and e-governance push - banks, fintechs, and government agencies are becoming more interconnected, launching more personalized services to customers and citizens. Data security, confidentiality, ethical use of data, and compliance with regional regulations are priorities for these industries. They will constitute more than 50% of the total security spending in the region. The fastest growing sectors in 2022 are state/local government, utilities, and telecommunications.

"Customers, businesses, and government agencies all use digital capabilities to enhance their business processes, and respective online experiences especially post Covid," says Sharad Kotagi, Market Analyst, IT Spending Guides, IDC Asia/Pacific. "Digital-first is a long-lasting but ever-changing fixture, but at the same time, challenges remain, with cybersecurity being one of the biggest ones," he added.

Drive toward a multi-cloud environment, automation, AI, and analytics require organizations to operate in a highly secure environment which has increased the demand for a suite of security services such as managed services, consulting, integration, and support services. As expected, Services will be the largest category among security markets, accounting for almost half of security spending throughout the forecast period growing at a five-year CAGR of 16%. The security services market is dominated by managed services – constituting around 40% of the security services spending throughout the forecast – followed by consulting services and integration services.

Security software will be the second largest security market, led by endpoint security, information and data security software, and identity & digital trust software, accounting for over half of the overall security software spend in 2022. Security software will be followed by security hardware spending, dominated by network security needs – intrusion detection and prevention, firewalls, unified threat management, and virtual private networks. Securing corporate resources in a hybrid working model is a crucial concern for organizations, and security continues to be at the heart of enabling a digital workplace.

The region continues to be impacted by targeted attacks, ransomware, etc., increasing enterprises' awareness to adopt stringent security practices. China will continue to be the region's largest market, accounting for more than 40% of total Asia/Pacific* security spending in 2022, with a five-year CAGR of 21.2% during the forecast period. The two main sectors driving the Chinese market for security-related products are telecommunications and state/local government, which will account for one-third of total spending in China in 2022. The next two countries in terms of security spending are Australia and India. Together, these countries will account for 25% of the overall security spending in 2022.

The Worldwide Security Spending Guide quantifies the global revenue opportunity for both core and next-generation security purchases with detailed forecast data for security spending by 20 industries across nine regions and 53 countries, and five company size bands. This new release of IDC's Worldwide Security Spending Guide brings some extensive taxonomy changes, aligning our market definitions with IDC's Worldwide Security Products Taxonomy, 2022 (IDC #US48813222, February 2022), and market size across segments with IDC's Security Products Tracker. New markets — such as Governance, Risk and Compliance, Zero Trust Edge, or Secure Web Gateway — are now published separately, and several markets include expanded and net new coverage.

*Asia/Pacific excluding Japan

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About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information about IDC's Spending Guides, please contact Vinay Gupta at mvgupta@idc.com.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDCAP and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

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Contact
For more information, contact:

Sharad Kotagi
skotagi@idc.com
+91 80 6699 1000

Vinay Gupta
vgupta@idc.com
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Michael De La Cruz
mdelacruz@idc.com
+65 6226 0330

Miguel Carreon
mcarreon@idc.com
+65 6226 0330