7/10/2007 -- Cisco Systems Inc. has a thriving security services practice that continues to grow. There's a reason for that: Services are hot, after all, and some services are hotter than others. For a number of reasons, security might be the hottest services segment of all.

Consider the market for managed security services, which some watchers expect to more than double by 2010, when it should top out at $12.1 billion. That news should have Cisco, with its ambitious self-defending networks strategy (and its attendant services tie-in) licking its chops.

According to market watcher Infonetics Research, demand for security services continues to ramp up, thanks (not surprisingly) to the proliferation of security threats of all types, the complexity of existing security solutions and (also not surprisingly) the desire of service providers to boost their revenues.

The steady growth in the managed security services segment is offset, to a degree, by a corresponding decline in the market for managed encrypted VPN services, which -- in spite of a modest 4 percent growth between 2005 and 2006 -- is expected to decline over the next few years. That market is currently valued at around $20.5 billion, according to Infonetics.

"MPLS services are really starting to steal business away from encrypted VPNs," said Jeff Wilson, principal analyst at Infonetics, in a statement. "This is having a significant impact on spending for managed IPSec site-to-site VPNs, especially among large organizations, who are starting to migrate from complex self-managed IPSec VPNs to simpler carrier-managed MPLS services."

Elsewhere, Infonetics reported, nearly half (49 percent) of security services revenues stem from sales of managed firewall services, while 27 percent are derived from sales of content security and 24 percent from "other" security services. Infonetics expects these proportions to shift, perhaps drastically, by 2010.

Finally, the vast majority of VPN services revenues (97 percent) today comes from IPSec VPNs; only 3 percent stems from sales of SSL VPNs. By 2010, however, SSL VPN revenues should rise significantly. --Stephen Swoyer