4/20/2010 -- The Ethernet switching and routing markets seem to have recovered nicely from their year-long woes.

More recently, the security services segment rebounded -- big time -- to cap a surprisingly successful 2009.

True, 2008 set a kind of low-bar, expectations-wise, but industry watchers are enthused about both the short- and long-term prospects for security services, particularly in the burgeoning software as a service (SaaS) space.

This is according to a new study from market-watcher Infonetics Research, which seems surprisingly sanguine about the five-year outlook for SaaS and other security services. "Despite the global economic meltdown that started in mid-2008, the security services market is strong and growing," said Jeff Wilson, principal analyst for security at Infonetics Research. "The primary market drivers … include increasing global demand from organizations of all sizes due to the proliferation of security threats of all types."

Elsewhere, Wilson cited "the complexity of current security solutions, widespread use of diverse devices and the desire of product manufacturers and service providers to add recurring revenue and improve margins." The five-year outlook, in Wilson's view, is strongly encouraging --thanks (again) to demand for SaaS security offerings. "Strong interest in and broad availability of … SaaS … offerings will help drive strong growth in the overall managed security services market over the next 5 years."

For starters, managed security services revenues jumped by 12 percent (year-over-year) in 2009, approaching $10 billion. More encouraging still was an explosion in demand for SaaS offerings: security SaaS sales jumped by a whopping 70 percent last year, driven largely by uptake of content security services such as Web, e-mail and anti-virus security offerings. Last year, Infonetics indicates, SaaS revenues accounted for a healthy 10 percent of all security services revenues; by 2014, it projects SaaS revenues will account for more than a fifth of security services sales.

Demand for managed security services is strongest in North America, which last year accounted for almost half (41 percent) of all sales.
--By Stephen Swoyer