European Security Services Forecast, 2023-2027

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• List of Figures (3)

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Abstract

The European security services market comprises professional security services (PSS, including consulting and integration security services), managed security services (MSS, consisting of legacy customer premises equipment [CPE] based, hosted, and "as a service"), and deployment & training (security awareness, technical, and certification training). The European security services market is expected to grow with a CAGR of 11.3% between 2022 and 2027. MSS is forecast to be the fastest-growing segment with a CAGR of 14.5% in the forecast period.

Demand for managed security services is fueled by several factors, including the security expert talent shortage, complexity, digital transformation, challenges with securing hybrid and multicloud environments, and the pace of innovation in cybersecurity.

Even though the fastest growth in the European security services market is in MSS, PSS will comprise the biggest share of the market through to 2026. Although not growing quite as fast as MSS, PSS will keep growing at a strong pace.

Compliance and regulations are continually evolving in Europe, with the latest legal requirement for financial services businesses — DORA — in effect as of December 2022. The Russia-Ukraine War has resulted in a cessation of data processing in Russia and the sourcing of IT and security products and services from within Russia for European organizations. Moreover, businesses in Eastern Europe have started planning risk mitigation strategies that include moving digital assets to Western Europe and the cloud. Evidence of this can be seen in the move of all customer data and processing for the Ukrainian banking and finance industry to online and cloud platforms remote to Ukraine and Russia.

Requirements to comply with legal obligations and the lack of internal knowledge and staff to achieve compliance are pushing enterprises toward MSS. Outsourcing providers may help navigate compliance challenges, presenting ad hoc solutions that will comply with regulations and reduce the risks that have arisen from the war.

It is within this context that IDC identifies the following characteristics within the European security services market:

• Adjacent "competitive" markets (i.e., straddling multiple segments within IDC's standard taxonomy) include threat intelligence security services (TISS) and distributed denial-of-service (DDoS) mitigation.
• The European security services market will reach $34.1billion in 2027 and will grow at a CAGR of 11.3% during the forecast period (Figure 1).
• In the European market, Western Europe will account for 92% of revenue in 2022 and 2027, and it is forecast to grow at a CAGR of 11.3%, whereas Central & Eastern Europe (CEE) comprises 8% of the European market in 2022 and 2027 and is forecast to grow at a slightly slower rate of 10.3% CAGR.
• The U.K., Germany, and France are the biggest markets in Europe in terms of security services revenue, accounting for a combined 56% of European revenue in 2027. The Netherlands, Spain, Italy, and Switzerland (the next four largest) comprise 21% of European revenue. Of these seven largest markets, Germany is forecast to grow the fastest with a 12.3% CAGR.
• The evolution of hybrid environments is instrumental to achieve business goals, thus transforming conversations around security, which is becoming a growth enabler for organizations.
• Automating processes will help relieve resource pressure on cybersecurity personnel. However, it also raises the question of data ownership when service providers use end-users' logs to train propositions driven by artificial intelligence (AI) and machine learning (ML).
• The fragmentation of the European market means service providers struggle to expand on a regional level as end users are more attracted to local players with higher cultural affinity and localized support.

This IDC Market Forecast provides examines the European security services market in 2023–2027.

"The urgent need for organizations to address complex threat landscape and mitigate risk will drive double-digit growth in cybersecurity services in Europe over the next five years," said Richard Thurston, research manager, European Security Services. "Professional and managed security services as well as security deployment and training will be a major focus not just for CISOs, but also for the wider business as organizations grapple with the alignment of cybersecurity with business objectives."

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