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Security spend to hold up despite economic headwinds

Enterprise spending on essential cybersecurity protection will remain stable over the next 12 months, despite the likelihood of a tough global economic climate, a leading analyst has predicted.


Mauricio Sanchez, Research Director with Dell’Oro Group, believes that static but solid security spending should be judged against the prospect of fiscal gloom: “Most economists predict that in 2023 the worldwide GDP growth rate will be weaker at 2.1% compared to the actual 6.0% and expected 3.0% growth in 2021 and 2022, respectively,” he said. “Put in perspective, 2.1% growth would be the third weakest rate of growth in the last 20 years and only overshadowed by the Great Recession in 2009 and the Covid-19 drop in 2020.”


While it would be folly, added Sanchez, to expect security spend to break records in 2023, he expects it to remain stable against increasing economic storminess: “Of late, security has and is expected to continue a board-level discussion and hence be a top investment priority,” he noted. “Attacks aren’t stopping even if the economy does. No CEO wants their mugshot on the nightly news because of a security breach.”


Sanchez expected mixed fortunes for SASE, the amalgamation of SD-WAN and security service edge technologies: “Most enterprises have and will continue to purchase separate SD-WAN and SSE solutions to integrate them to achieve the disaggregated form of SASE,” he explained. “We expect enterprises to continue to prioritize the security side of SASE but slow down the networking side as the economic pressure increases. As a result, we foresee the SSE-side of SASE to post another year of solid growth in 2023, but we anticipate that SD-WAN will see a marked deceleration in its growth.”


In a further prediction, he forecast that increased cloud breaches will cause spending on cloud workload security to pass $6bn in 2023, four times higher than total spend in 2020. He said Dell’Oro recently issued its first Advanced Research Report on the cloud workload security market, finding that network security vendors have entered cloud workload security as a natural adjacency: “We found a market in hypergrowth as enterprises that have or embrace the cloud find many new, thorny security problems,” he concluded. “As a result, we expect that enterprises will have to spend the money and lead the cloud workload security market past previous highs.”


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