2006 Predictions


  1. M&A continues, with small deals to acquire innovative technology being most prevalent. No blockbuster security deals (> $500 million) will happen in 2006.

  2. Vendors relying on licensing OEM technology find a world of hurt, as important intellectual property is acquired and licensing terms become increasingly unattractive. The UTM blade architecture makes intellectual property valuable real estate and those with strong IP positions see higher value exits.

  3. Microsoft has limited positive impact on security in 2006 (despite the introduction of OneCare), but the AV market is living on borrowed time. Integrated security and endpoint presence for enforcement provides a visible hook for MSFT to catch up to Google.

  4. Increasingly bigger VARs start flexing their muscles and make or break a number of vendors in 2006. Those “made” vendors get big M&A outcomes in 2006.

  5. Continued vulnerabilities in AV and spyware products attract the attention of tort lawyers who target AV companies after the resurgence of a well-known attack renders most SMBs defenseless. Larger enterprises with multiple layers of defense escape unharmed and point to the criticality of a layered defense strategy.

  6. Open source security stumbles in 2006, and the changing business models and decreasing effectiveness of Nessus, Snort, and MailAssassin are not well received. Service providers make significant investments to drive a future renaissance in open source UTM software, SIM, web filtering and encryption to dramatically reduce their cost to deliver MSS offerings.
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