Price competition among vendors will continue to lower prices over the next three years, albeit at a slower rate due to the expansion of service offerings, like cloud and mobile security.
Los Angeles, CA (PRWEB) October 23, 2013
Security and protection software has a buyer power score of 4.1 out of 5, representing an advantageous market for buyers. Buyers have benefited from steadily falling prices for security software over the past decade. Free security software has made strong inroads into the market in recent years, and its position as a viable (though lower quality) alternative to paid security software has forced suppliers to lower their prices to compete. “In addition, the commoditization of security software has made competing products easily comparable,” says IBISWorld analyst Dale Schmidt. As a result, several consumer review boards provide regular extensive breakdowns of available security software suites, arming a buyer with knowledge of each product line’s relative quality.
On the other hand, fierce competition has limited the average supplier profit margin, leaving little room to negotiate on price. Suppliers have had to cut prices, even as wage costs rise. Security software vendors must compete with all other software developers to hire the limited number of talented software engineers. The low supply of these engineers has caused their wages to steadily increase, eating into vendor profit margins. Buyers should expect to receive increasing per-endpoint discounts on large-scale purchases, though, where licenses of 100 or more can lead to per-endpoint discounts of 15.0% or more. Unfortunately for the buyer, there exists no workable alternative to security software. According to Schmidt, to use an internet-enabled device, one must purchase security software or be at high risk of a major security compromise that may leave their device inoperable. However, buyers can easily compare the price, features and quality of competing security suites to choose the best one at the best price.
The availability of free security software has driven the average price down, as these products are often comparable in quality to low-priced security software. However, complementary services can push the annual price up. In addition, cheaper models of security software typically only contain malware protection, while higher-priced products contain additional functionality, such as spam filters, identity protection, a firewall, antiphishing capabilities and more. Overall, there are an estimated 196 security software vendors. The largest vendors, Symantec and McAfee, each control just over 10.0% of the market, while the remainder of the market is filled in by smaller vendors with single-digit market share. Constant technology change provides an opening for niche operators. Currently, mobile and cloud security are the frontier for the market, and these segments are populated with many small operators. The market remains somewhat concentrated, though, because successful small operators are typically acquired by larger vendors. For more information, visit IBISWorld’s Security and Protection Software procurement research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld Procurement Report Key Topics
This report is intended to help buyers of security and protection software. Security software publishers develop and distribute antivirus, anti-keylogger, spyware removal, encryption and firewall software. These companies may also provide consulting and technical support related to this software.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Vendor Financial Benchmarks
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.