The Impact of the Top 3 Strategic Imperatives on the Managed and Professional Security Services

Industries in China

Transformative Mega Trends

Why: Cloud computing, the internet of things (IoT), and software-as-a-service (SaaS) applications have become an integral part of many business operations as a result of the accelerated digital transformation that many organizations went through in the wake of the COVID-19 pandemic. As these technologies continue to be incorporated, organizations are looking for external support and help to secure their IT environment. 

Frost Perspective: A consequence of the transformation is a wider threat landscape. Traditional security solutions are not designed to detect and mitigate modern cybersecurity threats, so organizations are looking to outsource their threat management to managed security service providers (MSSPs) to help them to monitor and mitigate threats in their IT infrastructure.

Internal Challenges

Why: Organizations’ reliance on digital technologies has resulted in the more frequent and more sophisticated cyberattacks that have overwhelmed in-house security teams. A shortage of qualified cybersecurity professionals that is plaguing China makes it more difficult to expand those teams to manage all the alerts.

 Frost Perspective: The nation’s talent gap is expected to widen in the next 3 to 5 years. External security professionals are one option to help organizations monitor and manage their assets 24/7.

Geopolitical Chaos

Why: China has experienced soaring inflation and a slow economic recovery after the lifting of "zero-COVID" restrictions in the past 12 months. The complicated macroeconomic situation has prompted organizations of all sizes and industry backgrounds to realign their priorities and investment strategies. Many have taken a more prudent approach to cybersecurity spending to maintain healthy cash flow amid the uncertainty. 

Frost Perspective: Organizations are aware of the threats that await if they do not improve their security posture. Protecting their IT environment from advanced threats requires a modernization that is impractical with a tight cybersecurity budget. Instead, organizations are engaging with MSSPs to have access to wide-ranging cybersecurity solutions and experts.

Scope of Analysis

• Managed security services (MSS) are the external resources needed to manage and monitor the security operations of customers’ IT infrastructure. This allows client companies to reduce expenditure on customer-premises equipment or in-house security specialists while receiving effective security management and 24/7 threat monitoring. Professional security services (PSS) ensure compliance and provide security expertise and insights to improve the security operations of customers’ IT infrastructure.

• This study examines China’s cybersecurity services market, offers a breakdown of revenue contributions by vertical and horizontal, and provides a trend analysis for the study period.

• The study derives information and insights from Frost & Sullivan’s secondary research and contributions from vendors, channel partners, and other industry stakeholders. All revenue estimates and forecasts are attributable to Frost & Sullivan’s analysis and modeling. Revenue from the sale of rental of security equipment, licenses, and fees for service implementation is excluded.

Scope

Key Competitors

• CITIC Telecom CPC
• DBAPPsecurity
• IBM
• Lumen Technologies
• Microland
• Network Box
• NSFOCUS
• NTT
• Orange
• PCCW
• Sangfor
• Tata Communications
• Topsec
• Venustech

Growth Drivers

• Stricter enforcement of cybersecurity regulations
• Expanded attack surface
• Shortage of cybersecurity talent

Growth Restraints

• Concerns about data privacy and the proper handling of sensitive information by third parties

• Shrinking cybersecurity budgets and cost-cutting

• Limited understanding of the value of MSS and PSS

Competitive Environment