The US market for information security will grow 19 percent annually through 2008 driven in part by efforts to integrate security on enterprise-wide bases. High-end activities such as consulting/risk assessment and outsourcing will lead gains followed by encryption hardware, biometric access controls, spam filters, and VPN hardware/software.

This study analyzes the $8.7 billion US information security industry. It presents historical data (1993, 1998 and 2003) and forecasts to 2008 and 2013 by product/service (e.g., firewalls, access controls, encryption, telephone security, network protection, anti-virus, password protection); and by market (e.g., financial institutions, information processing, industrial).

The study also examines the market environment, details industry structure and market share, and profiles 29 leading competitors including Cisco Systems, Hewlett-Packard, IBM, Sun Microsystems, Check Point Software, Network Associates, Symantec, and VeriSign.

                           TABLE OF CONTENTS
                                    
  
  SECTION                                                          PAGE
  
         INTRODUCTION                                                 x
         
   I.    EXECUTIVE SUMMARY                                            1
  
  II.    MARKET ENVIRONMENT                                           4
         General                                                      4
         Economic Environment                                         5
           Cyclical Trends                                            6
           Long Term Trends                                           8
         Information Security Infrastructure                         11
           Security Sector Trends                                    12
              Physical Security                                      12
              Information Security                                   13
           Information Technology Trends                             14
              Computer Hardware & Software                           15
              IT Services                                            16
              Systems Integration                                    17
              Electronic Commerce Trends                             17
         Cost/Pricing Dynamics                                       18
         Legal/Regulatory Environment                                20
         International Environment                                   21
           World Information Security Markets                        22
           Foreign Trade & Multinational Investment                  23
  
 III.    TECHNOLOGY                                                  25
         General                                                     25
         Basic Technological Concepts                                26
           Microelectronics                                          26
           Computer Hardware & Ergonomics                            28
           Software & Services                                       30
           Networking/Open Computing                                 32
           Information Security Breaches                             33
              Hacking                                                34
              Viruses                                                35
              Spamming                                               35
              Identity Theft                                         36
              Others                                                 36
         Information Security Technology                             37
           Access Control/User ID                                    37
              Passwords                                              38
              Cards & Tokens                                         39
              Biometrics                                             40
           Encryption                                                41
              Formats, Standards & Algorithms                        41
              Products                                               43
           Content Filtering                                         43
              Anti-Viral Software                                    43
              Other Methods                                          44
           Network Security                                          45
              Firewalls                                              45
              Virtual Private Networks                               45
              Other Methods                                          46
           Administrative/Organizational Approaches                  46
           
  IV.    PRODUCTS & SERVICES                                         48
         General                                                     48
         Hardware-Based Products                                     52
           Firewall/VPN Hardware                                     54
           Access Controls                                           56
              Card-Based                                             58
              Biometric                                              59
              Other                                                  61
           Encryption Hardware                                       61
              Server Accelerator Cards                               63
              Other                                                  64
           Telephone Security Devices                                65
           Other Hardware                                            66
         Software-Based Products                                     68
           Network Protection Software                               71
              Firewalls                                              72
              Virtual Private Networks                               74
              Other                                                  75
           Content Protection Software                               76
              Anti-Virus                                             77
              Spam Filtering                                         79
              Other                                                  80
           Encryption Software                                       81
              Public Key Infrastructure                              82
              Other                                                  83
           Password Protection Software                              84
           Communications Security Software                          86
           Security Management Software                              88
           Other Software                                            90
         Information Security Services                               90
           Consulting/Risk Assessment                                93
           Systems Integration/Value-Added Reselling                 94
           Managed Security Services                                 96
           Other Services                                            97
           
   V.    MARKETS                                                     99
         General                                                     99
         Financial Institutions                                     102
           Sector Outlook                                           103
           Information Security Outlook                             104
         Information Processing                                     106
           Sector Outlook                                           107
           Information Security Outlook                             108
         Industrial                                                 110
           Sector Outlook                                           111
           Information Security Outlook                             112
         Business, Professional & Personal Services                 114
           Sector Outlook                                           115
           Information Security Outlook                             116
         Communications                                             118
           Sector Outlook                                           118
           Information Security Outlook                             120
         Trade & Distribution                                       121
           Sector Outlook                                           122
           Information Security Outlook                             124
         Government/Institutional                                   126
           Sector Outlook                                           126
           Information Security Outlook                             128
         Consumer                                                   130
           Sector Outlook                                           131
           Information Security Outlook                             132
  
  VI.    INDUSTRY STRUCTURE                                         135
         General                                                    135
         Industry Composition & Market Share                        136
         Research & Product Development                             139
         Manufacturing                                              141
         Marketing & Distribution                                   143
         Financial Issues & Requirements                            145
         Mergers, Acquisitions & Industry Restructuring             148
         Strategic Partnerships                                     152
         Company Profiles                                           168
           Access360, see International Business Machines 
              Corporation
           Axalto, see Schlumberger Limited                            
           Business Layers, see Netegrity Incorporated                 
           Check Point Software Technologies Limited                171
           Cisco Systems Incorporated                               176
           Cobion AG, see Internet Security Systems Incorporated       
           Compaq Computer Corporation, see Hewlett-Packard 
              Company                                                  
           Computer Associates International Incorporated           178
           Computer Sciences Corporation                            180
           Datakey Incorporated                                     182
           Deersoft Incorporated, see Network Associates
              Incorporated  
           Entrust Incorporated                                     186
           Genuity Incorporated, see Level 3 Communications 
              Incorporated                                             
           Hewlett-Packard Company                                  189
           Identix Incorporated                                     194
           International Business Machines Corporation              196
           Internet Security Systems Incorporated                   200
           IntruVert Networks Incorporated, see Network Associates
              Incorporated                                           
           Level 3 Communications Incorporated                      203
           Marshal Software Limited, see NetIQ Corporation             
           Microsoft Corporation                                    204
           Mountain Wave Incorporated, see Symantec Corporation        
           Neoteris Incorporated, see NetScreen Technologies 
              Incorporated                                             
           Netegrity Incorporated                                   207
           NetIQ Corporation                                        209
           NetScreen Technologies Incorporated                      212
           Network Associates Incorporated                          215
           Novell Incorporated                                      219
           PentaSafe Security Technologies Incorporated, see NetIQ
              Corporation                                            
           Proton World International, see STMicroelectronics NV       
           RapidStream Incorporated, see WatchGuard Technologies
              Incorporated                                           
           Recourse Technologies Incorporated, see Symantec 
              Corporation                                              
           RSA Security Incorporated                                221
           SafeWeb Incorporated, see Symantec Corporation              
           Schlumberger Limited                                     226
           SecurityFocus Incorporated, see Symantec Corporation        
           SofaWare Technologies Limited, see Check Point Software
              Technologies Limited                                   
           SonicWALL Incorporated                                   229
           STMicroelectronics NV                                    231
           Sun Microsystems Incorporated                            233
           Symantec Corporation                                     236
           3Com Corporation                                         242
           Trend Micro Incorporated                                 244
           Utimaco Safeware AG                                      248
           VeriSign Incorporated                                    250
           Visionics Corporation, see Identix Incorporated             
           WatchGuard Technologies Incorporated                     254
           Zone Labs Incorporated                                   256
         Other Companies Mentioned In Study                         259
  
    

                            LIST OF TABLES
                                   
     TABLE NUMBER                                                  PAGE
  
         
         SECTION I -- EXECUTIVE SUMMARY
  
         Summary Table                                                3
  
  
         SECTION II -- MARKET ENVIRONMENT
  
    1    Macroeconomic Environment                                    8
    2    Information Security Market Trends, 1993-2003               10
    3    Private Security Market Trends                              13
    4    Information Technology Market Indicators                    15
    5    World Information Security Market                           23
  
  
         SECTION III -- TECHNOLOGY
  
    1    Information Security Losses                                 34
  
  
         SECTION IV -- PRODUCTS & SERVICES
  
    1    Information Security Products & Services Market             51
    2    Information Security Hardware Demand                        53
    3    Firewall/VPN Hardware Demand                                56
    4    Access Controls Demand                                      58
    5    Encryption Hardware Demand                                  63
    6    Telephone Security Devices Demand                           66
    7    Other Information Security Hardware Demand                  68
    8    Information Security Software Demand                        70
    9    Network Protection Software Demand                          72
   10    Content Protection Software Demand                          77
   11    Encryption Software Demand                                  82
   12    Password Protection Software Demand                         85
   13    Communications Security Software Demand                     87
   14    Security Management Software Demand                         89
   15    Other Information Security Software Demand                  90
   16    Information Security Services Revenue                       92
  
         SECTION V -- MARKETS
  
    1    Information Security Market by Sector                      101
    2    Financial Sector Indicators                                104
    3    Financial Institutions Information Security Market         106
    4    Computer Hardware & Software Market Trends                 108
    5    Information Processing Information Security Market         110
    6    Industrial Sector Indicators                               112
    7    Industrial Sector Information Security Market              114
    8    Services Sector Indicators                                 116
    9    Services Sector Information Security Market                117
   10    Communications Sector Revenues                             120
   11    Communications Sector Information Security Market          121
   12    Retail Sales Trends                                        124
   13    Trade & Distribution Sector Information Security Market    125
   14    Government/Institutional Sector Indicators                 128
   15    Government/Institutional Information Security Market       130
   16    Personal Income & Expenditure Patterns                     132
   17    Consumer Sector Information Security Market                134
  
  
         SECTION VI -- INDUSTRY STRUCTURE
  
    1    Research & Development Spending Patterns: Selected
           Information Security Companies                           141
    2    Capital Spending Patterns: Selected Information Security
           Companies                                                143
    3    Composite Financial Ratios: Selected Information Security
           Companies, 2002                                          147
    4    Selected Acquisitions & Divestitures                       149
    5    Selected Strategic Partnerships                            154
    6    Revenue & Profits Data: Selected Information Security
           Companies, 2003                                          169
  
     
    
                           LIST OF CHARTS
                                   
    CHART NUMBER                                                    PAGE
  
         
         SECTION II -- MARKET ENVIRONMENT
  
    1    Information Security Market Volatility, 1994-2003            11
    2    Information Security Pricing Patterns                        20
  
  
         SECTION IV -- PRODUCTS & SERVICES
  
    1    Information Security Market by Category, 2003 & 2008         51
    2    Information Security Hardware Market by Product, 2003 & 2008 54
    3    Information Security Software Market by Product, 2003 & 2008 71
    4    Information Security Services Market by Type, 2003 & 2008    93
  
  
         SECTION V -- MARKETS
  
    1    Information Security Market by Sector, 2003                 102
  
  
         SECTION VI -- INDUSTRY STRUCTURE
  
    1    US Information Security Market Share by Company, 2003       139