IPS Market on Growth Trajectory
So far no domestic software company has succeeded in achieving \50 billion of annual sales. Hanasoft and Handysoft each passed the \40 billion mark in 2000, but since have experienced a decline in revenue with the bursting of the venture bubble.
After three years of efforts to recover, domestic software companies set symbolic goals of \100 billion of annual sales revenue in 2004, bypassing the \50 billion mark. Tmax Soft and Handysoft set the bar at \55 billion and \54 billion in annual sales, respectively. Hanasoft plans to achieve \43.7 billion of annual sales revenue, but is expected do better and achieve \50 billion thanks to its new businesses. AhnLab plans to beat \50 billion in 2005 and Miracom the same in the coming three years. They all think 100 billion of annual sales is within reach.
Specialists say the situation is definitely different from that in the past. Since 2001, the domestic software companies have strengthened their competitiveness in local software markets which were once dominated by overseas companies.
In particular, domestic security companies have enjoyed brilliant business results thanks to skyrocketing demands due to nationwide Internet disturbances caused by illegal external attacks. In the domestic software market, domestic security software companies have gained relative superiority over foreign companies. The two representative companies, AhnLab and Hauri, take about an 80 percent share of the anti-virus market. Domestic companies also lead the IDS, virtual private networks (VPN), ESM, and encryption and certification markets. In the case of firewalls, which form a comparatively large market, domestic and overseas companies are competing fiercely over market share. The domestic firewall providers have gained superiority in the public and financial sectors. They are forecast to successfully extend their superiority to other business fields including manufacturing and lead the domestic market in near future.
AhnLab, a leading provider of antivirus programs, failed to achieve \30 billion in revenue last year. The company, however, aggressively raised its target to over \40 billion this year. Future System, a leader of the domestic VPN market, expects over \30 billion in sales this year.
Newly emerging markets are expected to provide additional opportunities for domestic companies. In particular, the highest expectation is placed on intrusion prevention systems (IPS), the spotlighted next generation security solution.
According to IDC, a market research company, the global IPS market is forecast to grow from 1.19 billion in 2004 to $1.87 billion in 2006. The domestic IPS market, showing rapid growth, is likely to reach \100 billion in 2005. Overseas companies such as Network Associates, Tipping Point and Net Screen launched solutions in the domestic IPS market earlier than domestic ones. Recently an increasing number of domestic IPS companies began to participate in competition with overseas companies.
Representative domestic IPS providers include CHK Hankang which recently acquired Ekardia, the first domestic company to develop IPS, Infosec Technologies, Wins Technet, Joeun Security and CentaVision. Some domestic fire wall providers such as Secui.com also participate in the domestic IPS market by adding destructive traffic blocking functions to their fire wall solutions.
They supply IPS products at lower prices than their overseas counterparts, customize their solutions and even open their source codes. In addition, they have constructed a strong customer base through the supply of existing security solutions, and adapt their solutions to the network environments of domestic customers.
Based on their sharp competitive edge in the domestic market, the domestic security solution providers have made efforts to export their products. Secui.com expects to export \10 billion of its Gigabit fire wall this year. AhnLab and Future System set export goals of \5.5 billion and \3.5 billion respectively.