Cybercrime drives the North American managed security service providers market, and still is growing, new analysis shows As cyber threats get increasingly complex, businesses are going to extra lengths to implement new privacy safeguards, the data show.

The analysis by Frost & Sullivan shows that the North American managed security service providers (MSSP) market had revenues of $1.2 billion in 2009 and estimates that those revenues will more than triple by 2016, to $3.9 billion.

"Although budget cutbacks have resulted from the economic slowdown, companies are continuing to implement measures to upgrade security," says Martha Vazquez, a Frost & Sullivan research analyst. "Outsourcing security to an MSSP will free up time for organizations to focus on core business processes."

The introduction of new legislation creates a whole new dimension to constantly-evolving corporate liability for information security, Frost & Sullivan says. All industry sectors, including health care, financial services, and government, are required to comply with regulations such as the Health Insurance Portability and Accountability Act, Sarbanes Oxley Act, and those from the Payment Card Industry, it notes.

Considering the state of the economy, it is imperative for providers to roll out cost-efficient security service options, researchers say. Companies that haven't experienced a serious breach find it difficult to comprehend the return-on-investment benefits, they say. Also, economic uncertainty makes most companies hesitant about implementing managed security services, but organizations are more accepting than in the past, they say.

"There is still a lack of information with regards to the costs entailed by serious data breaches, especially during this slow economy," Vazquez says. "Education must be increased to enable organizations to become more at ease with acknowledging the benefits obtained from outsourcing security to an MSSP."

Security service providers must focus on diversifying their portfolios if they're to remain competitive, the analysis by Frost & Sullivan suggests. Meanwhile, they're leveraging hosted Internet services as a means to offer lower price points, and that has increased the demand for the services in the past year, researchers say.