A Market Of Opportunity?

Will the need to improve information security in China lead to new revenue streams for vendors of security tools and services? For now, there's no clear-cut answer.

"China might want to have its own vendors shape the future of security practices in its country," suggests John Pescatore, VP of Internet security at Gartner. In addition, China's authoritarian control could get in the way of a free market that lets buyers, rather than the government, choose the types of security tools and services they want.

Not everyone sees it that way. "Government control prohibiting the use of security tools from foreign vendors will mostly be restricted to the unique requirements for the government agency or military networks," says Anik Bose, VP of corporate business development at 3Com Corp. "The Chinese government recognizes that the lack of information security is a real business issue and is allowing corporations in China the freedom to buy the appropriate technologies to protect their networks."

3Com entered the Chinese market in November 2003 when it founded Huawei-3Com Co. Originally, the joint venture focused on selling the company's routers and switches. To provide clients with more complete systems, intrusion-prevention systems were added to the mix.

"The Chinese government could directly benefit from increased corporate security," Bose says. "If it wants to prevent certain activities, such as illegal peer-to-peer traffic, advanced security technologies like [intrusion-prevention systems] being put in place might actually help."

It's clear there's a market for IT security offerings. Of the 700 Chinese sites that participated in the InformationWeek/Accenture 2005 Global Information Security Survey, two in five expect to install application firewalls in the next 12 months. A third will invest in monitoring software, and approximately a quarter of sites expect to improve application security, install intrusion-detection tools, and integrate their security systems.

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