Both firms already have a major presence in the market for online security: IBM has an enormous client base for IT solutions, while VeriSign is a leader in the trusted security systems space. As a result, the venture should prove extremely successful among large enterprise customers – even in an already mature eSecurity market.
CATALYST: IBM and VeriSign have announced a global alliance to provide eSecurity services.
Technology giant IBM and Internet security firm VeriSign have joined forces to create a more complete Internet technology package. IBM has a reputation for providing reliable infrastructure and technology – and also has one of the world’s largest IT services client bases. VeriSign, meanwhile, is the market leader in the digital certificates market. Together they will market their services to the top 5000 businesses around the world.
Datamonitor expects Internet security revenues to surpass $22 billion by 2003. IBM and VeriSign hope to claim an important slice of this pie – they believe the new deal will bring in total revenues of $1 billion or more over the next three years.
Since there is relatively little to differentiate existing technologies, at least at a basic level, end-users are increasingly relying on standards such as ITSEC and IPSec, and more significantly brand, when choosing security solutions. VeriSign has already made its name in digital certificates – but it can’t claim IBM’s leverage.
As a result, the new partnership is likely to be a force to be reckoned with, even though the Internet security market is relatively mature and IBM and VeriSign both already have a strong presence. Clearly, this will make life still harder for rivals in the eSecurity market.
However, it’s not time to pack up and go home. eSecurity products are naturally segmented by the technology involved and the business solutions they provide. This means there are many niches that players can profitably fill. New (and even existing companies) may have to avoid the enterprise sector, but they can still position themselves in less mature product segments.
The potential for new entrants will have to lie in factors such as technological superiority, and diversification from existing vendors in each product category.