Among market segments, while the anti-virus segment remains the largest, e-mail filtering has also managed to achieve widespread demand, driven mainly by media exposure to spam and the existence of some well established participants in the region. As for Web filtering applications, although the European region did not appreciate them initially, it has now understood the importance of such applications as the dependency on Internet has become inevitable. As a result of this transition, the Web filtering segment is likely to register the fastest growth within the European content security space.
With regard to the challenges, distribution still remains an area of concern as a majority of established content security companies are U.S.-based. Besides, Microsoft's ambitious plans for expanding its presence in the security space, especially in the consumer segment, have alarmed other security vendors.
"Unlike its North American counterpart, the European content security market is highly fragmented and this presents significant commercial challenges for new players wanting to enter the market," says Raja. "Moreover, Microsoft's entry into the marketplace is expected to increase pricing pressures as the company has the capacity to draw customers with more competitive prices."
Distribution challenges could encourage more mergers and acquisitions in the market place as large companies prefer to grow inorganically through acquisitions, to bolster their reach in the market. A similar trend in consolidation is likely in the near future, across the security value chain, as vendors are forced to gain access to resources and enhance their market penetration. These trends could, in turn, offer lucrative exit opportunities for the investment community.
