Internet security: Service in the offing - Views on News from Equitymaster

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Internet security: Service in the offing

Dec 7, 2000

Today we are reading an obituary for dotcoms almost everyday. This is because many of the dotcoms forgot that Internet is a means to an end, and not an end in itself. Despite this, there is no denying that Internet is a brilliant delivery channel. That is why, there is such a big market for e-commerce. But this time around, the traditional brick and mortar (old economy) companies are likely to participate in the growth of this delivery medium. As per NASSCOM projections for FY02, B2B transactions are expected to touch Rs 1,320 bn and B2C transactions Rs 180 bn. Therefore, the consolidated transactions are worth around Rs 1,500 bn in FY02, as compared to the negligible Rs 45 bn in FY99. These figures give an indication of the boom that is expected to take place. But the major factors that continue to hamper growth of e-commerce are lack of infrastructure and security. Infrastructure is something that is external to the organisations but security is something they can certainly work on. Thus, security issues are going to hold centrestage for sometime to come.

But what will be the end user requirements? Security is a vast and highly fragmented business. There are different layers to security. First, there is the issue that whatever is sent over the Internet should not been seen by anyone. The solution is encryption wherein the data is jumbled into meaningless information using an encryption key. The size of the key determines how long it will take the hackers to break-in. The bigger the key, the higher the security.

Second is the issue of authentication. With third parties like Verisign providing digital signatures, credibility of the transacting partners can be established through them. Then of course, are the anti–virus products that protect organisations from malicious virus attacks. Finally, there are the issues of authorization, data security and audit trails.

Integrated Security Solution
Public Key Infrastructure
(PKI)
Encryption, digital
certificates, and other security
technologies used to certify
online transactions.
Firewalls Software and
hardware designed to help
companies and consumers
keep out hackers
Anti-virus
software
.
Application/authorization
security
Protecting databases
from unauthorized access.

The organisations are looking for a complete solution. But the irony is that nobody offers one. The need of the hour is managed security services wherein an integrated solution takes care of all security issues. In the future security solutions may be processes and not products.

Today most of the solutions available are preventive in nature. Very soon, with the kind of money at stake, organisations will have to get proactive. They will have to detect and respond to security threats seven days a week and twenty-four hours a day.

Therefore, we are talking of a security management service which defines the security strategy for an organisation, develops a seamless solution that works across all the layers of security and provides for a facility to keep watch on the organisation. This means a large market that is hardly tapped and even bigger revenues.

According to International Data Corporation (IDC), the worldwide market for information security services (including consulting, integration, management, and education & training) in 1998 was $4.8 billion. This figure is expected to grow to $16.5 billion by 2004 with security management services expected to be the fastest growing sector.

Surprisingly, hardly any of the Indian software companies talk of security. Very few like PSI Data Systems have an interest in the area. Security management services being consulting in nature will have higher billing rates. The security strategy is to be continuously updated with changing technology. This suggests a secure future for the security companies.

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