A new report by analyst firm Frost and Sullivan claims the Australian market for managed security services will grow at a compound annual growth rate (CAGR) of 21.6 per cent between 2006 and 2012 reaching $843.1 million.

It estimates the market for hosted e-mail filtering in Australia will grow at a CAGR of 38.1 per cent between 2006 and 2011 and identifies MessageLabs as the market leader.

The report said MessageLabs had 63 per cent of the Australian market for hosted e-mail filtering services.

The market drivers for this service range from access to specialist skills to lower costs and ease of management.

According to Frost and Sullivan the current market penetration of managed security is a little less than half of Australian businesses but this rate will increase in the next three years. Dubbed MSSPs (Managed Security Service Providers), the report said customers look to outsourcing for consistency with a company wide security policy and to remain continually abreast of the latest threats and trends.

Moreover, the service is backed by strong service-level agreements (SLAs).

One company that recently outsourced its e-mail filtering is property consultancy, Savills.

The company's Asia IT director, Eddie Overington, said Savills was previously using an appliance that had become ineffective and unable to handle increasingly sophisticated spam techniques.

Since outsourcing, Overington said these attacks have stopped.

"The return on investment has been substantial. There is no software to update and manage which allows my staff to focus on core business projects," he said.

MessageLabs A/NZ country manager, Andrew Antal, said the local market for managed security services is certainly maturing. He pointed to an IDC report which supports Frost and Sullivan's latest report.

IDC forecasts hosted services to grow at a CAGR of 36.3 per cent between 2006 and 2011.

However, in Gartner's Executive Programs (EXP) survey, which covers 115 Australian IT managers, security wasn't identified as a top 10 priority in 2008.

The survey, which was released last week, found CIOs in Australia and New Zealand (A/NZ) expect their budget to increase by only 1.1 percent this year.

As a result there wasn't a lot of spending allocated to security.

Although security technologies did not make the top 10 in A/NZ it came in at number six worldwide and number two in Asia.