Security Stays Strong

That's not to say that solution providers weren't already finding great success with services in general. Deployment and installation topped the list of security services solution providers are currently offering, followed closely by network security assessments. Wireless security assessments, security architecture and managed security services round out the top five.

Within the next 18 months, 15.5 percent of solution providers will add managed security services to their roster, the top planned addition. Plus, nearly 27 percent of solution providers indicated that over the next year, managed security services will produce the fastest-growing sales.

Security solution providers also said managed security services will generate the strongest profits in the next year, with nearly 34 percent citing them as having the potential to be the most profitable. And the proof is in the pudding: Solution providers said margins from managed security services and security Software-as-a-Service (SaaS) have grown from 29.8 percent last year to 34.9 percent now.

Overall, respondents said they generate more revenue from security services than they do security products, with 57 percent of revenue coming in from services. More than 35 percent of solution providers also noted that managed security services offer the highest returns among high-end solutions.

Despite the positive outlook, however, survey results indicate managed security services have a ways to go. Currently, they make up 19.5 percent of security services revenue, trailing other security services. Regardless, nearly 52 percent of respondents said the security market will grow at an increasing rate, which is already evidenced in the managed security services or security SaaS spaces. Since 12 months ago, just over 12 percent of solution providers said their managed security or security SaaS client base has grown 100 percent or more, while 22 percent said their services client base in those areas grew 10 percent to 24 percent.

Gary Cannon, president of Advanced Internet Security Inc., a Colorado Springs, Colo.-based solution provider, said his company is looking into managed security services, mostly in response to the potential revenue and margins. Cannon said the time is right to build a managed security services practice.

"We are seeing that there are increased margins," he said. "Years ago, it wasn't worth the level of effort and all of the work it took to offer managed services. But now with increased margins, we're investigating it again and looking into programs that would fit."

Advanced Internet Security deals mostly in the midmarket, an area Cannon said benefits most from a managed services offering. Smaller companies, he said, have small IT staffs that struggle to handle all of the requirements, and security has a lot of moving parts that make it more complicated in the midmarket. "People don't have the time to devote themselves to all of the security they need to deploy," Cannon added.

—Stefanie Hoffman, Kevin McLaughlin, Damon Poeter, Andrew R. Hickey and Jennifer Hagendorf Follett contributed to this report.