The threat of lost productivity and exposure to legal liability is boosting sales of Web filtering packages.

Frost & Sullivan forecasts global sales of Web filtering technology will grow from $247.2 million in 2002 to $776.9 million in 2007.

Media coverage of legal or disciplinary proceedings and high-profile dismissals as a consequence of downloading illegal material - such as pornography - are driving growth in the market, the analyst firm says.

"Cases of employees suing their company for harassment following exposure to inappropriate Web sites, including pornographic and racist pages, are becoming more commonplace. URL blocking is now seen as one way that companies can balance the legitimate use of the internet for business purposes and avoid legal action for allowing employees access to offensive material in the workplace," reports Jose Lopez, Industry Analyst at Frost & Sullivan.

Also fuelling appetite for Web filtering is corporate desire to preserve bandwidth for business applications by discouraging casual surfing.

However Frost & Sullivan's study concedes that companies have more pressing security and infrastructure requirements, such as protecting systems against malicious code.

Lopez commented: "Many companies still need to invest heavily in network and other security products, such as anti-virus software. A prevailing confidence amongst employers in the ability of their workforce to use the internet responsibly diminishes the urgency of implementing web filtering solutions."

Runners and riders

Websense and SurfControl hold the lion's share of the Web filtering market, jointly accounting for a market share in excess of 40 per cent. Other key vendors under review in Frost & Sullivan's study include Secure Computing (which recently acquired N2H2), Symantec, 8e6 Technologies, Webwasher and Elron Software. The list of other players profiled comprises Clearswift, NetIQ, Cobion, Vericept, Bernard Software, Re-Soft, Security Software Systems Inc (SSSI), Filterlogix, Wavecrest Computing and GFI Software.

The global Web filtering solutions market witnessed an impressive growth by the two top players in 2002, which Frost & Sullivan expects to be replicated by some of the second tier vendors in 2003. The ability of the second tier vendors to capture some of the large enterprise accounts and compete more aggressively with the market leaders will determine their sustainability in the future.

The market is largely dominated by specialist vendors. All vendors active in this sector are considering different revenue opportunities such as instant messaging (IM) and peer-to-peer (P2P), which appear to be the key to portfolio expansion.

Frost & Sullivan predicts that the attractive growth rates currently witnessed in the global web filtering solutions market will be wooing the likes of Microsoft, Computer Associates, Cisco and other security players into offering their own Web filtering packages instead of partnering with the existing players. This trend may lead to consolidation in the market over time, Frost & Sullivan anticipates.

Currently, North America accounts for most revenues and is expected to retain this position. Europe lags significantly behind, and the rest of the regions under review in Frost & Sullivan's study - except for China, South Korea and Japan - show little appetite for these technologies.

The market for Web filtering or URL blocking covers all technology designed to monitor and guide ongoing patterns of user behaviour at the workplace or at home, primarily children, according to a predetermined policy. The technology relies on compiled databases and intelligent software that recognises certain attributes of web pages, such as scanning for skin tones to combat pornography, and can understand the ambiguous meaning of sexually-explicit words.

According to many censorware vendors, Internet usage declines sharply in the immediate aftermath of monitoring software implementation, as workers become wary of being associated with downloading inappropriate material or trading files using corporate computers. ®