Strategy & Vision

Market overview

The growing amount and variety of connected devices as well as digital services continues to create security challenges for both businesses and individuals. Combined with the increasing complexity of IT systems, these trends are driving demand for security services.

The consumer security software market continues to be impacted by the changing device landscape. PC sales are expected to decline by 1 % in 2016 (Gartner, January 2016) and will have a slight negative impact on the market for consumer security products. Nonetheless, there are opportunities to capture market share from the competition. At the same time, the amount of connected smart home devices will grow rapidly. It is expected that there are over 1 billion connected things in homes by 2018, which opens new possibilities for new innovative security products (Gartner, November 2015). Developing economies continue to drive growth in new subscriptions of security software despite economic uncertainty especially in Latin America. App stores and web sales continue to increase their impact on direct-to-consumer sales.

With regard to businesses and governmental organizations, targeted attacks are becoming more advanced and common. In 2015, the number of reported security incidents continued to grow faster than ever (+38% in 2015, PwC). Companies increasingly seek for managed security services and cloud-based delivery to help them maintain control of their security. Larger organizations are interested in securing their mobile device fleets and the demand for incident detection and response services remains very high.

The worldwide security software market is worth USD 21.4 billion (Gartner, May 2015). With regard to businesses, the information security consulting market is worth USD 18.2 billion and is expected to grow by 8,3% annually in 2016-2019 (Gartner, December 2015). Also, the IT outsourcing (incl. managed security services) market is worth USD 15.6 billion and is expected to grow by 14.7 % annually in 2016-2019 (Gartner, December 2015). The consumer security software market is worth USD 5.1 billion and is expected to grow 3.2% annually in 2016-2019 (Gartner, December 2015). All expected growth rates are in constant US dollars.

Strategy 2016–18

F-Secure is shaping up its strategy to capitalize on the next phase of the internet and connected world. The amended strategy reflects the fast growing number of internet-connected devices, the changes in the ways business is done amid the increasing digitalization, and the concurrent increase in cybercrime. Execution of the strategy will further speed up F-Secure's transformation from an antivirus company to a cyber security leader.

The key driver behind the strategic shift is F-Secure's aspiration for growth. F-Secure is continuing to increase its investments in the fastest growing markets within corporate security. These include managed endpoint security services sold through the reseller channel as well as the cyber security services business. Investments in consumer security are continued at a level that targets profitable growth. To enable execution of the growth strategy, F-Secure is actively recruiting highly skilled security professionals, rising cyber security talents and capable sales personnel. The Company also aims at growing through M&A.

Due to the explosive growth in the number of internet-connected devices both in business and in our private lives, society now expects services and data to be accessible everywhere and on any device. Online business services are becoming the de-facto standard, but at the same time online crime has become ever present and globally connected. Cyber threats are growing rapidly and evolving in both scope and sophistication. Protecting people and organizations from new types of attacks, as well as securing new areas of technology and business requires a move away from single solutions towards a broader cyber security portfolio.

In cyber security, F-Secure sees the enterprises with business critical IT systems or customer data as being at the forefront of the market. Such enterprises have needs for cutting-edge threat prevention and detection solutions, as well as solutions that enable them to respond to and predict threats. F-Secure is already serving even the most demanding customers utilizing its know-how and expertise, and aims to increase its presence in this market segment especially in selected target verticals. These include the financial industry, gaming and gambling companies, aviation, defence, law enforcement, and certain global brands.

Over time, the most advanced cyber security solutions will be adapted to more easily scalable corporate security offerings sold through the Company's strong and expanding reseller channel. Eventually, the same technologies can be commercialized in consumer security products as well, for which F-Secure's extensive operator channel offers an attractive route to market.

F-Secure aims to maximize the commercial impact of its technical expertise and multiple sales channels for further growth in its chosen key market segments. These include cyber security offerings to large enterprises in Northern Europe and in the selected verticals, and corporate security business through the reseller channel in Europe and Japan. In consumer security, F-Secure continues with its existing sales channels aiming at profitable growth. The overall key strategic target for F-Secure is to become the leading European cyber security company.