Mobile authentication market expected to surge

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RSA and VASCO to lose ground.

The mobile authentication market is predicted to grow significantly over the next five years, but with major vendors losing ground to authentication specialists.

A report by Goode Intelligence forecast that mobile phone-based authentication products and services will generate US$153 million in 2010 and that the market will grow to almost US$760 million in revenue by 2014; an increase of US$607 million.

Deepnet chief executive Yurong Lin claimed that it was reasonable to estimate that the market will grow to these figures.

“In fact, these figures go with the projection that Gartner has: in 2010 the software-based authentication products will generate $381 million revenue," Lin said. "‘Software-based' is largely ‘mobile phone based'.”

Also in agreement was Sam Curry, vice president of product management and strategy at RSA, who yesterday predicted that the recent Apple iPhone worms represented the ‘early days of mobile malware'.

Curry said: “I agree with the current numbers, all-in including one time password and non-one time password for where we are now. I am generally sceptical of large growth rates that show a market that is <$200M a year growing to over $½B at a large compound annual growth rate.

“However, in this case, I think my scepticism is mitigated by the obvious, parallel spike in mobile platform adoption and abilities. Look at the Asian markets adoption of mobile applications, banking in Europe and now the massive growth of iPhone applications and use (as well as Android and BlackBerry application plans to name only two more).”

The report also predicted that within the next 18 months, the two dominant authentication vendors, RSA and VASCO, will lose market share to the new mobile phone authentication specialist vendors.

Alan Goode, managing director and founder of Goode Intelligence, said: “Incumbent authentication vendors, who are reliant on strong margins in selling hardware tokens, are threatened by the twin threats of falling margins, as the technology becomes commoditised, and reduced market share.

“Furthermore, our research shows that the introduction of mobile two-factor authentication will not only result in mobile-only two-factor authentication vendors taking market share from the current two dominant authentication hardware token vendors, but also that new markets will be opened up as a direct result.

“Mobile phone-based authentication will grow the overall market for authentication products and services. This is good news for the likes of RSA and VASCO as it will help to offset their loss of market share to mobile-only authentication vendors.”

Curry said: “As the value of the platform grows, so too will the attention of the hackers. If it's valuable to ‘you', it will be valuable to ‘them'. That means that strong authentication and transaction monitoring/anomaly detection are vital. The vast numbers of devices and connections make it both incredibly attractive and incredibly convenient and therefore opportune for the hack-criminals to target. With that in mind, if I were a betting man, I'd bet that Goode Intelligence is onto a good thing.”

See original article on scmagazineuk.com

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