Fighting Spam Pays Better Than Sending ItFighting Spam Pays Better Than Sending It

There's money to be made fighting spam--more money than even spammers see on their bottom lines, a research firm said Monday.

According to estimates by Ferris Research, which tracks the messaging market, revenue for vendors selling anti-spam products will be approximately $130 million in 2003 and soar 200% in 2004 to a whopping $360 million.

That's substantially more than the senders of spam see in revenue, much less profit. Revenue generated by spammers in 2003 will be roughly $130 million, said David Ferris, head of Ferris Research, while their profit during the year will range from $20 million to $30 million.

Spammers are typically small businesses, said Ferris, who believes his revenue and profit numbers are on target. "These aren't people building $100 million companies," he added.

The biggest opportunity for anti-spam vendors will be in the short run, Ferris and other analysts said, because so few businesses currently have top-to-bottom spam protection in place and because spam leads the way in hot-button topics in IT.

"Spam is one of the top issues facing IT managers, even at the CIO level," Ferris said. "They're very hot to trot to take on spam."

And currently, added Maurene Caplan Grey, a research director with Gartner, only about 15% to 20% of companies have deployed enterprise-level spam defenses. "Spam is the low-hanging fruit of the moment," she said, pointing out that anti-spam products are a relatively easy sell. "There's a tremendous amount of money to be made by anti-spam vendors."

But that opportunity won't last forever. By the end of next year, Grey expects to see a vast majority--80%-of organizations with enterprise-quality spam filtering tools in place at the perimeter of the network. "The anti-spam market is changing, the technology is changing," she said. "It's hardly penetrated today, but it's soon to be saturated."

As the now-quick-climbing market matures, consolidation among vendors will continue, a trend that both Ferris and Grey noted is already in the making. The acquisition of ActiveState, an anti-spam maker, by anti-virus vendor Sophos is a good example of this consolidation, both analysts pointed out.

"Spam and viruses are already starting to blur," Grey noted, and said that the Sophos-ActiveState deal is likely only the first of many. "By the end of 2004, we'll have maybe 15 vendors that will be have credible enterprise level E-mail security product or service lines that include spam filtering." At the moment, she estimates that there are more than 40 such vendors.

Consolidation means that some companies will bank on an anti-spam supplier that may not be around for long--a typical problem when IT managers face a hot market that's just getting off the ground, said Ferris.

"It's certainly an issue," he said "Ideally, enterprises would like to depend on a vendor, but they may not have that luxury now. Leaders today in anti-spam may not be the leaders a year from now."

Changes in technology, how anti-spam defenses are delivered--as a service rather than as software, for instance--and a rush to implement features means that anti-spam tools will be in a state of flux for the short term. Companies will need to respond by remaining flexible in their choices of vendors, and products.

"The trend is toward integrating anti-spam into a general e-mail security solution," Ferris said, "but the actuality is in point solutions."

Grey thinks the move toward integration will happen even faster, but still warned companies to pick vendors carefully. By next year, she said, spam filtering will be just another check-off box in the feature list of E-mail security solutions.

"That's what organizations are looking for," Grey said. "Enterprises need to work with a vendor whose vision is one of delivering a group of technologies that cleanse E-mail of all kinds of bad things to protect the boundary of the organization."