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F r o s t R a d a r : E m a i l S e c u r i t y , 2 0 2 4

KA5F-74 July 2024

A Benchmarking System to Spark Companies to Action - Innovation That Fuels New Deal Flow and Growth Pipelines

Authored by: Sarah Pavlak

2024

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Strategic Imperative and Growth Environment

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Strategic Imperative

Source: Frost & Sullivan

Factors Creating Pressure on Growth

• A major challenge for email security solution vendors is the continuous and rapid evolution of the

threat landscape, as solutions must keep up with the increasingly sophisticated attacks to various

vectors. Attackers target email but also breach organizational defenses via attack vectors such as

web-based and other collaboration applications.

• Remote working has introduced new vulnerabilities for users and organizations. Threat actors have

taken advantage with new, more sophisticated cyberattacks particularly targeting email.

• Many employees are using personal devices to conduct business. Employees accessing company

email from a personal device continue to drive the need for cloud-based email security services.

• Organizations want advanced AI and ML security solutions to combat attacks. Many vendors are

promoting API-based solutions as legacy secure email gateways (SEGs) cannot detect the advanced

threats organizations are facing.

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Strategic Imperative

Source: Frost & Sullivan

Factors Creating Pressure on Growth

• Attacks may combine web-based threats with specific email attack methods in multiple stages to try

to evade security software solutions.

• AI has gained a tremendous foothold in various aspects of cybersecurity over the past year. Hackers

are utilizing AI to launch sophisticated cyberattacks to quickly compromise email accounts to gain

access to organizations’ systems and exfiltrate data. AI adoption in email security solutions helps

alleviate the ongoing challenge of staying a step ahead of the next attack vector.

• Security vendors increasingly leverage ML and AI, including generative AI, to strengthen

organizations' security posture and reduce administrative overhead owing to a lack of security

expertise to keep up with the fast-evolving security threats.

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Strategic Imperative

Source: Frost & Sullivan

Factors Creating Pressure on Growth

• Organizations are outsourcing email security services because they do not have the security

staff to do it themselves. This is especially true for small businesses. Many email security

solution vendors are catering specifically to this customer group as a result.

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Growth Environment

• The global email security market is worth approximately $5,451.9 million, achieving a 22.9% YoY

growth rate as of 2023. The market will grow to $9,577.8 million by 2027, indicating a double-digit

compound annual growth rate (CAGR) from 2023 to 2027 of 15.1%.

• The email security market has seen strong double-digit growth for the last few years in response

to increasingly severe and sophisticated email-borne cyberattacks.

• Organizations migrating to the cloud are transitioning from on-premises solutions to cloud-

delivered solutions. Vendors within the space who are advancing and innovating their cloud-

based email security solutions are experiencing continued revenue growth.

• Cloud migration has accelerated as organizations had to adapt to the security challenges of

remote working and users had to work outside the traditional network security environment

during the COVID-19 pandemic. This drove growth for email security in 2020 and 2021 and

continued through 2023 as many organizations adopted remote working as their new norm.

Source: Frost & Sullivan

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Growth Environment

• North America is the largest email security market. Because of its economy and security maturity,

North America hosts most top email security vendors. North America’s domestic requirements to

comply with government and healthcare regulations and the many financial institutions

contribute to business opportunities for email security vendors.

• EMEA is the second-largest market for email security. EU General Data Protection Regulation

(GDPR) is a major driver for email security adoption. The increase in data protection and privacy

regulations in this region drives customers to engage or upgrade email security to meet

compliance requirements. Frost & Sullivan expects to see an increase in product demand because

of concerns relating to cyberattacks, liabilities, and companies’ reputations. Several email security

vendors operate primarily in EMEA and are keen on the stringent compliance regulations within

the region.

Source: Frost & Sullivan

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Growth Environment

• APAC and LATAM are the smallest markets for email security but are seeing growth nonetheless.

APAC has lagged North America and EMEA in cloud adoption, but this is changing despite supply

chain disruptions in 2020 hampering vendors’ ability to receive and ship hardware appliances. In

contrast, greater demand for cloud-based security to safeguard the sudden increase in remote

working buoyed email security market growth. LATAM has a promising market with modest

activity. Many vendors are managing the region from their North American offices.

• The midsize business market accounts for the largest percentage of revenue for the email security

sector. Midsize customers need security; however, they have limited security staff as compared to

enterprise companies and depend mostly on managed service providers (MSPs) or managed

security service providers (MSSPs) for support.

• The highest spending industries across the email security sector are banking and finance,

healthcare, government, and education. These are the most widely targeted sectors by cyber

criminals because of the types of sensitive data they deal with. But overall, adoption is high across

every sector as email security is a critical need with some vendors addressing specific industries

that require more advanced solutions.

Source: Frost & Sullivan

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Frost Radar

Email Security, 2024

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Frost Radar : Email Security, 2024

Source: Frost & Sullivan

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• The email security market is highly competitive and comprised of a plethora of vendors. There are

a handful of large security companies, with the rest of the market comprised of email security

start-ups.

• Email security start-up vendors have niche technology and frequently enter the market because

they recognize a missing need and can provide a solution.

• Email security vendors must work diligently to continuously innovate. The market is quickly

evolving due to the constantly changing threat landscape. The start-ups must keep pace with

advanced technology.

• As organizations are increasingly aware that they must enhance their cybersecurity posture,

vendors with innovative, advanced email security technologies will remain top of mind. As many

email security vendors offer similar technologies because they are all trying to address the

continuous threats facing email, competition is fierce to remain innovative.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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• Vendors are developing functions and features to counter advanced threats, adapt to the

changing threat landscape, and help organizations transition from on-premises to cloud-based

email solutions. Frost & Sullivan selected and plotted the top 21 out of more than 40 market

participants in this Frost Radar analysis.

• In 2023, the top five vendors had a combined market share of 65.0%. This has been slowly

declining since 2019, indicating inroads being made by other vendors.

• Proofpoint has been the market leader since 2015 and is an Innovation leader. It continues to

invest heavily in research and development (R&D), and revenues from recent acquisitions and

organic growth are resulting in leading market share gains. Proofpoint has a strong focus on

innovation to remain a market leader with its technological advancements, in addition to its long-

guiding people-centric approach. Proofpoint continues to solidify its market leader status with

significant mergers and acquisitions (M&As) to enhance the security portfolio, striving for a

holistic security approach that customers demand.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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• Trellix is an Innovation leader. Trellix has a unique threat intelligence capability with its

combination of both adversary and victim intelligence, as well as a growth strategy centered

around integrating email security into its XDR capabilities. Email security is a key component of

Trellix XDR and will drive growth strategies. Trellix’s main goal is integration throughout its line of

products to provide a unified customer experience. With a concentration on R&D investments,

Trellix is focused on growing its detection capabilities, operational efficiencies, and integrations to

drive the growth of its email security offerings.

• Cisco is the Growth leader on this Frost Radar. Cisco’s Email Threat Defense solution has had

remarkable growth with an astonishing 182.6% CAGR for 2020-2023. Cisco has made significant

advancements in AI, global expansion efforts, and innovating its cloud email platform over the

past three years. These aspects have all contributed significantly to its growth achievements.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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• Perception Point is a notable innovation and growth leader within the email security market. The

company has introduced key innovative features over the past three years that set it apart from

its competitors. Perception Point’s email security offering encompasses next-generation detection

with multiple layers of AI-powered protection to defend against many different types of threats.

Perception Point also offers browser security – a keen extension to email security. Perception

Point has shown very high growth rates over the past three years and continues to advance its

growth strategy.

• Application Program Interface (API)-based email security is a significant trend within the email

security industry. This is mainly because Secure Email Gateways (SEGs) are unable to detect social

engineering attacks due to their design. Vendors including Check Point, Fortinet, and Mimecast all

offer this capability but with varying factors to set themselves apart from their competitors.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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• Another key trend within the industry is that many vendors must keenly attune their solutions to

compliance regulations. These vary greatly amongst regions and industries. With data protection

being a key component of email security, organizations require security solutions that can meet

these demands. Vendors that have a large presence in European regions, such as Hornetsecurity,

Retarus, and Sophos, have strong data compliance capabilities within their email security

offerings to cater to the needs of the organizations they serve. OPSWAT is also keen on customer

regulation needs, but it is unique in that it caters to government and defense industries that

require very specific data loss protection regulation capabilities.

• Human behavior analysis is a key component to effective email security as humans are the

greatest cybersecurity threat. Vendors such as INKY, Egress, Coro, and Abnormal each take a

unique approach to using AI to examine human behavior patterns and analyze anomalies to be

proactive in detecting specific types of threats that target human behavior, such as phishing

attacks.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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• In February 2024, Google and Yahoo implemented mandatory Domain-based Message

Authentication, Reporting, and Conformance (DMARC) email authentication requirements.

DMARC prevents email spoofing. The requirement affects business-to-consumer (B2C)

companies, specifically those sending bulk emails (more than 5,000 per day) to Gmail or Yahoo

email addresses. Implementing DMARC is complicated and requires configuration and monitoring

for system records, policy frameworks, and mail identifiers. Libraesva and Broadcom offer this

solution to protect corporate brands through simplifying implementation and monitoring. This

helps organizations identify and authenticate valid senders and block unauthorized users.

• Generative AI is a hot topic within cybersecurity, but few security vendors have effectively

incorporated it into their solution offerings. Within the email security sector, the same holds.

IRONSCALES and SlashNext are the only vendors featured in this research incorporating

generative AI effectively into their solutions. These features have greatly contributed to each

vendor’s revenue growth rates, growth strategies, and innovative capabilities.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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• Fortra and Microsoft all have unique threat intelligence capabilities as well as extended detection

and response (XDR) integration. These are important factors for email security because vendors

that can ingest threat intelligence from a full ecosystem of security and technology capabilities

can offer their customers a comprehensive view of the attack kill chain. Fortra recently launched

its cybersecurity platform which offers a broad set of security products, including XDR, and

combines its capabilities into a unified user experience with threat intelligence and analytic

integration. Microsoft has incorporated a unified XDR-level investigation and response capability

into its email security offering. Microsoft also has a large threat intelligence capability gathered

from its wide breadth of security products and across its huge customer base.

Frost Radar Competitive Environment

Source: Frost & Sullivan

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Companies to Action: Companies to Be Considered First for Investment, Partnerships, or Benchmarking

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Company to Action: Check Point

▪ Check Point’s email security solution offers the ability to deploy both inline and post-delivery,

thus offering flexibility for different groups in an organization. Its patented inline protection

offers automatic deployment via API allowing capabilities of a secure email gateway with the

benefits of an API solution, including no changes to MX records, protecting all email (incoming,

internal, and outgoing), and full visibility of end-user information.

▪ Check Point’s AI is powered by ThreatCloud, which incorporates 50 AI-based engines and scans

2.8 billion websites and files daily in addition to 146 million full content emails. This is an

impressive threat intelligence capability and sets Check Point apart from its competitors.

▪ Check Point’s platform can be used out of the box or customized at a granular level to suit an

organization’s needs. Its AI capabilities allow constant profiling of vendors, contacts, and users

to detect deviations and anomalous patterns. Profiling includes SaaS usage, email sending

paths, phone numbers, and conversations to detect hijacking. This is important for

organizations with the rising number of supply chain attacks.

Innovation

Source: Frost & Sullivan

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Company to Action: Check Point

▪ Another step that Check Point takes is automatically learning the Active Directory and

continuously syncing against it to understand roles and use it to detect impersonation. This

includes learning the auto-discovery of assets and profile building for all related entities so the

ML can utilize this quickly after installation and cater specifically to the customer’s previous

data.

Innovation

Source: Frost & Sullivan

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Company to Action: Check Point

▪ With a 63% revenue CAGR for 2020–2023, Check Point is among the fastest-growing email

security vendors on this Frost Radar. The company’s prevention-first mission to secure the

environment before damage happens is straightforward and achievable, contributing to its

significant revenue growth in the past few years.

▪ Check Point’s growth strategy pillars to attract new customers and encourage existing

customers to increase their security investments include being a 100% channel company and

empowering its channel partners and marketplaces for easier sales, leveraging sellers to

provide a broader reach of its product, and deploying significant demand generation

resources.

▪ Check Point has a tremendous R&D budget, arguably one of the largest across all areas of

cybersecurity. For email security, R&D revolves around Phishing 360, which recognizes that the

phishing problem extends beyond email and requires protection across all lines of business

communications. This is aligned with the industry megatrend of securing the entire workspace.

Growth

Source: Frost & Sullivan

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Company to Action: Check Point

▪ AI is a major trend in the email security industry, and some vendors are grandiose in their

claims of how they stand out. Check Point has its ThreatCloud AI with impressive stats to back

up the data and its efficacy. This is something most vendors cannot provide and will resonate

with customers as AI technology becomes widely available.

▪ Between Check Point’s significant R&D investments and its large threat research team,

customers are aware of the cutting- edge insights that fuel the company’s product

development. The company listens to its customers and provides education and training, which

keeps retention rates high and attracts new clients: a concierge-type service helps with initial

deployment of a solution and continues throughout its life cycle.

Frost Perspective

Source: Frost & Sullivan

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Key Takeaways

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Since the end of 2022, there has been a significant increase in malicious phishing emails. With

limited visibility into an organization’s digital footprint and the growing number of virtual

interactions, the risk of successful phishing attacks and supply chain data breaches has increased

significantly. AI exacerbates the situation and enables widespread, sophisticated phishing attacks,

amplifying business risks.

Key Takeaways

Email is the primary business communication method, making it a prime attack vector. Email-

targeted attacks have skyrocketed over the past year, putting organizations at even greater breach

risk and potential data loss.

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Source: Frost & Sullivan

AI is an emerging technology that allows attackers to deploy more types of attacks. Security vendors

can also leverage the technology to combat the influx of attacks. AI plays a vital role in various

aspects of cybersecurity, offering a multitude of impactful use cases. Among the most effective

applications are threat detection & response, automated response, behavioral analysis, phishing

detection, etc. The integration of AI into cybersecurity ecosystems is increasingly prevalent.

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Key Takeaways

Humans are the greatest cybersecurity threat to any organization. This holds especially true for

email security because attackers rely on conning users into clicking on phishing links in emails to

launch an attack. The prominence of targeted phishing, and ransomware, highlights the critical

need for cybersecurity products and services that offer continuous network monitoring assisted by

machine learning or AI to enhance automation and more effectively defend against cyber threats.

Source: Frost & Sullivan

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Frost Radar Analytics

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Frost Radar : Benchmarking Future Growth Potential 2 Major Indices, 10 Analytical Ingredients, 1 Platform

VERTICAL AXIS

Growth Index (GI) is a measure of a company’s growth performance

and track record, along with its ability to develop and execute a fully aligned growth strategy and vision; a robust growth pipeline system; and effective market,

competitor, and end-user focused sales and marketing strategies.

GROWTH INDEX ELEMENTS

• GI1: MARKET SHARE (PREVIOUS 3 YEARS) This is a comparison of a company’s market share relative to its competitors in a given market space for the previous 3 years.

• GI2: REVENUE GROWTH (PREVIOUS 3 YEARS) This is a look at a company’s revenue growth rate for the previous 3 years in the market/industry/category that forms the context for the given Frost Radar .

• GI3: GROWTH PIPELINE This is an evaluation of the strength and leverage of a company’s growth pipeline system to continuously capture, analyze, and prioritize its universe of growth opportunities.

• GI4: VISION AND STRATEGY This is an assessment of how well a company’s growth strategy is aligned with its vision. Are the investments that a company is making in new products and markets consistent with the stated vision?

• GI5: SALES AND MARKETING

• This is a measure of the effectiveness of a company’s sales and marketing efforts in helping it drive demand and achieve its growth objectives.

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Frost Radar : Benchmarking Future Growth Potential 2 Major Indices, 10 Analytical Ingredients, 1 Platform

HORIZONTAL AXIS

Innovation Index (II) is a measure of a company’s ability to develop products/services/solutions (with

a clear understanding of disruptive Mega Trends) that are globally applicable, are able to

evolve and expand to serve multiple markets, and are aligned

to customers’ changing needs.

INNOVATION INDEX ELEMENTS

• II1: INNOVATION SCALABILITY This determines whether an organization’s innovations are globally scalable and applicable in both developing and mature markets, and also in adjacent and non-adjacent industry verticals.

• II2: RESEARCH AND DEVELOPMENT This is a measure of the efficacy of a company’s R&D strategy, as determined by the size of its R&D investment and how it feeds the innovation pipeline.

• II3: PRODUCT PORTFOLIO This is a measure of a company’s product portfolio, focusing on the relative contribution of new products to its annual revenue.

• II4: MEGA TRENDS LEVERAGE This is an assessment of a company’s proactive leverage of evolving, long- term opportunities and new business models, as the foundation of its innovation pipeline. An explanation of Mega Trends can be found here.

• II5: CUSTOMER ALIGNMENT This evaluates the applicability of a company’s products/services/solutions to current and potential customers, as well as how its innovation strategy is influenced by evolving customer needs.

https://ww2.frost.com/research/visionary-innovation/

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Slide 1 Slide 2 Slide 3: Strategic Imperative Slide 4: Strategic Imperative Slide 5: Strategic Imperative Slide 6: Growth Environment Slide 7: Growth Environment Slide 8: Growth Environment Slide 9 Slide 10: Frost Radar™: Email Security, 2024 Slide 11: Frost Radar™ Competitive Environment Slide 12: Frost Radar™ Competitive Environment Slide 13: Frost Radar™ Competitive Environment Slide 14: Frost Radar™ Competitive Environment Slide 15: Frost Radar™ Competitive Environment Slide 16: Frost Radar™ Competitive Environment Slide 17: Frost Radar™ Competitive Environment Slide 18: Companies to Action: Companies to Be Considered First for Investment, Partnerships, or Benchmarking Slide 19: Company to Action: Check Point Slide 20: Company to Action: Check Point Slide 21: Company to Action: Check Point Slide 22: Company to Action: Check Point Slide 23 Slide 24: Key Takeaways Slide 25: Key Takeaways Slide 26 Slide 27: Frost Radar™: Benchmarking Future Growth Potential 2 Major Indices, 10 Analytical Ingredients, 1 Platform Slide 28: Frost Radar™: Benchmarking Future Growth Potential 2 Major Indices, 10 Analytical Ingredients, 1 Platform Slide 29: Legal Disclaimer