The Enormous Market for Compliance Solutions – Here to Stay?

What market has grown 18%, 21% or 40% over the past three years? The Compliance Market! I don’t know which statistics to believe, but what I do know is that whether it is 18% or 40%, the bottom line is that Compliance as an industry has grown immeasurably during an extremely difficult business climate for almost every other global industry.

Some research firms estimate the market size at $21 billion while others who look at specific niches suggest GRC software is a $1.4 billion market on its own. No matter how you define it or which market pundits are correct – Compliance is big business, it is growing rapidly and it is here to stay.

If you Google Compliance the alphabet soup of acronyms that present themselves can be overwhelming. Starting with GRC (Governance, Risk & Compliance) as a category and quickly moving to OSHA, HIPPA, SOX, ADA, AML, FINRA, EPA, PCI and dozens of others. It is amazing anyone can get any work done given the “red tape” that accompanies almost every corporate action. The sad truth is that while we have certainly had an explosion of new regulators and regulations of late, it doesn’t appear to be slowing any time soon. More importantly, we have demonstrated over time that the regulatory burden rarely if ever scales back. Once we establish requirements and reporting, they tend to stay in place for a very long time.

The good news is that many entrepreneurial companies have identified this market opportunity and the solutions & services now available to CFOs, CIOs and Chief Compliance Officers is unprecedented. In light of the growth rates and the size of the market, many large technology, consulting and outsourcing companies are seeking strategic acquisitions that can give them market share, leadership and access to this market. Not to be outdone by the large corporates, the Private Equity community has identified these same trends and capital is being put to work both as growth equity and buyouts.

Stay tuned for more to come about both the opportunity and the deal activity that we expect to see accelerating in the coming months.