- December 6, 2022
- Posted by: admin
- Category: Uncategorized
According To A New Survey, The Market For Cybersecurity Products And Services Is Worth $2 Trillion
Cybercrime is increasing alongside the digital economy. Numerous attack opportunities are being produced by the growing amount of online and mobile interactions. Many results in information security breaches that put both persons and organizations in danger. By 2025, damage from cyberattacks will total over $10.5 trillion yearly, a 300 percent increase from 2015 levels if development continues at the current rate.
Organizations all throughout the world spent $150 billion on cybersecurity in 2021, an increase of 12.4% annually as a result of this cyber onslaught. 2 Even this “security awakening” is probably insufficient given the scope of the issue, though. Threat volumes are forecast to nearly double between 2021 and 2022, according to a survey of 4,000 midsized businesses. 3 Nearly 80% of the threat groups that were detected in 2021 and more than 40% of the malware that was observed were brand-new, according to the survey. These factors suggest that there is a large market opportunity. The limitations of currently offered commercial solutions in terms of automation, pricing, services, and other capabilities—which this article will go into greater depth about—prevent them from fully satisfying client requests. The $150 billion vended market and a fully addressable market are hence far apart in size today. A whopping $1.5 trillion to $2.0 trillion addressable market exists given the current penetration of security solutions at around 10%. (Exhibit 1). This does not indicate that the market will grow to this big any time soon (the current growth rate is 12.4% yearly from a base of about $150 billion in 2021), but rather that such a significant gap requires providers and investors to “unlock” greater effect with customers by better fulfilling the requirements of underserved areas, constantly upgrading technology, and decreasing complexity—and the current buyer climate may present a unique opportunity for innovation in the cyberspace.
On the surface, it appears that the adoption of cybersecurity products and services by organizations is the cause of the under-penetration of those products and services, which raises the possibility that many, if not most, chief information security officers (CISOs) have inadequate budgets. By updating their capabilities and reevaluating their go-to-market plans, cybersecurity companies must rise to the challenge.
The market’s influencing variables, the most promising market segments, and the services consumers require must all be understood by service providers if they are to take full advantage of the opportunity. These four topics—cloud technologies, pricing structures, artificial intelligence, and managed services—especially in the midmarket—are those that are most likely to be the subject of such debates. Cybersecurity providers can succeed with these types of strategic planning and a forceful implementation strategy.
Expanding possibilities for the cybermarket
Why does the potential in the cybermarket right now seem so great? Five major factors are present.
Fast-expanding smaller businesses are subject to an ecosystem of expanding digital touchpoints and relationships from a demand standpoint. And while it frequently does for huge corporations, malware like ransomware can pose an existential danger to small and midsize businesses (SMBs) and midmarket companies. At a smaller company, a big, overt disruption is frequently caused by what would otherwise remain a silent breach. One Texas-based midsize steel structure company, for instance, was compelled to file for bankruptcy in May 2019 after ransomware irreversibly encrypted both its tools and financial accounting software. Information retrieval and recovery services are quick and challenging, whereas ransoms may be out of reach. Furthermore, if a corporation has violated a customer’s confidence, it may be challenging to regain that trust. Indeed, in the previous 12 months, almost 10% of respondents in a McKinsey study on the significance of digital trust reported ceasing to do business with a provider after learning of a data breach.
In order to take advantage of primitive security tools, thieves frequently target midmarket companies. These businesses, for instance, might overlook dangers like the US National Security Agency’s EternalBlue exploit, which the Wannacry ransomware later employed. Because they only have one backup, many smaller organizations are vulnerable to ransomware assaults like those from PureLocker.
Even SMBs and midmarket businesses that don’t currently employ or engage a security team have a need to take action due to the prevalence of ransomware attacks that target these organizations.
The motivation for regulation
More than 250 bills or resolutions that include a substantial cybersecurity component have been introduced or are being examined in at least 45 states and Puerto Rico.
The US National Defense Authorization Act, Executive Order 14028, and the expansion of the False Claims Act to cover false representations about an organization’s cybersecurity program and credentials are examples of federal initiatives.
Federal cybersecurity contracting regulations are slowly filtering down to thousands of SMB and midmarket contractors, according to client dialogues at McKinsey. New guidelines for breach reporting are being discussed by the US Securities and Exchange Commission (SEC). The complexity of compliance challenges increases as ecosystems develop. For instance, the Cybersecurity Maturity Model Certification (CMMC) from the Department of Defense emphasizes the crucial importance of comprehensive cybersecurity, most of it out of the reach of SMBs and the general public.
The laws are similarly strict everywhere in the world. For instance, organizations that violate the General Data Protection Regulation of the European Union could be fined up to 4% of their global revenue.
The (log) visibility gap is still a critical concern for CISOs.
Companies have increased their share of total log volume visibility during the past three years from, on average, approximately 30% to roughly 50%, and are aiming for 65 to 80% over the following three years (Exhibit 2). Small and medium-sized businesses (SMBs) and the midmarket have been slightly more active than bigger firms, and future development in visibility use cases is anticipated to be stronger among these smaller businesses. SMBs anticipate expanding the usage of end-point detection and response (EDR) tools, utilizing single panes of glass to ingest and monitor their cloud environments, and relying on managed-service partners (such as managed detection and response service providers) for increasingly complex tasks.
The enormous distance that the slowest-moving businesses are lagging their faster-moving competitors is an unexpected feature of the current market landscape. Enterprises in the bottom quartile claim to have improved their log volume visibility by only 6% over the previous three years and anticipate a modest 7% improvement over the following three. Comparatively, the top achievers, notably in the SMB market, have improved their log coverage by between 25 and 35 percent over the last three years, and they intend to speed up their efforts during the following three.
Lack of talent and service offerings
As CISOs and talent partners struggle to fully staff their organizations, a current global shortage of cyber talent has given rise to new growth opportunities for service providers. This shortage has been exacerbated by the intensification of digital threats like ransomware during the COVID-19 pandemic. Demand for vended solutions is also increasing due to structural dynamics. Customers want items to be coupled with options that ensure both short-term and long-term services (such as implementation), as businesses expand their protections (ongoing security).
IT administrators frequently have little choice but to conduct business with outside service providers due to a global dearth of cybersecurity personnel.
The final word? Forecasted variations in assigned security spending as a proportion of services between internal and third-party services are rising across all segments. Outsourced services are crucial for businesses that need to ensure solid security outcomes as long as the talent shortage persists.
An increase in customer engagement.
Many firms that needed cyber protection weren’t doing everything they could to address the problems they faced until lately. They frequently believed there was less need for action because of the cost and complexity involved. Currently, the risk-benefit analysis has changed as attacks increase in frequency. Opportunities exist for both providers and investors as security and privacy issues are moving up the C-suite across industries, regions, and businesses of all sizes. Prices and packages, regional coverage, target consumer segments, integration, and off-the-shelf analytics all present opportunities for innovation.
Cybersecurity providers now have a compelling potential as a result of the global economy’s continued digitization, the rise in cyberattacks, and regulatory pressure on businesses to protect their customer data. SMBs and midmarket players are concentrating on installing more advanced solutions due to a lack of talent and a need to increase log visibility.
Providers should take advantage of the market’s anticipated billion-dollar revenue influx over the next three years. To achieve this, midmarket-friendly solutions must be developed through maximizing cloud engagement, creating a price model for the midmarket, embracing innovation, and extending managed-service options. In a nutshell, it refers to identifying profitable combinations of goods, prices, and services that suppliers may customize for specific market groups and are adaptable enough to grow. In order to boost its penetration across segments and compete for the $2 trillion jackpot, the industry must first start by addressing these issues.