Cybersecurity Ventures’ Q3 Cybersecurity Market Report has a revised forecast for total market growth as we head into the second half of 2015.
The worldwide cybersecurity market is defined by market sizing estimates that range from $77 billion in 2015 to $170 billion by 2020. This is up from the $155 billion by 2019 in the Q2 Cybersecurity Market Report.
Market research firm Gartner says global spending on IT security is set to increase 8.2 percent in 2015 to $77 billion, and the world will spend $101 billion on information security in 2018.
The cybersecurity market is estimated to grow to $170 billion (USD) by 2020, at a Compound Annual Growth Rate (CAGR) of 9.8 percent from 2015 to 2020, according to a report from Markets and Markets.
Million-dollar-plus cybersecurity deals (vendors selling to end users) are on the rise. In a recent research note, analysts at FBR & Co., an Arlington, Va.-based investment banking and M&A advisory firm, indicate that the number of seven-figure (cybersecurity) deals have increased by 40 percent year-over-year.
Some sneak preview info-grams from the Q3 Report which is expected to publish later this week:
Hot areas to watch
The aerospace, defense and intelligence vertical continues to be the largest contributor to cybersecurity solutions.
According to IDC, the hot areas for growth are security analytics / SIEM (10 percent), threat intelligence (10+ percent), mobile security (18 percent) and cloud security (50 percent).
Cyber crime
Cyber crime is on the rise. The British insurance company Lloyd’s estimates that cyberattacks cost businesses as much as $400 billion a year, which includes direct damage plus post-attack disruption to the normal course of business.
According to Verizon’s 2015 Data Breach Investigations Report, which analyzes security incidents that happened last year, the top five affected industries by number of confirmed data breaches were public administration, financial services, manufacturing, accommodations and retail.
Cyber insurance
The cyber insurance market has grown from $1 billion to $2.5 billion over the past two years.
Fortune recently reported that about 90 percent of cyber insurance is being purchased by U.S. firms, leaving other companies around the world exposed.
Labor shortfall
“The demand for the (cybersecurity) workforce is expected to rise to six million (globally) by 2019, with a projected shortfall of 1.5 million,” said Michael Brown, CEO at Symantec, the world’s largest security software vendor.
“The cybersecurity job market is on fire,” says Veronica Mollica, founder and executive information security recruiter at Indigo Partners, Inc. in Fairfield, Conn. “Our candidates are facing competing offers from multiple companies with salary increases averaging over 30 percent. Current employers are scrambling to retain talent with counteroffers including 10 percent and higher salary increases for information security team members to remain on board,” adds Mollica.
Corporations are looking to next-generation technologies such as behavioral analysis to help address the cybersecurity talent shortage. “Signature-based security products fire hose an endless stream of insignificant alerts and false positive alerts to the SOC (security operations center), overwhelming the staff,” said Steve Hunt, president and COO of DB Networks. “The lost time and productivity of that approach is staggering. Behavioral analysis is field proven to be extremely accurate in identifying attacks and substantially reducing false positives, resulting in far less staffing requirements.”
Managed security services
Market intelligence from ABI Research, based in Oyster Bay, N.Y., finds that the global managed security services market will be worth $15.4 billion (USD) by the end of 2015 and grow to $32.9 billion by 2020.
ABI Research says most organizations lack the security expertise to manage security solutions from a wide variety of vendors. Rising threats, government regulations and a lack of internal resources are driving businesses to turn to managed security service providers (MSSP) that offer expertise and dedicated security personnel.
Venture capital
The Wall Street Journal Venture Capital Dispatch said that in 2014 U. S. venture capitalists invested $1.77 billion, a record amount, into privately held cybersecurity companies, topping the previous record of $1.62 billion set in 2000 during the dot-com boom.
Globally, venture-backed cybersecurity companies raised $1.9 billion last year – a record, according to Dow Jones VentureSource.
Steve Morgan is founder and CEO at Cybersecurity Ventures and editor-in-chief of the Cybersecurity Market Report and the Cybersecurity 500 list of the world’s hottest and most innovative cybersecurity companies. Follow Steve on Twitter or connect with him on LinkedIn.