Smart bettors might want to double down on cybersecurity. The latest forecast from Cybersecurity Ventures predicts worldwide spending on cybersecurity will exceed $1 trillion from 2017 to 2021. The projections, published recently in its Q2 2016 Cybersecurity Market Report, are driven by a huge increase in the costs suffered by businesses and governments globally as a result of cybercriminal activity.
It was only a year and a half ago when British insurer Lloyd’s reported that cybercrime was costing businesses $400 to $500 billion annually. Later in 2015, Juniper Research upped those numbers, stating the rapid digitization of consumers’ lives and enterprise records will increase the cost of data breaches to $2.1 trillion globally by 2019. Microsoft’s CEO, Satya Nadella, trumped both of those reports and estimated $3 trillion of market value was destroyed in 2015 as a result of cybercrime.
Cybercrime has risen by an order of magnitude over the past five years, and the IT analyst reports haven’t kept up. To be fair, tracking cybersecurity spending may be the most difficult IT category to track. Security embeds into all IT categories and is not always broken out on its own. Plus, it crosses into non-IT centric markets that include aviation, automobiles and other markets that also embed security solutions. Then there’s the billions of IoT (Internet of Things) devices with embedded security (and more often, unprotected), which has spawned a whole new genre of vendors.
Some noteworthy figures from the Q2 2016 Cybersecurity Market Report, which tie to the cybersecurity spending trend include:
- J.P. Morgan Chase & Co. has doubled its cybersecurity budget from $250 million to a half-billion annually.
- Bank of America states it has an “unlimited budget” when it comes to combating cybercrime.
- The U.S. government has increased its annual cybersecurity budget by 35 percent, to $19 billion in 2017.
- IBM Security, now a $2 billion+ business, grew by 18 percent in Q1 2016, according to Investor’s Business Daily.
- BI Intelligence estimates $655 billion will be spent on cybersecurity initiatives to protect PCs, mobile devices and Internet of Things (IoT) devices between 2015 and 2020. BI breaks down the forecasted spending as follows: $386 billion spent on securing PCs; $172 billion spent on securing IoT devices; and $113 billion spent on securing mobile devices. Those numbers don’t touch on some large spend categories, which include cloud security, cyber analytics, risk management, professional services and others.
If $1 trillion over the next five years sounds big, then consider in 2004 the global cybersecurity market was worth just $3.5 billion – and by 2015 it had reached $75 billion. If the cybercrime epidemic continues, then by 2020 we might be looking at a multi-trillion dollar market.
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.