Overview:
According to Gartner, global cybersecurity & risk management spending is forecasted to grow by c.12.4% to $150bn in 2021. Rapid and widespread adoption of remote work has created an increased demand for cybersecurity services.
Cybersecurity consulting and managed security services collectively remains the largest sub-segment, with a projected market size of c.72bn in 2021. Other fast growing sub-segments include cloud security, data security and identity and access management (IAM).
In this article, we discuss some of the key trends driving growth in the cybersecurity industry.
Increased attacks on cloud services:
The average total cost of data breaches has grown by c.6.0% to reach $4.41m with the number of cyber incidents rising globally.
Due to this, companies will continue to rely on Cloud Access Security Brokers (CASB) to help in mitigating security risks from interactions between SaaS applications and unmanaged devices.
Companies like Netskope, McAfee, Microsoft, Proofpoint and Symantec will be key beneficiaries of this trend.
Rise of Secure Access Service Edge (SASE):
Secure Access Service Edge is a cloud-based security model which combines software-defined networking with network security functions to support the complex needs of cloud services like Software-as-a-Service (SaaS).
SASE helps address the emerging networking and security needs as users, devices, application, services and data are shifting out of the enterprise data center. It eliminates the need for legacy security systems like VPNs and firewalls and gives more control over their network security policies.
Gartner projects that 60% of software-defined WAN (SD-WAN) customers will shift to SASE by 2024, compared with c.35% in 2020.
Notable M&A deals in the cybersecurity space since Jan 21:
The rising cybersecurity spending has led to an upsurge in M&A activity with several strategic acquisitions and private equity transactions.
1. Accenture acquired Openminded.
2. Thoma Bravo acquired Proofpoint.
3. STG acquired McAfee's Enterprise Business.
4. Wipro acquired Ampion.
5. LogRhythm acquired MistNet.
6. Apax Partners acquired Herjavec Group.
7. Atos acquired Infidem.
8. Accenture acquired Real Protect.