There has been no shortage of analyst research lately pointing to the ongoing boom within the cyber security market, which is only expected to reach new heights as organisations tackle a dynamic threat landscape accentuated by the remote work trend triggered by COVID-19.
The demand for cyber security products and services is clear and unequivocal.
Analyst firm Canalys, for example, said earlier this year that cyber security spending soared globally by 10 per cent to hit US$53 billion last year.
Indeed, the segment outperformed all other IT segments except business continuity and workforce productivity, which took precedence during the pandemic, according to Canalys.
Now, another analyst firm, GlobalData, has taken a somewhat different approach to highlighting the rapidly increasing demand for cyber security services from the business community.
Perhaps most importantly, GlobalData’s research also showcases what an essential and intrinsic role cyber security is playing across business as its importance works its way up the corporate ladder to the boardroom.
Mentions of ‘cyber security’ in global companies’ earnings transcripts have largely been on the rise since the second quarter of 2020, according to GlobalData, with nearly 33 per cent growth in the first half of 2021 compared to the same time last year.
According to GlobalData's research, in companies’ quarterly and annual reports, discussions around cyber security-related risk mentions were up by around 30 per cent in 2020 compared to 2019, while it was up in the first half of 2021 by 2 per cent compared to the corresponding six-month period in 2020.
“The 2020 digital boom got everyone talking about cyber security,” said Rinaldo Pereira, business fundamentals analyst at GlobalData. “Firms are now discussing tech themes such as cloud and big data much more regularly, and deals and M&As [mergers and acquisitions] in this area are also frequently on the table.”
According to GlobalData’s M&A in Tech, Media & Telecoms (TMT) report, cyber security was one of the primary themes driving M&A in the TMT sector during the first half of 2021.
“The lasting shift in digital operations of both business and consumers, coupled with the rising incidences of data breaches, are driving mentions of ‘data security’, ‘cloud security’ and ‘network security’ in 2021 earnings transcripts,” Pereira said.
“[The] World Bank’s August 2021 announcement of a Global Cybersecurity Fund is likely to drive more discussions around safer digital transitions, M&A and investment, with the rising complexity of cyber attacks,” he added, referring to recent efforts by the international financial institution to ensure a more substantial reflection of cyber security considerations across World Bank programs and financing.
The new multi-donor trust fund, developed as an associated trust fund under the broader Digital Development Partnership Umbrella (DDP), aims to support the development of global knowledge on cyber security solutions for low- and middle-income countries.
It will also fund country maturity assessments, offer technical assistance, and support training and capacity development for cyber security staff in World Bank client countries.
“COVID-19 has highlighted the vital role digital technologies and applications play in a resilient development agenda,” said Boutheina Guermazi, director of the World Bank’s Digital Development Global Practice, when the fund was launched in mid-August. "It keeps people, businesses, and public services connected.
“As governments are rapidly scaling up their investments into digital technologies, cyber security has become a pressing concern to ensure a safe and secure digital transformation for all,” she said.
Against this backdrop, and along with the broader increase in cyber security demand among industry, cyber security and the lexicon that accompanies it are being discussed at the top levels in the corporate world in ways they never have before.
“‘Malware’, ‘ransomware’ and ‘breach’ were some of the top keywords in cyber security discussions in 2021 earnings transcripts,” Pereira said. “Companies are looking at procuring or investing in cyber security services to avoid future attacks.
“The trend of posted jobs related to cyber security in Q1 and Q2 2021 is a positive sign,” he added.
For IT service providers looking to further build out or establish a cyber security practice to capture some of the burgeoning opportunities, Canalys has come up with no fewer than eight common characteristics that it reckons all successful cyber security partners claim.
And building out a dedicated cyber security practice was, unsurprisingly, one of the traits.
Here's the full list of the eight common traits seen across the group of successful cyber security provider partners observed by Canalys:
- Offer a comprehensive suite of cyber security technologies
- Is dedicated, or have a dedicated division focused on security
- Primarily sell to senior leadership within client base
- Possess a deep understanding of customers’ IT environments
- Can design and implement cyber security policies for clients
- Provide a full suite of managed services
- Operate a security operations centre
- Currently recruiting to support cyber security practice