Strength of the cybersecurity market in the overall tech economy

As the digital economy expands, so does cybercrime. As cybercrime attacks increase in volume and sophistication, so organizations spend more on cybersecurity in an effort to combat the attacks.

Rising cybercrime statistics

 If the current trends continue, damage from cyberattacks will reach about $10.5 trillion in 2025. That is 300 percent higher than the 2015 numbers.

In 2021, organizations around the world spent around $150 billion on cybersecurity. This figure has been increasing annually by over 12%. But the increase in spending is not keeping up with the number and strength of the attacks.

Opportunity for cybersecurity vendors

In an article for McKinsey & Company, Bharath Aiyer, Jeffrey Caso, Peter Russell and Marc Sorel point out the huge gap and therefore market opportunity that exists between customer demands and cybersecurity products and services delivered. “The global cybersecurity total addressable market may reach $1.5 trillion to $2.0 trillion, approximately ten times the size of the vended market.” In other words, if vendors were able to meet the demands of enterprises and small to medium businesses for cybersecurity products and services, the market could reach ten times its current level.

The McKinsey article goes on to list five key reasons for the huge cybersecurity potential.

1. More attacks targeting smaller companies.
2. Tightening regulations regarding how organizations handle and report cybercrime.
3. CISOs working hard to boost log visibility.
4. Talent shortages. Buyers expecting services to come bundled with products.
5. Greater engagement o the part of customers.

The entire article, written from the viewpoint of the opportunity presented by the state of the cybersecurity market today, is well worth reading for anyone providing cybersecurity solutions. It can be found here https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/cybersecurity/new-survey-reveals-2-trillion-dollar-market-opportunity-for-cybersecurity-technology-and-service-providers

Cybersecurity statistics also on the rise

A report by Strategic Market Research predicts that the global cybersecurity market will witness a compound annual growth rate (CAGR) of 9.5%, valued at $216,1 billion in 2021 and expected to reach $478.68 billion by 2030.

The largest vertical market is healthcare/medical.

The largest geographical market is North America.

The general consensus about the cybersecurity market and its position in the overall economy is that it is a very rapidly growing market that is being underserved due to the complexity of solution required to prevent successful attacks as these become more numerous and sophisticated, and due to the shortage of cybersecurity talent.

Cybersecurity directions

McKinsey provides the following insights:

“For providers, the message is clear. Current market dynamics give them a chance to boost their penetration of both existing accounts and the unvended space. This growth will be spurred by an evolving threat landscape and talent shortages—a gap of at least 600,000 in the United States alone.  To maximize the opportunity, we see potential for action on four fronts.”

The four fronts listed are

1. Accommodating and specializing in hybrid and multicloud architectures.
2. Correct pricing for SMBs and midmarket companies.
3. Improvements in automation, AI and machine learning as they relate to cybersecurity.
4. Increase provision of managed services, including to midmarket and SMBs.

There are many other dynamics to the cybersecurity market which we will cover in separate articles. We wanted to answer the basic question: “What’s happening with the cybersecurity market in relation to the economy as a whole?” Now you know. It’s a rapidly expanding market with huge opportunities and currently underserved.