Cyber Security Services Market Size, Share & Trends Analysis Report By Service Type, By Professional Services (Penetration Testing, Training, Consulting & Advisory), By Managed Services, By Industry Vertical, And Segment Forecasts, 2021 - 2028

Report Overview

The global cyber security services market size was valued at USD 91.15 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 10.2% from 2021 to 2028. Advances in Artificial Intelligence (AI), Machine Learning (ML), and the Internet of Things (IoT) have led to increased adoption of web applications and mobile apps, subsequently creating more complex IT infrastructure that can be vulnerable to cyberattacks. To address potential security challenges, organizations are outsourcing security services to detect bugs, as well as analyze the security landscape, while efficiently responding to cyberattacks. The need to fix bugs in web applications as well as mobile apps, and to mitigate data loss risks associated with cybercrimes is expected to fuel the adoption of cyber security services over the forecast period.

The proliferation of smartphones and the continued rollout of high-speed internet networks have triggered the adoption of mobile banking apps and apps for health monitoring, shopping, and socializing. Mobile banking induces flexibility in banking practices by allowing users to transact irrespective of their location. Customers can also shop using e-commerce apps and make payments using their smartphones. As the number of smartphone users continues to increase, the preference for banking, shopping, making payments, and socializing via mobile apps is also growing. However, all these applications have also emerged as potential targets for hackers; thereby prompting companies to opt for cyber security services to identify loopholes in the applications, plug the loopholes, and subsequently save users from potential losses.

The number of cyberattacks worldwide shows no signs of abating. At the same time, cyberattacks are getting more sophisticated and the losses stemming from cyberattacks are also increasing. While new networks are being rolled out and existing networks are being expanded, these networks are increasingly becoming vulnerable to cyber threats. This is driving the need for monitoring the networks, critical infrastructures, and digital assets of both small and large enterprises and hunting for potential threats continuously.

Moreover, the instances of cybercrimes are rising in line with the proliferation of digital assets and connected devices. Internet-connected devices are particularly vulnerable to cyber threats. Social media interactions are equally vulnerable to cyber threats and can potentially expose individuals to privacy invasion risks. Privacy threats are particularly increasing as intruders remain keen on acquiring the personal information of individuals through unauthorized access. Penetration testing and bug bounty services help in ensuring that applications are free from bugs and IT infrastructure is in line with the existing enterprise cyber landscape.

While several enterprises are aggressively adopting remote working policies in the wake of the outbreak of the COVID-19 pandemic, cyberattacks on enterprise data and devices are also on a rise. The outbreak of the pandemic has particularly compelled companies to adopt the Work From Home (WFH) policy in line with the guidelines issued by various governments to ensure the safety of their employees. However, this operational change has exposed the infrastructure to vulnerabilities, particularly due to the increased use of cloud services via unmanaged devices. The risk is particularly significant for financial institutions, educational institutions, manufacturing units, and IT companies, thereby driving the need for changing the security delivery models. As such, the ongoing pandemic is expected to encourage enterprises to assess their IT infrastructure and opt for robust cyber security services, thereby driving the growth of the market over the forecast period.

Service Type Insights

The professional services segment dominated the market in 2020 and accounted for a market share of more than 72.0%. Professional security services majorly cover business support, technical management services, advisory, consulting and training, and incident readiness and response services. The need for a single point of contact and reliable technical support during the deployment of security solutions is one of the factors contributing to the growth of the segment. Furthermore, the growing need to manage data efficiently, prevent data losses in the event of a breach, and avoid the costs related to data losses and regulatory violations is emerging as another other major factor contributing to the growth of the segment and opening opportunities for offering consulting and advisory security services that can potentially help in developing data loss prevention strategies.

The managed services segment is expected to register the highest CAGR of around 11.0% over the forecast period. The evolving threat landscape and the hardships in managing every aspect of the cyber threat landscape in-house are prompting organizations to partner with Managed Security Service Providers (MSSPs). Partnering with MSSPs ensures access to advanced security solutions as well as to threat hunting specialists and security experts and helps organizations in monitoring threats in real-time. The growing need among organizations to defend and respond to advanced, persistent threats is driving the demand for managed security services.

Professional Service Insights

The training, consulting, and advisory segment dominated the cyber security services market in 2020 with an overall market share of more than 39.0%. Businesses can typically face a myriad of challenges ranging from the implementation of solutions to managing the regulatory requirements. Regardless of size, every enterprise essentially requires cyber security consulting professionals to manage sophisticated data security threats. Consulting and advisory vendors work alongside the organizations and align security practices and policies for the organizational objectives and goals.

The penetration testing segment is expected to register a CAGR of over 21.0% over the forecast period. Organizations opt for penetration testing services to identify the weaknesses of their infrastructure and applications, gauge the effectiveness of the existing controls, discover new bugs, and test applications that are at the risk of potential cyberattacks. Identifying vulnerabilities helps organizations in addressing the loopholes and annulling the potential threats to enterprise software, hardware, and overall IT infrastructure. Internal and external threats and cyber breaches are particularly necessitating the adoption of penetration testing services. At the same time, incumbents of various industries are shifting toward digitalization by launching web-based applications to run their businesses. However, this paradigm shift has exposed them to potential cyberattacks, thereby leading to an increase in the demand for penetration testing cyber security services.

Managed Services Insights

The Managed Detection Response (MDR) segment is expected to register the highest CAGR of 22.4% over the forecast period. MDR is a managed service outsourced by organizations for threat hunting and responding to discovered vulnerabilities. MDR services envisage identifying malware and tracking malicious activities. A rapid incident response service is also provided to remediate the cyberattack. MDR engineers help companies in understanding the system's weaknesses and also provide mitigation recommendations, root cause analysis, and toolkits to deal with cyberattacks. MDR services also include protection at early stages and on a real-time basis in the event of a cyberattack. Such benefits of MDR services are expected to emerge as another factor contributing to the growth of the segment.

The compliance and vulnerability management segment within the managed services is contributing over 16.9% share in 2020. SMEs and large enterprises operate and deploy several applications across networks and, in turn, increase risks of several unidentified vulnerabilities within networks. Patching all the vulnerabilities is a complex task, and therefore, enterprises consult and outsource security vendors to help them develop vulnerability management strategies, ensuring them to address real-time risk vulnerabilities. Furthermore, as per certain regulatory standards, vulnerability management is one of the primary requirements. For instance, ISO 27001 is a standard that offers guidance on including vulnerability management along with security risk management and assessment. Therefore, the need to ensure meeting all the compliance requirements for cyber security and data protection is boosting the adoption of compliance and vulnerability management services.

Industry Verticals Insights

The defense/ government segment dominated the market in 2020 with an overall market share of more than 23.0%. The vulnerable confidential information regarding the country’s citizens and military strategies are at the highest risk of cyberattacks. Such information is always a prime target of unethical hackers. The large volumes of stored and processed on-premise and cloud data are necessitating the development and deployment of secure systems capable of countering any potential intrusion attempts by hackers. A looming shortage of skilled workforce and hardships in sharing internal information about vulnerabilities are particularly impeding the cyber security efforts across various government agencies. Hence, government agencies have been particularly trying to train and rely on the existing IT staff to avoid outsourcing to ethical hackers, given the confidentiality of the information stored and the time-sensitivity of the vulnerabilities. Nevertheless, crowdsourced bug bounty programs are conveniently available and readily adopted by government agencies.

The healthcare segment is expected to exhibit the highest CAGR of more than 11.2% over the forecast period. While healthcare services are being digitized aggressively, the growing adoption of technology-aided applications to maintain the records of patients, employees, and organizations has equally increased the risks of cyberattacks. Various standards, such as the NIST Cybersecurity Framework and ISO/IEC 800001, which mandate security measures for the healthcare IT system, which includes digital health applications, connected medical devices, and electronic patient records, among others, have already been implemented.

HIMSS Healthcare Security Forum is one such platform to bring awareness among healthcare and technology providers about the repercussions of medical device hacking and the advantages of bug bounty and AI in ensuring the security of medical devices. Meanwhile, the HIPAA standard 164.308(a)(8) puts a strong emphasis on the need to conduct a periodic technological evaluation, such as pen testing, to identify the potential weaknesses, which is also expected to drive the growth of the healthcare segment over the forecast period.

Regional Insights

North America accounted for an overall market share of more than 39.0% in 2020. The growing demand for cyber security services in North America is attributed to the aggressive spending on cyber security by the government and public authorities. The U.S. Department of Defense (DoD) has been leveraging white hat hackers' capabilities and using hacker-powered security in unique ways. For instance, Hack the Army targeted the DoD's operationally significant websites and identified over 400 bugs, which allowed them to earn USD 100,000 in total bounties. Moreover, the increased spending on security solutions and services by large enterprises and SMEs coupled with the increasing stringency in standards and policies for maintaining and securing data and protecting privacy is also expected to contribute to the growth of the regional market.

The Asia Pacific regional market is anticipated to register the highest CAGR of more than 16.3% over the forecast period. The aggressive efforts toward securing networks and identifying vulnerabilities are anticipated to contribute to the growth of the regional market. Asia Pacific is expected to offer numerous opportunities for adopting cyber security services, given the continued digitalization in India, Malaysia, Thailand, and Southeast Asian countries.

Developing countries, such as China and India, have strong defense forces, which are aggressively adopting cyber security services for mitigating threats against key resources as a result of the increasing awareness about cyber warfare disruption. In 2019, the Japanese government announced mass penetration testing of all IoT devices as part of the efforts to secure its vast technology landscape, a move that received mixed reactions from the Japanese population. Rapid economic development across various Asian countries is driving the adoption of penetration testing and bug bounty platforms for securing critical information related to the defense industry vertical.

Key Companies & Market Share Insights

The market for cyber security services can be described as a fragmented market characterized by the presence of multiple vendors offering various services, such as testing, threat detection, threat hunting, and regulatory monitoring, in the enterprise cyber security landscape. Vendors are aggressively pursuing various strategies, such as strategic partnerships, as part of the efforts to contribute toward safer cyberspace, improve their service capabilities, and extend their user base. For instance, in January 2020, HackerOne partnered with OPPO, a mobile manufacturer. The partnership was aimed at further supporting the “Security Research Community” and reducing cyber risks. In October 2019, By Light Professional IT Services LLC., partnered with FireEye, Inc. to expand its EmberSec portfolio, which comprises managed services, such as Managed Detection and Response (MDR) security incident event management (SIEM), utilizing endpoint detection and response, email threat protection, and network security monitoring.

Competition in the market is intensifying continuously as increasing funding is allowing startups to make a foray into the market. New entrants in the market include various smaller technology vendors that are offering various services in the market. For instance, in August 2020, Cobalt raised USD 29 million in a Series B funding round to make its “penetration testing-as-a-service” platform available to more software vendors. Some of the prominent players operating in the global cyber security services market include:

• Accenture

• AT&T

• Atos SE

• Capgemini

• Cisco

• CrowdStrike

• Deloitte Touche Tohmatsu Limited

• DXC Technology Company

• IBM

• Rapid7

Cyber Security Services Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global cyber security services market report based on service type, professional services, managed services, industry verticals, and region:

• Service Type Outlook (Revenue, USD Million, 2016 - 2028)

  • Professional Services

  • Managed Services

• Professional Services Outlook (Revenue, USD Million, 2016 - 2028)

  • Integration

  • Support and Maintenance

  • Training, Consulting, and Advisory

  • Penetration Testing

  • Bug Bounty

  • Others

• Managed Services Outlook (Revenue, USD Million, 2016 - 2028)

  • Managed Detection Response (MDR)

  • Managed Security Incident and Event Management (SIEM)

  • Compliance and Vulnerability Management

  • Others

• Industry Verticals Outlook (Revenue, USD Million, 2016 - 2028)

  • IT & Telecom

  • Retail

  • BFSI

  • Healthcare

  • Defense/ Government

  • Energy

  • Manufacturing

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Mexico

    • Brazil

  • Middle East & Africa