Cyber Security Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Cyber Security Category Overview

The cyber security category is anticipated to grow at a CAGR of 12.3% from 2023 to 2030. With a 34.9% share in 2022, North America dominated this category. Numerous prominent data breach incidents have recently made headlines between 2021 and 2022. Threats to company security exposed potentially millions of Americans' sensitive information, including usernames, passwords, and credit card data at organizations such as Yahoo!, Uber, and Target. It is imperative that even the world's largest companies remain vigilant about security vulnerabilities since hackers and cybercriminals develop new ways to access sensitive systems. Hence, there is an increased demand for cyber security experts and information security professionals worldwide. This is in turn driving the category growth significantly.

The fact that most companies simply cannot risk a breach of information is one of the primary reasons the cyber security industry is expanding. According to the IBM data breach report in 2023, the average global cost of a data breach in 2023 amounted to USD 4.45 million. This is an increase of 15% from the previous three years. A sum that can force many companies to shut down. According to IBM estimates in the same report, in reaction to a breach, 51% of firms intend to boost security spending on technologies for threat detection and response, personnel training, and incident response (IR) preparation and monitoring. Compared to organizations that do not utilize security artificial intelligence and automation substantially, organizations that do use it on a regular basis save an average of USD 1.76 million. Only 28% of organizations adopted notable use of security AI, which minimized costs and expedited containment in 2023. 

The top trends in the cyber security industry include advancements in cloud security, Ransomware as a Service (RaaS), IoT, and cyber threat intelligence solutions. IBM 2023 report shows that data stored in the cloud was involved in 82% of breaches. According to Statista’s 2023 report, more than 72% of organizations fall prey to ransom attacks. IBM 2022 estimates show that it takes about 49 days to detect a ransomware threat. The importance of cloud security services is growing as a result of remote employment, outsourcing, and expanding mobility trends. Also, a steady rise in RaaS platforms will be observed over the coming years. The most noteworthy example was when the governments of Australia and Costa Rica were victims of one of the largest ransomware attacks in 2022.

The category is highly fragmented and disorganized. The government and electoral security measures are complicated by the category’s fragmentation globally. The most notable instance was the U.S. presidential election in 2020. Due to the increasing amount of information breaches and threats, companies are trying to find solutions that safeguard data as it travels across clouds, databases, applications, and services while also enabling visibility across hybrid environments. On the other hand, in the European region, the fragmentation in the cyber security category is a major obstacle hindering the EU's ability to scale up. This in turn forces cyber security companies to seek alternative markets to expand. Although the EU recognizes the significance of cyber security legislation, it still falls behind other competitors worldwide in terms of establishing a cohesive ecosystem and offering avenues for investment in this category. All these factors reduce the bargaining power of the suppliers.

The primary costs associated with this category are the cost of salaries for cyber security experts, software/application development, hardware, network and servers, maintenance and upgrades, facilities, deployment type (cloud, on-premises, or offshore), and others. Other costs can include training and development, utilities, tax, random testing, checks, etc. Security accounts for 11 - 13% of companies' IT budgets. The average cost of cyber security amounts to USD 2,000 (approx.) per full-time employee or roughly 0.5% of the total revenue generated annually. A few factors that affect the total cost of cyber security include industry type, number of employees, hardware or software technology type used, compliance and mandates, pre-existing security measures, firewalls, audits, etc. The cost of firewalls can range between USD 400 – 6,000. Leading cost-saving strategies in this category include using a DevSecOps methodology and performing penetration and application testing.

The Global Insurance Market Index 2023 report estimate shows that the prices of cyber insurance globally slowed in Q1 2023 in the U.S., with average price increasing by just 11% as opposed to 28% rises during Q4 2022. Adjustments in the two largest international markets, the U.S. and the U.K., were the driving force behind the moderation. Greater competition, better cyber security measures, and a decrease in recorded ransomware attacks in 2022 were among the main causes of the mild change.

The most common types of pricing models adopted include a licensing-based model, a cloud-only SaaS model, or all-inclusive models. With all-inclusive models, companies can take advantage of the predictive nature of SaaS, while deploying the software in a flexible and cost-effective manner. Cyber security operations are outsourced (partial or hybrid outsourcing) by many companies to achieve better cost savings and higher effectiveness. An important development is the growing utilization of managed security service providers (MSSPs). In hybrid models, strategic responsibilities are often handled by in-house security executives, managers, and senior experts while lower-level tasks, including monitoring, are handled by MSSPs. The most preferred countries for outsourcing cyber security are India, Singapore, China, Vietnam, and Sweden. 

Cyber Security Procurement Intelligence Report Scope