Cyber security is a money intensive industry. In 2013, Americans spent 79 billion US dollars for cyber security, when the cybersecurity expenditure for the rest of the world was only 83 billion US dollars at the same time. For the US, this figure gradually increased to 109 billion US dollars in the beginning of 2016 due to increased awareness and threats.
There a number of reasons as to why cyber security is important in the US, especially in today’s advanced technology scenario:
- Hacks into large companies lead to loss of revenue and public trust
- 7% of organizations in the US lost at least 1 million US dollars from cyber crime in 2013 alone
- Companies rely on IT systems to protect and relay sensitive information
- E-commerce is a vital platform in the US that transmits billions of dollars worth of transactions
- 68% of Americans believe that cyber security is important, especially when money and identity theft are on the line
Cyber Security: A Growing Factor across Industries
Due to certain crimes that were committed online, US companies have greatly increased their budgets in cyber security to guarantee that the information they store is safe and protected. Every time a cyber crime is committed, it costs millions of dollars.
Research done on a sample of national and multinational companies in 2014 in the US shows that the average costs per company of Cybercrime can be substantial:
- Utilities and Energy – Approximately USD 27 million. This industry is a common target for hackers since it has the potential to disrupt the US economy and their weak defenses.
- Defense – Around USD 22 million.
- Financial services – USD 20 million. This sector is often targeted by hackers. Thus, 2, 500 US dollars per employee is invested in cyber security and 5.5% of the industry’s IT budget is dedicated to it.
- Technology – About USD 14 million.
- Communications – Approximately USD 13 million.
- Transportation – USD 10 million.
- Services – USD 9 million.
- Retail – USD 8 million, players invest 400 US dollars per employee in cyber security and devote 4% of their IT budget in cyber security.
- Industrial – USD 8 million.
- Education – USD 8 million.
- Public Sector – USD 8 million. According to Chief Information Officers, 75% of sector players feels that cybersecurity is a top priority and they would gladly increase the expenditure to support the initiatives.
- Consumer Products – USD 7 million.
- Health Care – Around 6 million US dollars. This industry allocates its largest share of IT budget to cyber security at 5.6% compared to other industries.
Increase in Government Expenditure on Cyber Security
Between 2006 and 2013, the Federal Government spent USD 78.8 billion on cybersecurity measures under the Federal Information Security Management Act of 2002.
Even though there have been budget cuts in IT due to the Budget Control Act in 2011, the US Government under President Obama is committed to steady investment in cutting edge technology towards cyber security under the Comprehensive National Cybersecurity initiative.
Top company investors in Cyber Security
The most active company investors in cyber security in the US are:
- Intel Capital
- Google Ventures
- Qualcomm Ventures
- Juniper Networks
- NTT DoCoMo Ventures
- Siemens Venture Capital
There are 20 major global players in cyber security, and 15 of these firms are located in North America, namely:
- Northrop Grumman
- Booz Allen Hamilton
- Computer Sciences
- Cisco Systems
- General Dynamics
- L-3 Communications
- Lockheed Martin
- Palo Alto Networks
An Increase Growth in Encryption Demand for the Most Common Measure
Perimeter Controls and Firewalls are the most common cyber security measures. However recently there has been an increasing demand in encryption due to advanced criminal techniques. There is a need for a holistic approach to preventing or stop these.
As a way to secure multiple devices on their networks, certain companies have opted to use access governance tools that govern identity, data, and privilege aspects. Other cyber security solutions that offer a wide range of services that can be easily incorporated into existing networks are also being deployed.
Due to the advancement of cyber crime and cyber hacking, the US has recognized the importance of cyber security, catapulting their cyber security market to a global leadership position. For as long as the technology is advancing, the evolution of cyber attacks and hackers will continue and therein lies the business opportunity.
For more information on the US cyber security market, familiarize yourself with updated market research to identify detailed opportunities in this sector.