The Global Defense Cybersecurity Market was valued at USD 16.22 billion in 2020, and it is expected to reach USD 28.53 billion by 2026, registering a CAGR of approximately 10.51% during the forecast period (2021-2026). The outbreak of the COVID-19 pandemic has rendered the military sectors in certain countries to meet with shortfalls of the looming budget. However, various governments across the world are looking to adopt cybersecurity automation solutions for their military applications by concentrating on reducing operating expenditures (OPEX) while maintaining adequate measures against cyberthreats.
- Further, with the increasing dependency of military organizations on the internet network, the frequency and sophistication of cyberattacks are on the rise. To counter all these vulnerabilities, there is a major focus on adopting cyber security solutions in the defense sector.
- Cyber threats are attempts based out of the internet to damage or disrupt information systems and hack critical information using various means, such as spyware and malware and by phishing. IT advancement, communications technologies have been changing the landscape of almost every country’s defense networks. However, with rapidly evolving technology comes rapidly advancing threats. Cybersecurity solutions help defense organizations to monitor, detect, report, and handle cyber threats to maintain data confidentiality.
- The defense industry has witnessed a dynamic change over the past decade. The growing advancements in information technology, upgradation of existing weapons with intelligence, surveillance, and increasing volume of classified data gathered from various systems have demanded the use of reliable and enhanced cybersecurity solutions for the defense industry.
- While factors such as growing severity of cyber attacks on military/government organizations and increasing government initiatives to secure critical data are driving the market growth, factors such as low defense funding priority in some countries coupled with the ROI metrics are anticipated to challenge the market growth.
- For instance, government budget planning and execution regarding the investment on defense in South Africa is very poor. Even in developing economies like India, where defense budget has been a priority over the years, the funding allocation is not adequate to modernize the infrastructure of armed forces. A significant hike in allocation was expected, but unfortunately did not happen. The defense budget in the country constitutes to only 13.73% of the central government's budget for 2021-2022.
Key Market Trends
Growing Severity of Cyber Attacks on Military/Government Organizations
- Attacks on governments, businesses, and individuals have increased on an exponential basis. Defense infrastructure is fast becoming a target of choice among both individual and state-sponsored cyber-attackers, who now acknowledge the value of disrupting security systems that were previously considered impenetrable.
- The increased adoption of machine-to-machine technologies in the aerospace domain and the focus of the governments on enhancing cyber security to counter cyber terrorism has led to the growth of the cyber security market in this sector in the past decade.
- The defense companies, such as BAE Systems PLC, General Dynamics Corporation, Finmeccanica S.p.A., are engaged in developing cyber security solutions in the defense industry, especially in designing network security solutions and software, to prevent cyber-attacks on military software systems, proving the increasing demand from the sector.
- Navigation and guidance systems can be highly susceptible to cyber-attacks, which can have widespread ramifications. Hence, the computers and networks for all the ground and air-borne operations need robust security infrastructure.
- The United States Department of Defense, recently issued final guidance for requiring activities to assess contractors’ System Security Plans (SSPs) asked them to strictly comply in helping the implementation of the security controls as mentioned in the in National Institute of Standards and Technology (NIST) to prevent any Cyber attacks on the critical systems of the state.
- Further, countries like India have also started investing heavily in developing cyber security systems to protect critical data. Indian Government recently decided to set up the Defence Cyber Agency which will work in conjunction with the National Cyber Security Advisor. Its focus will be limited to military cyber-issues, and it would include as many as thousand personnel from all three branches of the defense forces.
North America is Expected to Exhibit a Significant Growth
- North America presently holds the largest market for cyber security solutions. The strong presence of several market incumbents, coupled with recent security threats in the region, and the thriving defense industry is expected to drive the adoption of these solutions further. Due to the increasing incidents of cyberattacks in the country, the governments in this region are significantly investing in dealing with these cyber attacks.
- As a major developed economy, the United States is highly dependent on the Internet and is therefore highly exposed to cyber-attacks. At the same time, the country has substantial capabilities in defense due to advanced technology and a large military budget. Malicious hacking from domestic or foreign enemies remains a constant threat to the United States. In response to these growing threats, the country has developed significant cyber capabilities for the defense sector.
- Moreover, the United States Cyber Command centralizes command of cyberspace operations, organizes existing cyber resources, and synchronizes defense of US military networks. The recent annual budget plans of the US government earmarked more than USD 11 billion for cybersecurity-related initiatives and USD 9.6 billion for the FY 2020 budget, specifically for the Defense Department Cyber Operations. This was done due to the increasing number of cyberattacks in the country. Also, according to an Atlas VPN investigation, the US government is set to allocate USD 18.78 billion for cybersecurity spending in the FY 2021 budget. In addition, the DOD digital security budget may amount to over 50% of the whole federal cybersecurity spending.
- Canada is expected to have a significant market share for the defense cybersecurity market. Expanding the cyber defense budget, government initiatives to secure a computerized framework, and spotlight on reinforcing cybersecurity approaches are the key driving element affecting the demand in the country. Besides, the foundation of cybersecurity units and deploying powerful cybersecurity systems inside government organizations, military and guard part are further driving business sector development.
The Defense Cyber Security Market is a highly competitive market. Some of the major players of this industry are Northrop Grumman Corporation, Raytheon Technologies Corporation, Thales S.A., The Boeing Company, IBM Corporation, Cisco Systems Inc., among others. The defense cyber security market is a highly regulated industry that depends on government regulations and initiatives for any change in its dynamics.
- October 2020 - SAIC won the US Air Force Modeling and Simulation Support Services (AFMS3) 2.0 contract to implement, integrate, and develop modeling and simulation (M&S), training, and analysis standards for the Air Force, Department of defence, and other organizations. Released by General Service Administration (GSA) FEDSIM on the GSA OASIS contract vehicle, the total potential value of the single-award contract has a ceiling of USD 737 million.
- September 2020 - Northrop Grumman Corporation was awarded a task order contract by the US General Services Administration’s (GSA) Federal Systems Integration and Management Center (FEDSIM) and the Defense Intelligence Agency, to help the organization deliver actionable intelligence with speed and enhance decision superiority.
- September 2020 - L3Harris Technologies Inc. is anticipated to lead a team to help transform the US Air Force’s flight simulator training with new standards, which may lead to enhanced cyber security and enable remote software updates. The Air Force’s Simulators Common Architecture Requirements and Standards (SCARS)’ cybersecurity criteria will enable the Air Force to link simulators together, perform remote software updates, and enrich the training environment.
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Table of Contents
1.2 Scope of the Study
4.2 Market Drivers
4.2.1 Growing Severity of Cyber Attacks on Military/Government Organizations
4.2.2 Increasing Government Initiatives to Secure Critical Data
4.3 Market Restraints
4.3.1 Low Funding Priority and the Lack of Effective ROI Metrics
4.4 Industry Attractiveness - Porter's Five Force Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
4.5 Impact of COVID-19 on the Market
5.1.1 Defense Solutions
5.1.2 Threat Assessment
5.1.3 Network Fortification
5.1.4 Training Services
5.2.1 North America
220.127.116.11 United States
18.104.22.168 United Kingdom
5.2.3 Asia Pacific
22.214.171.124 South Korea
5.2.4 Rest of the World
6.1.1 General Dynamics-CSRA
6.1.2 Raytheon Technologies Corporation
6.1.4 Lockheed Martin Corporation
6.1.5 CACI International Inc.
6.1.6 L3 Harris Technologies
6.1.7 Northrop Grumman
6.1.8 Booz Allen Hamilton Holding Corp.
6.1.9 Viasat Inc.
6.1.10 Leidos Holdings Inc.