Military Cybersecurity Market - Growth, Trends, and Forecast (2020 - 2025)

The military cybersecurity market is anticipated to register a CAGR of over 5% during the forecast period.

The increasing advancements in information technology and modernization of the existing weapon systems, along with the assimilation of high volumes of intelligence, surveillance, and reconnaissance (ISR) data from various systems, have necessitated the integration of cybersecurity solutions in the defense industry for protecting classified data from unauthorized access.

The development of a connected framework, wherein all military assets are connected with a central command center with the help of an encrypted tactical datalink, is anticipated to drive the initiatives undertaken by the defense forces across the world to prevent security breaches and, thereby, bolster the adoption of cybersecurity measures.

Key Market Trends

The Increasing Cyberattacks Around the World are Likely to Drive the Demand in the Market

With the growing digitalization of basic amenities, such as power grids, water treatment, and distribution facilities, threats of cyberattacks are also increasing. Cyberattacks can destroy financial institutions, power grids, computer networks, and offensive and defensive military equipment and put the economy of a country in chaos. Unlike traditional military attacks, cyberattacks can be launched instantaneously to even a remotely located facility. Cyberattacks have little obvious evidence of any buildup, unlike traditional military operations that require heavy military logistics. Since such an attack is extremely hard to trace, the certainty to prosecute perpetrators is relatively low, making retaliation harder. As a result, governments and intelligence agencies are working to improve their digital security capabilities. In September 2018, under the new National Cyber Strategy, the US government replaced restrictions on the use of offensive cyber operations with a legal regime that enables the Department of Defense (DoD) and other relevant agencies to operate with greater authority to penetrate foreign hostile networks, in order to deter attacks on the US systems. In April 2019, Pentagon finalized the cybersecurity standards that the defense contractors are required to adhere to while contesting for DoD contracts. The Cybersecurity Maturity Model Certification (CMMC) is a tiered cybersecurity framework that grades companies on a scale of one to five, based on the levels of classification and security that are necessary for the work that they are performing. The increasing sophistication of cybersecurity threats has driven the defense contractors to innovate and launch new advanced cybersecurity solutions. Thus, in January 2020, Thales Group launched the Cybels Analytics Platform, which combines several new approaches designed for cyberattack detection and forensics in a single tool and enables the real-time detection and tracking of some of the most complex emerging cybersecurity threats.

North America to Dominate the Market

North America is expected to retain its position as the largest market for military cybersecurity solutions during the forecast period. In the past few years, the United States was marred by several cyberattacks on some of its critical military, commercial, research, and industrial organizations.

• In March 2019, it was reported that at least 27 universities in the United States was targeted by Chinese hackers, as a part of a campaign, to obtain cutting-edge research data on the emerging naval technologies.
• In March 2019, the US Department of Energy reported that grid operators in Los Angeles County (California) and Salt Lake County (Utah) suffered DDoS attacks that disrupted their operations.
• In September 2019, North Korean hackers were reported to have conducted a phishing campaign targeting US entities that were monitoring the North Korean nuclear program and imposed economic sanctions against North Korea.

To curb the increasing number of cyberattacks, the US government is investing significantly in the research and development (R&D) of advanced cybersecurity systems. The FY 2019 budget allocated USD 15 billion for cybersecurity-related activities, representing a USD 583.4 million (4.1%) increase, as compared to the FY 2018 budget estimate. The strong presence of several market incumbents, coupled with the recent security threats in the region, and the thriving defense industry are expected to further drive the adoption of the cybersecurity solutions in the region.

Competitive Landscape

The military cybersecurity market is highly competitive. Some of the prominent players in the market are BAE Systems PLC, Lockheed Martin Corporation, General Dynamics Corporation, Northrop Grumman Corporation, and Thales Group. In October 2019, Airbus CyberSecurity and Thales Group signed a partnership agreement to offer a unique solution against cyberattacks. The solution combines the file analysis system, Orion Malware, from Airbus CyberSecurity with Thales’s intrusion detection system, Cybels Sensor. Several cybersecurity solutions are expected to be released during the forecast period, either as completely new packages or as updates to the existing solutions.

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