Global Cyber Security Supplier Ecosystem

Product Innovation, M&A and High Expenditure on Sales & Marketing Continued Through the First Half of 2020 Despite Economic Uncertainty.

The global market for cybersecurity technologies and services was $115.4 billion in 2018 and grew to $128.6 billion in 2019. In 2020 market growth has been affected by the disruption caused by COVID-19 and the resulting adverse economic conditions. However, a wide range of vendors continue to perform well and despite a slowdown in customer investment, the outlook for the market in 2021 is bright.

Increasing digital automation, remote access and adoption of cloud-based services and infrastructure, combined with the evolving cyber threat, will continue to sustain market demand. Merger & Acquisition activity is expected to remain strong along with the steady emergence of cyber start-ups.

This latest report analyses the trends impacting the current cybersecurity ecosystem and provides guidance to vendors, integrators and investors.

Key industry developments include:

• The number of new cyber start-ups peaked in 2014 though there remains a high number of new entrants delivering solutions based on improved detection and automation. Most new cyber firms have emerged from the US, Israel, UK and France.
• Cybersecurity vendors and service providers have posted largely positive sales results in 2020. However, there is a wide variance in company performance which can be attributed to differences in product portfolio, M&A investment strategy and marketing expenditure.
• Revenue growth of vendors rarely translates to net margin improvements as leading vendors continue to invest heavily in new customer acquisition at the expense of short-term profitability.
• Business models are shifting from on-premise products to cloud services.
• Technology innovation remains strong as vendors maintain research and development budgets to improve product performance and meet new requirements.
• Cybersecurity export growth to emerging markets remains stable, with leading vendors still growing strongly in traditional North American and European markets.

During the next 12 months the publisher expects to see further investment from telecommunication service providers and leading technology firms in the cybersecurity market, leading to further consolidation of the professional and managed services market. Product portfolio expansion will also continue as vendors build a portfolio of solutions to help customers access and protect a wide range of services hosted on-premise, in the cloud and at the edge.