February 17, 2017
With more connected devices than ever, and cyberattacks becoming increasingly sophisticated, traditionally secure networks may be at a turning point. Bloomberg Intelligence looks at where vulnerabilities lie – and how the cybersecurity industry is fighting back.
This analysis is by Bloomberg Intelligence analysts Anurag Rana and Mandeep Singh. It first appeared on the Bloomberg Terminal.
Rising Cyberattacks Support Growth in Security Software Market
Security software is seeing strong demand due to increasing cyberattacks across all industries. IDC expects security software to grow 7% a year through 2019 to $46 billion.
In addition to the absolute number, the sophistication of these attacks has also risen, spurring demand for advanced security products that are growing faster than the overall industry.
The number of unique malware discovered in 2015 rose 36% over the prior year and instances of stolen identities increased 23%, according to Symantec.
Next-Generation Security Products Focus on Cloud, Mobile, IoT
Increased proliferation of smartphones in the workplace and the greater use of cloud-based computing and applications are creating new growth opportunities for the security software industry.
These next-generation products are growing much faster than the overall security market. The rapid adoption of Internet of Things will likely become another growth driver for these products.
Mobile Employees Draw More Malware, Spur New Security Products
Rapid growth in mobile malware is spurring demand for a new kind of security product that monitors applications and data traffic on mobile devices.
This product works alongside security provided by the operating system and mobile-management software. It flags any malware’s attempt to send unauthorized data through the network.
Employees demanding to access enterprise data on their personal smartphones have forced IT departments to open networks without appropriate controls in many cases.
Gartner predicts that by 2018, 25% of enterprise data will go straight to the cloud from mobile devices without the knowledge of enterprise IT departments.
Swift Internet-of-Things Adoption Opens IT Network to New Risks
Increased adoption of Internet of Things is creating millions of new network end-points, which were historically limited to a handful of devices, therefore spawning fresh risks. This threat is even greater for regulated industries such as healthcare, which has life-preserving IoT medical devices.
All these factors are driving growth for new security software. These products are designed to continuously monitor various IoT end-points while ensuring data encryption without reducing the latency of the IoT devices.
Sales of IoT security products are expected to grow annually at 16.5% to reach $20 billion by 2020.
Advanced Cyber-Threat Intelligence Products Gain More IT Spend
Increased sophistication of cyberattacks has led to advanced security products that specialize in detecting threats that don’t have a precedence, as opposed to legacy security products that take a passive approach to detect attacks.
Most legacy products use signature-based technologies, which monitor for known malware and viruses. Advanced security products use techniques such as big data analysis on network flow, behavioral analysis and containerization to detect and neutralize the threat.
By 2020, 60% of IT security budgets will focus on rapid threat detection, up from less than 30% in 2016, based on Gartner estimates.
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– Compiled by Jen Robinson | February 17, 2017