Amidst constant chatter of Russian interference and hacking in Western Europe and the United States and now a global panic over ransomware exploiting a hole in Microsoft security originally found by the National Security Agency in the United States, governments and companies are increasingly turning to cyber security companies to gauge their vulnerabilities and protect sensitive information and systems.
According to Cyber Security Ventures, the global cyber security market was just $3.5 billion in 2004, but this year will reach $125 billion. The market should continue growing by up to 15% over the next several years.
Cyber security is a broad category that involves protection from both surveillance as well as attacks. The burgeoning “internet of things,” which allows users to connect to networks from numerous devices had made the job of cybersecurity more challenging. Bessemer Venture Partners began tracking the largest publicly traded companies whose focus is Information Technology Security in 2011 when they created the BVP Cyber Index. Since it’s inception, the BVP Cyber Index is up 184%, compared to 88% for the S&P 500 and 127% for the tech-heavy Nasdaq 100.
The largest component of the index is Symantec, which makes security software under the name Norton Anti-Virus. Check Point Software, the second largest component of the BVP Cyber Index is a Tel-Aviv, Israel-based company that primarily provides network and data security to corporations.
Many of the players in the industry are housed within larger corporations. IBM now does about $3 billion per year in I.T. security and Cisco Systems about $2 billion. Other large players like Microsoft devote resources to security as a component of each release of their software.
The burgeoning field also has numerous private companies and start-up activity continues growing. The Russian company Kaspersky Labs is now the largest European provider of anti-virus software and is doing about $700 million a year in business, both through consumer and corporate anti-virus products.
One of the most promising companies when it comes to burgeoning cyber-security products is Palantir, co-founded by PayPal founder Peter Thiel. Palantir uses advanced analytics to provide usable intelligence. Although the company keeps a low-key profile, it is said that their data mining technologies have helped thwart terrorist attacks and spot money laundering schemes. Their cyber-security products can spot anomalous code and suspicious activity, allowing users to not only defend against malicious attacks but understand their source so that security can be improved as time passes.
As lessons are learned and cataloged from the devastating and unprecedented “WannaCry” virus, it seems certain that products from some of or all of the cyber-security leaders will remain in high demand. And the NSA may want to protect their source code a little more vigalantly.
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