2020 was an unprecedented and disruptive year for individuals, corporations and nations alike. However as much as things change, some continue to remain the same, with cyber-attacks being one such thing. Cyber-attacks continued unabated during 2020, with well over 100 major cyber incidents during the year. As a result, cybersecurity spending is forecast to grow, even as the world economy is forecast to decline sharply. M&A activity in the sector was very strong in 2020 and is expected to continue to grow in 2021. In this report we focus on five key sub-sectors of cybersecurity, which are the largest and fastest growing areas.
Cyber-attacks continued unabated in 2020
COVID-19 has caused unprecedented disruption globally, with the global economy expected to decline by the most since at least the end of the Second World War. However cyber-attacks and breaches have continued unimpeded; even as the world struggles to get the pandemic under control. There have been over 100 major significant cyber incidents in 2020, a year in which most of the world has been in partial lockdown. The attacks seem to have emanated from an array of bad actors including state-backed agencies, in countries ranging from North Korea and China to Iran and Russia; to criminal gangs, intent on stealing financial assets, commercial secrets as well as sabotaging the functioning of physical infrastructure.
Cybersecurity spending growth forecast to slow down in 2020
Global spending on information security is forecast to have increase 2.4% in 2020 to US$123.8bn, according to data from Gartner, which is significantly lower than its previous forecast of 8.7% growth for 2020; resulting from the negative impact of the COVID-19 pandemic.
The 2.4% growth forecast for cybersecurity however is far ahead of the 5.4% decline Gartner forecasts for global IT spending in 2020. Cloud Security is forecast to be the fastest growing cybersecurity sub-sector with a 33.3% YoY growth in in 2020, followed by data security (+7.2% YoY) and application security (+6.2% YoY). Networking security equipment is forecast to be the most severely impacted by spending cuts in 2020 and are forecast to decline - 12.6% YoY followed by consumer spending on security software at -0.3% YoY.
Spending on cybersecurity to recover over the next 4 years
Worldwide spending on information security is forecast to grow at a CAGR of 8.1% over the 2020-2024 period, according to IDC, benefitting from a global economic recovery from the impact of COVID-19 pandemic. Information security spending is expected to increase to US$174.7bn in 2024. IDC forecasts Security Services to continue to be both the fastest growing as well as the largest subsector within global information security.