From data breaches to cyber fraud, malware attacks to email phishing – cybersecurity threats are everywhere and no one seems to be immune. But even as cybersecurity quickly transforms into its own big business industry, there’s plenty of companies and individuals who continue to end up the losing side of the deal.
Research from British insurance company Lloyd’s found the damages of cyber attacks and hacks are costing businesses roughly $400 billion a year; other forecasts suggest the figure is actually closer to at least $500 billion.
With the amount of harm being done by cybercriminals around the world, it is no wonder the global cybersecurity market is rapidly expanding, but will this growth be enough to keep up with hackers? Cybersecurity Ventures released its quarterly Cybersecurity Market Report for Q3 2015, digging deep into the business of cybersecurity and examining the true impact it’s having.
The report provides consolidated data from cybersecurity-focused reports analyzing various aspects of the industry. Here are some of the most standout figures about the current state of the cybersecurity market:
Global Cybersecurity Spending Hits $77 Billion
It’s clear many businesses are sparring no expense when it comes to protecting themselves and their customers from being hit by a cybersecurity attack. According to market research firm Gartner, an estimated $77 billion may be funneled toward cybersecurity efforts this year, with the figure expected to rise to $170 billion by 2020. This jump represents an almost 10 percent growth rate in the amount of money companies around the world are pouring into their digital security efforts.
Not only is cybersecurity spending on the rise, but venture capitalists are reportedly betting big on startups supporting a range of cybersecurity-related services. During the first half of 2015 alone, CBI Insights reported venture firms funneled $1.2 billion into cybersecurity startups.
Venture capital investor Allegis Capital raised a $100 million fund to specifically back cybersecurity companies, with Allegis founder and Managing Director Robert Ackerman noting, “there is a substantial need for new and promising cybersecurity startups and a huge investment opportunity in them.”
Cybercriminals Rack Up Billions
Just as the money going into cybersecurity continues to grow, so do the profits hackers are making from their cybercriminal activities. But these cyber attackers are not just in it for the data, as security firm Kaspersky Lab found nearly $1 billion was stolen from 100 different financial institutions throughout the U.S., Russia, Ukraine, Europe and China over a two-year period. Over the past 15 months, ransomware scams – where hackers threaten permanent destruction to files and other sensitive information if a ransom is not paid – have alone cost $18 million. The FBI confirmed, on average, more than $1 million is paid each month to hackers by those hoping to recover computers from ransomeware threats.
In a survey of 510 companies conducted by analytics firm Neustar earlier this year, nearly one-third said they lose more than $100,000 in revenue per hour while distributed denial of service attacks (DDoS) attacks are going on. In these circumstances, hackers threaten to render a company’s website useless by jamming the site with traffic if their targets don’t pay up.
Nearly 91 percent of respondents said DDoS attacks haven’t decreased as a threat in the past year, 85 percent reported multiple attacks, while 31 percent said their longest attacks lasted more than one day.
Cyber Attacks Going Mobile
Mobile security is a hot area for growth in the cybersecurity landscape, which is no surprise considering 16 million mobile devices worldwide were estimated to have been infected with some type of malicious software last year. The figure, provided by Alcatel-Lucent’s Motive Security Labs, shows how hackers are capitalizing on a new channel where sensitive corporate and customer data are left vulnerable to threats and breaches.
The market for mobile security is expected to reach $5.75 billion by 2019 at an estimated compound annual growth rate of 30 percent from 2014 to 2019, according to research from Markets and Markets.
“Mobile security spending is trending up rapidly – due in part to the sheer number of new mobile devices entering the market and growing mobile risk awareness from corporate security people” noted Steve Morgan, Cybersecurity Ventures founder and CEO. “But the market is just cracking open and mobile security is only a fraction of the total security spend. Analysts and research firms indicate the real opportunity in mobile security is still ahead of us.”
The Cost Of Coverage
The financial boom of the cybersecurity market has opened the door to an increase in cyber insurance as well. Data from the technology policy division of the Financial Services Roundtable found the demand for cyber insurance rose by 21 percent across all industries, with the biggest increase in coverage buying rising 29 percent for financial institutions
“Cyber insurance policies are offered by more than 70 carriers according to a Gartner Research report, and include liability coverage for exposing confidential information, paying to notify customers of a breach and providing them with credit-monitoring services,” Lou Shipley, CEO at Black Duck Software, recently stated in an article he wrote for The Wall Street Journal.
The growing adoption of cyber insurance policies has resulted in the cyber insurance market growing from $1 billion to $2.5 billion since 2013. Forrester Research recently forecasted “$100 million cyber-insurance policies will become the norm,” the Cybersecurity Market Report said.
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