TIA Report: Private Sector Cybersecurity Spending Increasing (2/25/15)
Wednesday, February 25, 2015 | Comments

Private sector spending on cybersecurity is accelerating, and for the first time in years, will grow faster than government spending in 2015, according to a new report issued by the Telecommunications Industry Association (TIA).

The new report offers a review of recent policy initiatives and private sector action, and provides an industry outlook. 

“Until recently, companies treated cybersecurity like many Americans treat home security — paying little attention to attacks until they strike close to home,” said TIA CEO Scott Belcher. “The spending data in our report shows that recent high-profile corporate breaches have spurred businesses into action. And while cybersecurity spending is on the rise, we also find that standardization will create economies of scale that will begin to lower costs in the coming years.”

The report finds that companies have tended to underinvest in cybersecurity, but a change of approach appears to be underway. “Instead of being relegated to being an IT issue, unrelated to basic business, cybersecurity is becoming a critical part of business strategy,” the report said.

Reflecting this, TIA data shows a meaningful increase in private sector cybersecurity spending — after increasing 11.2 percent in 2012, spending increased 14.5 percent in 2013 and was expected to increase 14.6 percent by the end of 2014.

With the acceleration in spending, TIA projects that private sector cybersecurity spending growth (15.4 percent) will eclipse government spending growth (14.6 percent) next year for the first time since 2009. During the next four years, private sector spending is expected to achieve a 12.6 percent compound annual growth rate, while government spending will see 11.8 percent compound annual growth rate.

Among the key findings of the report:
• Standardization/economies of scale will lower costs. “As the cybersecurity market expands, standardization is becoming increasingly important as it allows vendors to generate solutions less expensively,” said the report. While TIA predicts spending will increase for the next four years, the growth rate will slow. The shift from annually increasing rates to decreasing growth rates will take place in 2015 for the private sector and by the end of 2014 for government.

• Privacy and regulatory concerns have limited legislative action. “Consumers are increasingly concerned about the protection of their personal information, and businesses are concerned that regulations would increase costs,” the report said. The past several years of House and Senate cybersecurity bills were largely aimed at fostering information sharing. Congress took limited action, leading the Obama administration to take unilateral steps, including a 2013 executive order seeking to incentivize information sharing.

• New technologies offer both opportunity and risk. The TIA report said that technological advancements such as biometrics will limit cybersecurity threats, but these systems, with their massive amounts of personal data, will become inviting targets. The proliferation of data generally — and new technologies that gather data, such as wearables and drones — has opened new opportunities for attacks. At the same time, these advancements are generating a supply response, with many new cybersecurity players and technologies quickly emerging.

TIA published the Cybersecurity and Privacy Report as part of a look at key segments of TIA’s 2014 ICT Market Review & Forecast (MR&F), an industry data review and analysis.

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