Vertical Markets

UK cyber security market report

by Mark Rowe

The UK is in the peloton leading cyber security, according to a report for Government. There are several other countries also with leading positions, and, depending on the criteria chosen, one or two countries emerge as true front-runners. But there is no break away leader in the global cyber security market.

Cyber security is the set of processes and technologies that allow us to conduct business, commerce and our private lives digitally, while in a safe environment. The UK market for cyber security is worth almost £2.8 billion in 2013, and it’s estimated, in a report by Pierre Audoin Consultants (PAC) UK for the Department for Business, to be worth over £3.4 billion in 2017. That would mean annual growth of 5.7 per cent which is more than the estimated growth in the total IT market in the UK; set to more or less track inflation.

According to the study, threats to individual, corporate and government activities online come from three primary sources:

• Criminal behaviour: attempts at committing fraud for (usually) financial gain;
• Hacktivism: Disrupting corporate or government activities by denial of service, defacing online content and generally damaging online reputation;
• Espionage: gathering corporate or government information illegally, to subvert competitive advantage or national security.

For the full 93-page report visit the gov.uk website.

There is generally within the industry a poor understanding of the sector’s market dynamics and supply structures. In short, there is an urgent need for an understanding of the competitiveness of the UK’s cyber security sector, both within the UK and in comparison with other countries.
Within the broad IT sector, there are four major but inter-dependent trends that are reshaping the capabilities of technology and also restructuring the fundamental market dynamics of the industry. These trends are: cloud computing; mobility; social computing; and big data and analytics.
These four key trends are driving growth in the IT sector, and their relationship with cyber security is fundamental. Each of these trends both impacts and is impacted by cyber security and that impact can be either positive or negative. Cyber security, then, is tied intrinsically to the shape of the overall IT market.

The two largest sections of the markets are the commercial enterprise submarket and the ‘other’ public sector segments; the other two are defined as consumers, and defence and intelligence. The largest two submarkets have similar cyber security requirements and feature considerable scalability requirements across their organisation structures. For example, the security requirements of the DWP’s benefit payments system are not dissimilar to those of a bank.

GCHQ is an acknowledged world leader in cyber security in technical aspects. But its administration of the various certification schemes lacks commercial focus, according to the study. Many smaller suppliers complain of a lack of access to government contracts, not only in the (correctly) guarded defence and intelligence areas but also in general areas such as education and local government. Part of this problem is in the procurement structure of government. But part of it is also in the dearth of business skills at the SME level more generally (not an issue specific to cyber security): many small firms lack sufficient understanding of marketing, finance and management.

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