If cybercrime was a country, it would be the 27th largest economy in the world, with about the same size as Austria. Today’s cyber threat landscape is highly targeted and focused on acquiring something valuable and vital such as sensitive personal information or intellectual property. In 2013 there were 253 data breaches, up 62% from 156 in 2012. These breaches resulted in more than 552 million identities exposed, up 493% from 93 million in 2012. The frequency of breaches is accelerating and the magnitude of the damage continues to increase. Such incidents can cost millions of dollars and compromise customer data, intellectual property and business reputation.
IT Security Investments become a top priority
Therefore it is not surprising that spending for IT security is becoming the top priority for companies and governments. As such we believe IT security is an industry that long-term oriented investors must have exposure to. The aim of this paper is to provide an update and a short overview of this sector in a) describing the types of cyber threats and possible defensive measures, b) to map in a simplified way the various vendors and c) to conclude with the long-term drivers of the IT security sector.
IT security remains a top priority among corporate and government executives
We think IT security will get an increasing share within IT budgets over the next couple of years. In addition, most security solutions have been built from existing technologies, and therefore there is the need to invest just to maintain these legacy systems.
Finally, decreasing the vulnerability of corporate networks by traditional solutions results in security gaps because those solutions were not designed to address several major recent developments. Referring to the recent high-profile breaches it seems that traditional network security solutions have insufficient abilities to deal with a complex IT infrastructure and a dynamic and constantly evolving threat environment. According to areport by Verizon, there are some interesting findings:
• 75% of breaches were driven by financial motives,
• 66% of breaches took months to discover,
• 92% of breaches were perpetrated by outsiders,
• 37% of breaches affected a financial organisation, and
• 71% of breaches targeted devices.
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