Companies will double or triple spending on cybersecurity in the coming years, eventually creating an estimated $40 billion industry, AT&T says.
Cyber attacks continue to grow in sophistication and frequency on AT&T’s networks. Over the past four months, attacks on AT&T’s networks have doubled and are more targeted to evade detection. As AT&T learns to defend itself, it is looking to provide cybersecurity services that it predicts would be a $1 billion opportunity in the coming years.
"We see them on a daily basis and they are now getting smaller instead of coming in huge waves, which were easier for us to detect," said Frank Jules, president of AT&T’s global enterprise unit, at the Morgan Stanley TMT conference. "Every chief information officer at major corporations that I meet wants to talk about security."
Frank Kendall, defense undersecretary for acquisition, technology and logistics, recently said there is still "a lot of money" to be made in the defense business, despite mounting budget pressures. One of those areas for opportunity is in cybersecurity. Other federal officials have also stated that funding for cybersecurity should survive mandatory defense budget cuts.
“We need (cybersecurity) capability, and the government alone cannot provide that capability,” said Rep. Mac Thornberry, a Republican cybersecurity leader on the House Armed Services Committee, when asked about the growing cyber spending in Washington. “We cannot hire and keep and fund the kinds of capabilities that are needed to protect cyberspace. Some of it has to be contracted out, and you have to have the expertise and so forth to do that.”
Due to the shift federal budget priorities, companies like Boeing, Northrop Grumman, Raytheon and SAIC are betting big on cybersecurity. They are now competing against tech firms like IBM and HP to offer the feds their cybersecurity products, personnel, services and solutions.
Deltek expects government spending on cybersecurity products and services will grow at an estimated annual rate of more than 7 percent between now and 2017, with spending expected to reach $14 billion in 2017. That doesn’t include millions of dollars spent by the Pentagon to operate in cyberspace.
“In a time of tight budgets that are impacting spend[ing] across the board, there’s a premium in government investing in tech that delivers the maximum amount of security for an amount of money that is there,” said Thomas Gann, vice president of government relations at McAfee, in Politico.
