Cyberattacks prompt massive security spending surge

  • TECH
  • Saturday, 20 May 2017

Hardwares used for Cybersecurity are displayed at the desk of Security Platform during the TechCrunch Disrupt event in Manhattan, in New York City, NY, U.S. May 15, 2017. REUTERS/Eduardo Munoze

PARIS: The fight against cyberattacks has sparked exponential growth in global protection spending, with the cyber security market estimated at US$120bil (RM518.76bil) this year, more than 30 times its size just over a decade ago. 

But even that massive figure looks set to be dwarfed within a few years, experts said, after ransomware attacks crippled computers worldwide in the past week. 

The “global cybersecurity market was worth US$3.5bil (RM15.13bil)” in 2004, according to a study by Cyber security research firm CyberSecurity Ventures, but in 2017, “we expect it to be worth more than US$120bil (RM518.76bil)”.  

In the five years ending in 2021, the firm said it expected worldwide spending on cybersecurity products and services “to eclipse US$1tril (RM4.32tril)”. 

”It has clearly been a rapidly increasing market for many years, particularly in the last two or three years,” said Gerome Billois, a cybersecurity expert with consulting firm Wavestone.

Much of the growth will be spurred by massive cyberattacks like the so-called “Wannacry” ransomware that struck targets in dozens of countries, ranging from British hospitals to Russian banks. 

In what experts called an unprecedented mass cyberattack using ransomware, more than 200,000 computers around the world were hacked beginning May 12 using a security flaw in Microsoft’s Windows XP operating system, an older version that was no longer given mainstream tech support by the US giant. 

The virus spread quickly because the culprits used a digital code believed to have been developed by the US National Security Agency – and subsequently leaked as part of a document dump, according to the Moscow-based computer security firm Kaspersky Lab. 

The attack blocks computers and puts up images on victims’ screens demanding payment of US$300 (RM1,296) in the virtual currency Bitcoin, saying: “Ooops, your files have been encrypted!” 

The massive attack has been a boon for cybersecurity firms, driving up stock prices of some while others, like six-year-old American start-up Crowdstrike, were able to raise US$100mil (RM432.30mil) in one day.  

Ransomware: ‘key trend’ 

High-profiles attacks like WannaCry “drive the market,” Ilex International president Laurent Gautier told AFP. 

Ransomware attacks represent about 22% of all global incidents NTT Security, an information security and risk management firm, handles for clients, said Kai Grunwitz, the firm’s senior vice-president for central Europe. 

That number jumps to 56% for financial firms. 

”So these types of attacks are certainly one of the key trends” driving up spending on computer security systems and tools, Grunwitz said, but “buying more software or hardware products will not fix the problem – awareness, procedures and a strategy aligned with the specific risk profile are key.” 

”Nevertheless, the global security market has grown in terms of revenue, and we see a very strong potential for additional growth in products but even more in consulting and managed security services over the next few years.” 

A still nascent industry just 12 to 13 years ago, the market gradually expanded because of the “digitisation of companies and countries” and the increasing online attacks which publicised the rising digital threat, Billois said. 

”The growing wave of ransomware in 2014 created an enormous source of business for security research firms” because “companies were made aware of their vulnerabilities,” said security expert Jerome Saiz. 

Companies were slow to realise they needed to protect themselves since “the return on investment is impossible to determine,” Saiz said, “and we cannot know which attacks we survived and how much they cost”. 

For large companies, putting in place an IT security strategy can cost tens of millions of dollars, he added. 

Some like French telecoms firm Orange choose to bring the security in-house. The telecoms giant bought cybersecurity firm Lexsi last year. 

To better respond to the threat from the other side, smaller security firms have banded together to create alliances, like the group of French companies who formed Hexatrust in 2014.  

Either way, software security companies like US antivirus firm Symantec are reaping the benefits. The company “doubled” its share price in one year, said chief security strategist Laurent Heslault. 

But the threat from ransomware is hardly the only danger on the horizon. 

The hacking of interconnected appliances and other Internet-connected things, the theft of personal and financial data, and hackers engaging in online political campaigns will all drive the market in the coming years. 

The biggest troubles however will not come from an attack but a “skills shortage“: “a million cybersecurity jobs worldwide actually remain unfilled,” Heslault said. — AFP

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 0
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Next In Tech News

Exclusive-EU regulators to clear Google's maths app deal, sources say
US FTC seeking information on cloud providers market power
Companies would have to offer repairs for worn-out products for up to 10 years under proposed EU rules
Stablecoin issuer Circle says exec's Twitter giveaway offer was scam, account was hacked
Amazon raises hourly pay for UK workers by 50 pence; union mulls more strikes
UK says Broadcom's $61 billion VMware deal could hurt server competition
German green group sues Meta alleging failure to curb threats
Amazon has rolled out contactless tech to 200 locations including Panera cafes
Australia's Latitude at all-time low on more evidence of large-scale data theft
Russia's Ozon appeals Nasdaq delisting plan