Deltek Projects Sustained Growth in Federal Cybersecurity
Published: November 03, 2016
To meet their information security challenges, federal agencies continue to look to industry for support services and products, creating significant contract opportunities.
Recurrent breaches, diverse and persistent threats, and the increasing interconnectivity and centrality of technology and data make securing federal information systems a critical priority. Internal and external threats to systems and data continue to grow in scope and sophistication, driving the need for equally effective solutions to detect, protect and mitigate security risks. To address their information security gaps, agencies continue to look to industry partners for the skill sets, services, processes, and tools necessary to mount both defensive and offensive cybersecurity strategies.
Deltek’s report Federal Information Security Market, FY 2016-2021 examines the trends and drivers shaping the federal information security marketplace and provides a forecast for the next five years. Taking a comprehensive perspective on the federal cybersecurity market, we see six major drivers that continue to create demand for government-wide and agency budget investments:
- Threat Environment – The complex and diverse threats to networks, devices, data and infrastructure.
- Leadership/Workforce – Efforts to establish the leadership and skilled workforce to meet the challenge.
- Technology Policy – Security compliance, standards, and management policies addressing government-wide priorities.
- Acquisition Policy – Information security is a growing requirement within acquisition policy.
- Organizational Strategies – The strategies, organizations, programs, and legislative provisions to increase cybersecurity.
- Technology Solutions – Technical remedies to improve security and emerging technologies that require security for greater adoption.
Given these drivers, Deltek forecasts the demand for vendor-furnished information security products and services by the U.S. federal government will increase from $9.3 billion in FY 2016 to $12.0 billion in 2021 at a compound annual growth rate (CAGR) of 5.3%. (See chart below.)
- The complexity of agency IT environments, the vulnerabilities and challenges of hardening legacy systems, and the breadth of cyber-threats continues to challenge progress in increasing federal cybersecurity. Agencies will continue to look to industry for assistance with a broad scope of solutions and services.
- Although federal spending on IT in general continues to remain effectively flat over the forecast period, cybersecurity spending growth remains relatively strong as a key federal priority.
- Beyond security-specific activities, implementations of cloud, big data, and mobility solutions, as well as infrastructure modernization efforts, will provide growth opportunities as these efforts contain security-related aspects to be successful.
- Defense organizations are struggling with strategies to integrate cyber operations with warfighting operations.
- The need for skilled operators will sustain demand for contracted services, especially in the civilian sector. DoD deterrent or offensive cyber capabilities and “inherently governmental” areas limit addressability.
- Government-wide policies addressing IT acquisitions and management continue to insert greater cybersecurity requirements into nearly every aspect of the federal IT acquisitions and management lifecycle. Security exerts some of the highest impacts within acquisition policy, RFPs, contract types, and budget decisions.
- The maturity of an agency’s security strategy, processes, and operational posture drives their services and product demand mix, but evolving government-wide policy and core shared capabilities mean that most agencies require both operational support and at least some targeted solutions.
Agency leaders are focused on enhancing their cybersecurity posture at every level, attempting to overcome capability gaps and budget, personnel, and regulatory constraints. The challenge is magnified by the complexity of the federal IT environment where agencies are seeking to deploy newer, mobile and cloud-based technologies alongside legacy systems and environments.
Federal efforts to increase effectiveness, efficiency and economy range from actions like the appointment of a Federal Chief Information Security Officer (CISO) and the development of a Cybersecurity National Action Plan (CNAP) to organizational proposals to elevate cybersecurity elements of the Department of Homeland Security (DHS) and revisions of major IT management and acquisition policies. Progress is uneven, but these efforts and others are driving how agencies approach cybersecurity and establish their spending priorities.
While competition in the market remains strong, the evidence shows that securing and defending federal infrastructure and data will continue to drive significant contracting opportunities over the next several years.