Deltek Projects Sustained Growth in Federal Cybersecurity Market

Published: November 01, 2018

Federal Market AnalysisCritical Infrastructure ProtectionCybersecurityForecasts and Spending

Federal agencies look to industry for support in meeting their cybersecurity challenges, creating significant contract opportunities.

An evolving threat landscape, ubiquitous interconnectivity, continued data breaches, and an ever-growing dependence on technology and data make securing federal information systems one of the government’s highest priorities. White House policy directives, legislative requirements, and technology strategies are also driving agency cybersecurity requirements and expenditures.

Deltek’s report Federal Information Security Market, FY 2018-2023 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.

Driven by the federal government’s desire to enhance agency cybersecurity posture at every possible level, Deltek forecasts the demand for vendor-furnished information security products and services by the U.S. federal government will increase from grow from $10.9 billion in FY 2018 to over $14.1 billion in FY 2023 at a compound annual growth rate (CAGR) of 5.3%. (See chart below.)

Key Findings

  • Major cyber strategy updates across government are driving efforts to modernize and harden agency security at the network, system, application and data levels.
  • The total federal cybersecurity budget is on the rise. However, there is variability at the agency level, which may be a reflection of activity consolidation or shared services cost savings.
  • Information security contract spending has shown steady growth over the last few years, particularly on services. Defense and civilian buying segments show similar spending amounts and growth rates.
  • Top contracting vehicles for information security related spending include Seaport-e, GSA Schedule 70 and SEWP V.
  • Agencies are striving to increase baseline security capabilities and improve accountability for information security risk management.
  • Agencies are looking for innovations in security processes and approaches as well as tools. Analytics and artificial intelligence show promise of improving performance.
  • OMB and agencies are working to strengthen the federal cybersecurity workforce and improve hiring practices.
  • Agencies are attempting to move to shared services where possible, including for cybersecurity services and solutions.

Federal leaders are focused on enhancing their agency’s cybersecurity posture at every possible level, attempting to overcome capability gaps, budget constraints, organizational challenges, and regulatory hurdles.

The threats – both external and internal – to data and systems continue to grow in sophistication, scope, and frequency driving the demand for effective approaches to detect, defend, mitigate, and respond. The complex federal IT environment poses challenges to effective threat mitigation due to legacy IT, along-side increasing demand for mobile solutions, cloud-based technologies and the desire to employ emerging technologies such as blockchain and artificial intelligence.

Within this complex and challenging environment the White House, the Office of Management and Budget (OMB), the Department of Homeland Security (DHS), the Department of Defense (DoD), and others are revamping federal cybersecurity policies to address risk management, shared cybersecurity services, protection of government information on contractor systems and large-scale IT modernization across the government.

These broad priorities will both sustain investment and disrupt some traditional areas of information security, driving competition and providing significant contracting opportunities over the next several years.

Get more of our perspective in the full report Federal Information Security Market, FY 2018-2023.