MA

Federal Cybersecurity Market Continues Strong Growth

Published: November 06, 2019

Critical Infrastructure ProtectionCybersecurityForecasts and SpendingPolicy and Legislation

Complex market forces drive contract opportunities to support federal agencies in meeting their cybersecurity challenges.

Constantly-evolving threats, unending attacks, rapid technological change, pervasive interconnectivity, and an increasing dependence on technology and data make securing federal information and infrastructure a national imperative. White House policy directives, legislative requirements, and evolving technology solutions are converging to drive agency cybersecurity strategies and procurements.

Deltek’s report Federal Information Security Market, FY 2019-2024 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 plans and efforts 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 $11.9 billion in FY 2019 to $15.4 billion in FY 2024 at a Compound Annual Growth Rate (CAGR) of 5.3%. (See chart below.)

Key Findings

  • Evolving Strategies. Major cyber strategy updates across government continue to mature and drive efforts to modernize and harden agency security at the network, system, application and data levels.
  • Growing Budget. The overall federal cybersecurity budget continues to grow, but spending and growth rates at the agency level depends on the maturity of their security footprint as well as progress in consolidation or cost savings activities.
  • Defense Reorganizations. Cyber-centric organizations in the Department of Defense are combining functions and commands because of the growing interconnections among cybersecurity, information warfare and ISR the functions.
  • Policy and Oversight. OMB, DOD and DHS are increasing their policy oversight of IT and cybersecurity contracts to increase the security of contracted solutions and improve accountability for information security risk management.
  • Technology Enablers. Agencies are exploring zero trust networking, AI/ML, blockchain, and other emerging technologies, as well as optimizing and consolidating Security Operations Centers to enhance their cybersecurity posture and gain efficiencies.

The threats – both external and internal – to applications, systems and data continue to grow in frequency, scope and sophistication further driving the demand for effective cybersecurity approaches and processes. Complex federal IT environments, where legacy IT operates alongside modern and emerging technologies, pose challenges to effective threat mitigation.

Growing demand for mobile solutions, cloud-based technologies and the desire to employ emerging technologies such as machine learning and artificial intelligence further challenge agencies to not only identify existing security vulnerabilities, but to also prepare a security framework that can support future requirements.

Within this complex environment federal leaders are working to overcome capability gaps, organizational challenges, and technical obstacles to enhancing their agency’s cybersecurity. The White House, the Office of Management and Budget (OMB), the Department of Homeland Security (DHS), the Department of Defense (DoD), and others are adjusting federal cybersecurity policies to address risk management, supply chain security, the protection of government information on contractor systems and large-scale IT modernization.

These diverse factors continue to sustain investment while propelling evolution in the federal information security landscape, 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 2019-2024.

Get a free report summary of Federal Information Security Market, FY 2019-2024.