Federal Cybersecurity Outlook Projects Continued Growth

Deltek’s report Federal Information Security Market, FY 2015-2020 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 four major driving areas that continue to create demand for government-wide and agency budget investments:

• Threat Drivers - Rapid rise in complex, diverse, persistent and morphing threats to networks, devices, data and other infrastructure.
  
• Policy Drivers - Executive branch policies address wide areas of cyber- across government and beyond. Stagnant legislation reflects diversity of opinion. Compliance policy bolsters spending on existing frameworks. RFP language both driving and requiring security.
  
• People Drivers - Challenge to find enough qualified cybersecurity professionals. Initiatives to cultivate internal government talent and “inherently governmental” roles will limit contractor addressability, but agencies that supplement by contracting will drive spending.
  
• Technology Drivers - Threats and vulnerabilities drive direct technical remedies while new, disruptive technologies require security for full 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 $8.6 billion in FY 2015 to $11.0 billion in 2020 at a compound annual growth rate (CAGR) of 5.2%. (See chart below.)

Key Findings

• The breadth and depth of cyber-threats and the complexity of agency IT environments continues to challenge progress in hardening their cybersecurity. Agencies will continue to look to industry for help.
• While overall IT spending will remain relatively flat over the forecast period, growth opportunities remain in key areas of cybersecurity. Related security efforts in cloud, big data, mobility, and infrastructure will support growth.
• Services and product demands are driven by agency maturity in security strategies and processes.
  • Strategy and cyber-ops services show sustained demand
  • Products for improved monitoring, effectiveness, and automation are desired
• Skilled personnel needs will sustain demand for contracted services. Offensive cyber and “inherently governmental” areas trim addressability.
• Government-wide IT policies will continue to embed cybersecurity into the fabric of federal IT acquisitions and management.
  • Security is widely impacting acquisition policy, contract types, and RFPs.  

Federal leaders are focused on improving the cybersecurity of agencies at all levels, amidst capability gaps and budget, personnel, and regulatory constraints.  To address their information security gaps, agencies continue to look to industry partners for the processes, services, skill sets, and tools needed to mount both defensive and offensive cybersecurity strategies.

Agency effort to increase effectiveness, efficiency and economy range from organizational actions like DoD’s Cyber Mission Forces and OMB’s 30-day Cyber Sprint to procurement approaches like the Continuous Diagnostics and Monitoring (CDM) program BPA from DHS and GSA or secure supply chain provisions in acquisition rules.These efforts and others are impacting how agencies approach cybersecurity and establish their spending priorities. While progress is uneven and competition is strong, the evidence shows that securing and defending federal infrastructure and data will continue to drive significant contracting opportunities.

Get more of our perspective in the full report Federal Information Security Market, FY 2015-2020.