Agencies Are Leveraging Cloud-based Cybersecurity Solutions

The priorities for greater cybersecurity, technological efficiency and cost-effectiveness have grown over the last several years. The net effect has been a coalescing of these and other priorities to drive technology solutions that meet multiple priorities. In many respects, no where is this more evident than in the coalescing of cloud computing and cybersecurity.

What might have been viewed as distinct market segments just a few years ago has been becoming increasingly intertwined, as agencies seek to leverage cloud computing’s efficiencies, flexibilities and cost benefits to deploy their cybersecurity tools. At the same time, agencies have been pursuing effective ways to secure and harden their expanding cloud environments. The result is noticeable in the contract data collected withing the Federal Procurement Data System (FPDS).

Contract Spending on Cloud-based Cybersecurity

Looking at contract obligation data over the last three complete fiscal years shows that spending on cloud-based cybersecurity solutions remained relatively steady from FY 2019 through FY 2021, while the total contract value (TCV) of awarded contracts continued to rise from $382M in FY 2019 to $539M in FY 2021. (See chart below.)

Civilian agencies spent $488M on cloud-based cybersecurity from FY 2019-2021. Independent agencies spent $15M and the Department of Defense (DOD) spent $338M over that same period. The top spending civilian sector agencies were DHS ($119M), VA ($77M), HHS ($58M), Treasury ($35M) and DOJ ($34M). The top spending DOD organizations were DISA ($166M), Air Force ($94M), Army ($31M) and Navy ($22M).

Cloud-based Cybersecurity Spending by Solutions Area

Drilling deeper into specific cybersecurity solutions provided via cloud-based infrastructure we can see the diversity of technological solutions federal agencies are using by leveraging cloud computing capabilities. These solutions address both core cybersecurity functions via the cloud as well as addressing the security posture of cloud deployments. Taking the aggregate FY 2019-2021 contract obligations as well as the total contract value for these contracts reveals sustained demand for a wide variety of cloud-based cybersecurity solutions. (See chart below.)

However, spending on various solutions does vary from year-to-year and does not always represent consistent growth. For example, total spending on cloud-based Identity Access Management (IdAM) fell to $49M in FY 2021 after reaching a high of $82M in FY 2019. The drop likely suggests that agencies have already adopted the IdAM solutions they need and are now paying steady-state rates.

Similarly, spending also fell on Continuous Monitoring from $38M to $13M and Endpoint Security fell from $24M to $15M from FY 2019 to FY 2021. Not all solutions areas saw slower growth, however. Spending rose for Cloud Security from $60M to $68M and outlays for Cloud Access Points grew from $12M to $32M over these three fiscal years.

The conclusion to be drawn is that the prospects for each cloud-based cybersecurity solution area is tightly connected to the technological context and maturity level of each individual agency with which a solutions provider might seek to do business. A “one-size-fits-all” approach will not be successful.

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For more perspectives on the market growth potential of the federal cloud computing market, check out Deltek's Federal Cloud Computing Market, 2022-2024 report.