Deltek Forecasts Sustained Growth in the Federal Cybersecurity Market

Published: October 27, 2023

Federal Market AnalysisCybersecurityForecasts and SpendingPolicy and Legislation

Federal cybersecurity challenges and priorities continue to drive contracting opportunities for supporting products and services.

Securing the federal technology landscape continues to present challenges for agencies large and small. Government-wide directives from the White House and Congress, along with evolving technology standards and acquisition rules, propel agency cybersecurity efforts and related procurements of supporting commercial solutions.

Deltek's report, Federal Cybersecurity Market, 2023-2027 examines the trends and drivers shaping the federal cybersecurity marketplace and provides a forecast for the next five years.

Assessing the federal cybersecurity market from a broad perspective, we see five categories of major drivers that continue to spur demand for government-wide and agency budget investments:

  • Threat Environment – The complex and diverse threats to networks, devices, data and infrastructure.
  • Technology Policy – Security compliance, standards, and management policies addressing government-wide priorities.
  • Acquisition Policy – Cybersecurity is a growing requirement within acquisition policy.
  • Technology Solutions – Technical remedies to improve security and emerging technologies that require security for greater adoption.
  • Workforce Strategies - Efforts to establish the leadership, organizations, programs, and skilled workforce to meet the cybersecurity challenge.

Driven by the numerous plans and initiatives aimed at enhancing agency cybersecurity postures across the federal government, Deltek forecasts the demand for vendor-supplied cybersecurity products and services by the U.S. federal government will increase from $15.8 billion in FY 2023 to $20.1 billion in FY 2027. (See chart below.)

Key Findings

  • Growing Cyber Budgets. Agency cybersecurity budgets continue to grow to support implementation of both agency-centric operational objectives and government-wide cyber policy directives. Part of these budgets will focus on addressing workforce deficiencies and skill gaps that hamper progress.
  • Renewed Strategy. The National Cybersecurity Strategy sets a broad framework for a wide range of cyber policies and agency priorities. The National Cybersecurity Strategy Implementation Plan drives strategic and operational shifts that will impact agency and industry requirements alike.
  • Broad Directives. Elements in the 2021 White House Cybersecurity Executive Order continue to have sweeping impacts. Zero trust architectures and supporting efforts permeate nearly every aspect of federal IT and security. Supply chain risk management, including software, impacts acquisition rules and contract requirements. Investments in Security Orchestration, Automation and Response, Secure Access Service Edge, Identity, Credentialing and Access Management and Security Information and Event Management continue as agencies work to fill cyber capability gaps.
  • Raising Expectations. DOD’s CMMC program continues to evolve, while maintaining its focus on NIST standards. CMMC requirements are anticipated under a proposed rule, which would give contractors another year to comment and prepare for compliance.
  • Supportive Innovations. Many federal agencies continue to explore the use of AI and data analytics to augment and automate cybersecurity capabilities, including continuous monitoring across networks.

Growth Drivers

Persistent threats, lingering vulnerabilities, coordinated attacks, rapidly evolving technologies and complex information environments places safeguarding federal information and networks among the highest of government priorities. Agency cybersecurity postures are tested by complex, hybrid IT environments consisting of legacy systems, modern cloud deployments and emerging technologies operating across a mix of government-owned and commercially-provided infrastructure.

Growing demand for greater digital government services, mobile capabilities, cloud-based applications and advanced computational technologies – such as data analytics and artificial intelligence – presents agencies with multifaceted security challenges and potential leapfrog opportunities. These factors drive ongoing federal cybersecurity modernization efforts that present promising contractor opportunities over the next five years.

Get more of our perspective in the full report, Federal Cybersecurity Market, 2023-2027.