Federal Cybersecurity Market, 2023-2027

Published: October 27, 2023

Federal Market AnalysisCybersecurityForecasts and SpendingPolicy and Legislation

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

Securing the federal technology landscape continues to present challenges for agencies large and small. 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. 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.

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.


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.


Market Segments

This report identifies and analyzes the trends and drivers impacting the market’s growth, and categorizes and sizes the following five major segments within the federal cybersecurity marketplace:

  • Security Operations Services
  • Governance, Strategy and Compliance
  • Security Tools and Appliances
  • Identity and Access Management (IAM) Technology and Support
  • Training, Education and Awareness

Critical Insight for Vendors

This report provides a view of diverse factors driving the federal cybersecurity market with market sizing for the Defense, Civilian, and Intelligence segments and spending by federal departments, their major cybersecurity activities, and how dollars flow across segments. The report provides recommendations to guide solution providers in maximizing their market positioning to best take advantage of federal business opportunities.

Deltek’s Federal Cybersecurity Market, 2023-2027 is delivered in PowerPoint® presentation format, including an Executive Briefing presentation summarizing the key findings and an Excel® workbook with data for the various forecasts and other key findings.




  • Purpose of this Report
  • Scope and Methodology
  • Key Findings


Budget Environment

  • FY 2024 IT Budget Request
  • FY 2024 Cybersecurity Priorities and Budgets
  • Defense Cyber Space Activities Budget
  • Cyber Activities in DOD RDT&E and Procurement Budgets
  • Cybersecurity R&D Budgets


Federal Cybersecurity Market Drivers

  • Threat Environment
  • Technology Policy
  • Acquisition Policy
  • Technology Solutions
  • Workforce Strategies


Spending Trends and Install Base

  • Total Cybersecurity Prime Contract Obligations, FY 2020 – FY 2022
  • Contract Obligations by Buyer Segment
  • Contract Obligations by Top Departments
  • Contract Obligations by Top Vendors
  • Contract Obligations by Top Vendors for Civilian vs. Defense
  • Contract Obligations by Contract Type
  • Contract Obligations by Top Contract Vehicles
  • Contract Obligations by Business Size
  • Federal Cybersecurity Install Base – Software and Hardware
  • Cybersecurity OTA Spending, FY2020 – FY 2022
  • Cybersecurity-Related SBIR and STTR Awards, FY2020 – FY 2022


Market Forecast

  • Market Drivers and Inhibitors
  • Total Addressable Market, FY 2023-2027
  • Addressable Market by Buyer Segment
  • Addressable Market by Market Segment


Agency Analysis

  • Defense Agencies
  • Air Force
  • Navy
  • Army
  • Homeland Security
  • Justice
  • HHS
  • Energy
  • Treasury
  • Commerce
  • Veterans Affairs
  • NASA
  • Transportation
  • Interior
  • State
  • Agriculture
  • GSA
  • SSA
  • Education
  • Labor
  • EPA
  • HUD
  • Intelligence Community


Conclusions and Recommendations

  • Conclusions
  • Recommendations



  • Deltek Cybersecurity Segment Definitions
  • Contract Obligation Analysis Keywords