MA

Federal Information Security Market, 2021-2023

Published: October 29, 2021

FeaturedFederal Market AnalysisCybersecurity

Deltek's Federal Information Security Market, 2021-2023 examines the trends and drivers shaping the federal information security marketplace and provides a forecast for the next three years.

GovWin’s Federal Market Analysis (FMA) team has updated the Federal Information Security Market, 2021-2023 report to incorporate new information on the Department of Defense's Cybersecurity Maturity Model Certification (CMMC) program that was released since the report’s original publishing. 

Persistent threats, coordinated attacks, rapidly changing technologies, increasing interconnectivity and dependence on technology and data place securing federal information and infrastructure among the highest national security priorities. White House policy directives, legislative mandates, and evolving technologies are converging to drive agency cybersecurity efforts and supporting procurements. Challenges to progress are compounded by complex federal IT environments, where legacy IT operates alongside modern and emerging technologies. The increased use of mobile capabilities and cloud-based technologies, combined with the pursuit of emerging technologies such as machine learning and artificial intelligence, requires agencies to address current security needs while anticipating future requirements. Agencies are working to address cybersecurity priorities while in the midst of lingering operational challenges from the disruptive impacts of the COVID-19 pandemic. The paradigm shift to larger remote workforces adds to the challenge. These factors drive the demand for broad technological transformation and cybersecurity modernization efforts that, though challenging, present promising opportunities.

Driven by the plans and efforts to enhance agency cybersecurity postures across the federal government, Deltek forecasts the demand for vendor-supplied information security products and services by the U.S. federal government will increase from $13.9 billion in FY 2021 to $15.3 billion in FY 2023 at a Compound Annual Growth Rate (CAGR) of 4.8%.

Key Findings

  • Budget Growth. Cybersecurity budgets across federal agencies continue to show growth potential, driven by both operational and government-wide cyber policy directives. The DOD topline cyberspace activities budget for FY 2022 shows a modest increase from the FY 2021 level.
  • Sweeping Policies. Provisions in the May 2021 White House Cybersecurity Executive Order are having sweeping impacts, driving advances in vulnerability and incident detection; endpoint detection and response; and supply chain risk management, including software security. Supply chain provisions will impact acquisition rules and contract requirements.
  • Ubiquitous Zero Trust. Zero trust architectures and supporting efforts permeate nearly every aspect of federal IT and security. High-profile cybersecurity incidents, increased telework and dispersed workforces have coalesced to focus and accelerate pursuit of zero trust capabilities.
  • IT Modernization. The pandemic forced agencies to accelerate IT modernization efforts including cybersecurity investments such as Virtual Private Network (VPN) deployments and end-user protections. Government-wide efforts continue to shift the mix of technologies and approaches. Agencies are using Technology Modernization Fund (TMF) projects to fund high-priority cybersecurity enhancements.
  • Operational Enablers. Many federal agencies are exploring the use of artificial intelligence (AI) for continuous monitoring across networks, to automate cybersecurity functions and aid decision-making capacity.
  • Evolving Industry Standards. DOD’s review of their Cybersecurity Maturity Model Certification (CMMC) program has resulted in adjustments that impact program structure, requirements and timeline.

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 information security 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 information security 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 Information Security Market, 2021-2023 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.

FEDERAL INFORMATION SECURITY MARKET, 2021-2023

TABLE OF CONTENTS

Introduction

  • Purpose of this Report
  • Scope and Methodology
  • Deltek Survey Demographics
  • Key Findings

Budget Environment

  • FY 2022 IT Budget Request
  • FY 2022 Cybersecurity Priorities and Budgets
  • Defense Cyber Space Activities Budget
  • Cyber Activities in DOD RDT&E and Procurement Budgets

Federal Information Security Market Drivers

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

Spending Trends and Install Base

  • Total Information Security Prime Contract Obligations, FY 2018 – FY 2020
  • Contract Obligations for Product vs. Service
  • 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 Information Security Install Base – Software and Hardware

Market Forecast

  • Market Drivers and Inhibitors
  • Total Addressable Market, FY 2021-2023
  • Addressable Market by Buyer Segment
  • Addressable Market by Market Segment

Agency Analysis

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

Conclusions and Recommendations

  • Conclusions
  • Recommendations

Appendix

  • Deltek Information Security Segment Definitions
  • Keywords Used for Contract Obligation Analysis