U.S. Firms Strengthen Cybersecurity as Data Breaches Soar

Rhea-AI Summary

The 2024 ISG Provider Lens™ Cybersecurity report reveals that U.S. enterprises are intensifying their cybersecurity investments due to a surge in data breaches. Key findings include:

1. Healthcare and financial services are the most targeted sectors.
2. Companies are adopting AI for vulnerability analysis and prediction.
3. Extended Detection and Response (XDR) and Security Service Edge (SSE) are becoming essential.
4. Large enterprises are implementing Zero Trust Architectures (ZTAs).
5. SMBs are focusing on fundamental security measures and managed services.

The report evaluates 108 providers across ten quadrants, with IBM leading in six quadrants. Other notable leaders include Accenture, Deloitte, and TCS.

Positive

• Increasing adoption of AI technologies for vulnerability analysis and protection
• Growing implementation of Zero Trust Architectures (ZTAs) by large enterprises
• Rising demand for cybersecurity tools and services in the U.S. market
• Emergence of extended detection and response (XDR) and security service edge (SSE) as essential enterprise platforms

Negative

• Significant rise in data breaches between 2022 and 2023
• Increased complexity for enterprise security teams due to new laws and proposals
• Growing risk from attacks against third-party vendors in complex supply chains
• Resource constraints for SMBs in implementing comprehensive security measures

Market Research Analyst

The surge in cybersecurity investments by U.S. enterprises is a significant trend with far-reaching implications for the tech sector and related industries. This uptick is driven by an alarming increase in data breaches, particularly targeting healthcare and financial services. The report highlights several key developments:

• Growing adoption of AI for vulnerability analysis and threat prediction
• Shift towards zero trust architectures (ZTAs) among large enterprises
• Increasing focus on supply chain security
• Rising demand for managed security services among SMBs

These trends indicate a maturing cybersecurity market with potential for sustained growth. For investors, this suggests opportunities in companies providing advanced cybersecurity solutions, AI-powered security tools and managed security services. However, the market's complexity and the rapid pace of technological change may lead to consolidation, favoring established players with comprehensive offerings.

The report's identification of IBM, Accenture, Deloitte and TCS as leaders in multiple quadrants underscores the strength of large, diversified tech consultancies in this space. This could signal potential outperformance for these firms in the cybersecurity segment. Conversely, the emergence of specialized providers as leaders in specific quadrants suggests a fragmented market with room for niche players to capture market share in specialized areas.

Overall, the cybersecurity sector appears poised for continued growth, driven by regulatory pressures and the evolving threat landscape. Investors should monitor both established leaders and innovative newcomers in this dynamic market.

Tech Expert

The cybersecurity landscape is undergoing a significant transformation, with several technological shifts worth noting:

• The rise of Extended Detection and Response (XDR) and Security Service Edge (SSE) as essential enterprise platforms marks a move towards more integrated, cloud-native security solutions.
• The adoption of Zero Trust Architectures (ZTAs) represents a fundamental shift in security philosophy, moving away from perimeter-based models to a more granular, identity-centric approach.
• The integration of AI in cybersecurity tools for predictive analysis and threat detection is a game-changer, potentially improving response times and accuracy.
• Emerging technologies like quantum computing and passwordless identity access management are on the horizon, promising to reshape the cybersecurity landscape further.

These trends suggest a growing sophistication in enterprise security strategies, with a focus on resilience and adaptability. The mention of companies rationalizing their security stacks indicates a move towards more efficient, integrated solutions, which could benefit providers offering comprehensive platforms.

For investors, this technological evolution presents both opportunities and challenges. Companies at the forefront of XDR, SSE and AI-powered security solutions may see increased demand. However, the rapid pace of innovation also means that today's leaders could quickly become tomorrow's laggards if they fail to keep up.

The report's emphasis on cloud-based security offerings for SMBs also highlights a growing market segment. This trend could benefit cloud-native security providers and managed security service providers (MSSPs) catering to smaller businesses.

Overall, the cybersecurity sector appears to be in a state of rapid technological advancement, driven by the need to counter increasingly sophisticated threats. This dynamic environment favors agile, innovative companies capable of delivering cutting-edge solutions while also addressing the growing complexity of regulatory compliance.

Financial Analyst

The cybersecurity market is showing strong growth signals, driven by increasing threats and regulatory pressures. This trend has several financial implications:

• Increased enterprise spending on cybersecurity solutions and services, potentially boosting revenues for leading providers.
• Growing demand for AI-powered security tools, which could lead to higher margins for companies with advanced AI capabilities.
• Rising adoption of managed security services, especially among SMBs, suggesting a stable, recurring revenue stream for MSSPs.
• Potential for market consolidation as companies seek to offer comprehensive security platforms, which may lead to M&A activities.

The report's identification of multiple leaders across various quadrants suggests a competitive market with no single dominant player. This competition could pressure margins but also drive innovation.

Investors should note the strong positioning of large tech consultancies like IBM, Accenture, Deloitte and TCS. These firms' broad capabilities and established client relationships could translate into sustained market share and revenue growth in the cybersecurity segment.

The emergence of specialized providers as leaders in specific quadrants indicates opportunities for niche players. However, the trend towards integrated solutions might favor larger, more diversified companies in the long term.

The increasing complexity of regulatory compliance mentioned in the report could drive demand for compliance-focused security solutions, potentially creating a lucrative sub-segment within the broader cybersecurity market.

Overall, the cybersecurity sector appears poised for continued growth, with potential for both revenue expansion and margin improvement as companies leverage AI and other advanced technologies. However, investors should be mindful of the sector's rapid evolution and the potential for swift changes in competitive positioning.

Enterprises update their arsenals with new tools and services to defend against rising wave of more advanced attacks, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Enterprises in the U.S. are strategically investing in cybersecurity services as data breaches continue to grow in number and sophistication, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Cybersecurity — Solutions and Services report for the U.S. finds that data breaches rose significantly between 2022 and 2023, with healthcare and financial services firms targeted most often. The federal government and some states responded with laws and proposals forcing companies to improve their defenses, making the work of enterprise security teams even more complex.

“New threats and powerful attack mechanisms have exposed weaknesses in critical infrastructure at U.S. companies,” said Doug Saylors, partner and co-leader of ISG Cybersecurity. “CISOs of leading enterprises are re-evaluating their strategies, focusing on business resilience.”

While U.S. demand for cybersecurity tools and services grows, many organizations are rationalizing their security technology stacks to reduce cost and optimize resource utilization, the report says. Companies are increasingly deploying AI technologies to aid in analyzing data to prioritize vulnerabilities and protect areas where they predict the worst damage.

Several emerging technologies, including quantum computing and passwordless identity access management, are rapidly gaining potential. Globally, extended detection and response (XDR) and security service edge (SSE) are becoming essential enterprise platforms.

More organizations, especially large enterprises, are implementing zero trust architectures (ZTAs) in place of traditional perimeter-based security to shrink potential attack surfaces and minimize the impacts of breaches, ISG says. This requires skilled personnel and significant investments in access controls, identity management and continuous verification.

Large companies with complex supply chains face growing risk from attacks against third-party vendors linked to their IT systems, the report says. They are beginning to assess these vendors’ security postures and take a stronger role in managing risk across the supply chain.

Many small and medium-sized businesses (SMBs) are focusing on fundamental security measures such as automated patch management and user education, ISG says. For technologies and skills beyond the reach of internal IT departments, small firms are turning to managed security services and cloud-based security offerings.

“SMBs have fewer resources and may present smaller targets to attackers, but many are instituting strong security practices with help from service providers,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.

The report also explores other cybersecurity trends in the U.S., including increasing adoption of cybersecurity insurance and AI-powered advanced threat detection and response.

For more insights into major security challenges at U.S. enterprises, including the growing difficulty of regulatory compliance and rising pressure to understand all risks when adopting new technologies, plus ISG’s advice for addressing these issues, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Cybersecurity — Solutions and Services report for the U.S. evaluates the capabilities of 108 providers across ten quadrants: Identity and Access Management, Extended Detection and Response, Security Service Edge, Technical Security Services (Large Accounts), Technical Security Services (Midmarket), Strategic Security Services (Large Accounts), Strategic Security Services (Midmarket), Managed Security Services — SOC (Large Accounts), Managed Security Services — SOC (Midmarket) and Digital Forensics and Incident Response.

The report names IBM as a Leader in six quadrants. It names Accenture, Deloitte and TCS as Leaders in four quadrants each. Capgemini, Cyberproof, Cyderes, Eviden, HCLTech, Infosys, Kudelski Security, Optiv, Proficio, PwC, Rackspace Technology, Trustwave, Unisys and Wipro are named as Leaders in three quadrants each. Broadcom, EY, KPMG, Kroll, Microsoft, Palo Alto Networks, Presidio, Thales and Verizon Business are named as Leaders in two quadrants each. BeyondTrust, Cato Networks, Cisco, Critical Start, CrowdStrike, CyberArk, Forcepoint, Fortinet, Netskope, Okta, One Identity (OneLogin), Ping Identity, SailPoint, Saviynt, SentinelOne, Trend Micro, Versa Networks and Zscaler are named as Leaders in one quadrant each.

In addition, EY and Persistent Systems are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants each. Capgemini, Kroll, ManageEngine, Microland, Skyhigh Security and Trellix are named as Rising Stars in one quadrant each.

In the area of customer experience, Zensar Technologies is named the global ISG CX Star Performer for 2024 among cybersecurity providers. Zensar Technologies earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from Cyberproof and IBM.

The 2024 ISG Provider Lens™ Cybersecurity — Solutions and Services report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725455822/en/

Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com

Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What are the most targeted sectors for data breaches in the U.S. according to the ISG report?

According to the 2024 ISG Provider Lens™ Cybersecurity report, healthcare and financial services firms are the most frequently targeted sectors for data breaches in the U.S.

How are U.S. enterprises responding to the increase in data breaches?

U.S. enterprises are strategically investing in cybersecurity services, adopting AI technologies for vulnerability analysis, implementing Zero Trust Architectures (ZTAs), and focusing on business resilience to respond to the increase in data breaches.

What emerging technologies are gaining potential in cybersecurity according to the ISG report?

The ISG report highlights quantum computing and passwordless identity access management as rapidly gaining potential in the cybersecurity field.

How many providers were evaluated in the 2024 ISG Provider Lens™ Cybersecurity report for the U.S.?

The 2024 ISG Provider Lens™ Cybersecurity report for the U.S. evaluated the capabilities of 108 providers across ten quadrants.

Which company was named as a Leader in the most quadrants in the ISG cybersecurity report?

IBM was named as a Leader in six quadrants, the highest number among all providers evaluated in the 2024 ISG Provider Lens™ Cybersecurity report for the U.S.