Pandemic-Fueled Digitization Creates New Cybersecurity Risks—and an Opportunity for Infosec Firms
What do driverless cars have in common with the expansion of remote work? Whether the end user is a white-collar worker or a passenger in a self-driving car, the need for security is paramount. Both trends are possible, practical, and protected because of cybersecurity. The increasing digitization of our lives generates opportunities for unprecedented flexibility and innovation, but also for malfeasance should data or systems fall into the hands of the wrong person.
Driverless cars are a longtime part of sci-fi lore — but companies such as Tesla, Waygo, and Uber, are in a race to launch a mass-market driverless car, and are pouring money into hopes this will be a near-term reality. The global pandemic presents new, interesting use cases for driverless vehicles. A contact-free option to transport patients to hospitals and medications to overwhelmed clinics, for example, might prevent the spread of the disease and ensure quicker access to treatment and care. But for cybersecurity experts, those benefits could be outweighed by a sinister risk: hackers.
Meanwhile, 40% of companies named IT security as their top post-COVID priority thanks to the host of needs and concerns raised by the sudden work-from-home transition during lockdowns and quarantines. Existing enterprise customers for cybersecurity companies are poised to grow that investment to support remote work; employers that had given the security of their data little consideration before COVID-19 are scrambling to meet that need. Before the pandemic, the market was already worth over $115 billion. Now, it is projected to nearly double by 2021.
Addressing existing cybersecurity threats accounts for a large part of this growth. But it is also fueled by the emerging cloud-based and interconnected future that attracts both boundless innovation and bad actors. Cybersecurity companies that are effective gatekeepers in one sector generate new customers in another; web security service Akamai, for example, is now responsible for serving 15% to 30% of all web traffic. Founded in 1998 in Cambridge, Massachusetts, Akamai had $2.8 billion in revenue in 2019 and exceeded consensus estimates in the first quarter, with an 8% revenue increase.
Driverless cars are not truly autonomous; they are connected to a network through the same system that lets them operate without a driver, and their data is collected and overseen from a separate location. A hacker infiltrating that system could cause not just an individual car to crash or divert, but a whole fleet to be at the mercy of an unknown operator. That same hacker could impersonate a company employee, gain access to sensitive information, and use it to commit a crime or simply wreak havoc.
It’s a terrifying prospect, but one that cybersecurity engineers are already dedicated to solving; improved machine learning, for instance, can create an iterative defense system to identify and target new threats. Firms like Splunk and Palo Alto are already making this happen, translating the increasing amount of data in cyberspace into proactive protective actions, and seeing fast growth as a result.
San Francisco-based Splunk, which reported $1.7 billion in revenue last year, reported a 52% increase in annual recurring revenue during the first quarter, and projected 40-45% growth each year bewteen 2021 and 2023. Palo Alto Networks, a leading integrated cybersecurity provider founded in Santa Clara in 2005, serves 85 of Fortune 100 companies. Subscriptions and support & maintenance account for 70% of Palo Alto Networks’ total annual revenue, and grew37% and 22%, respectively.
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