The ever-evolving technology sector has truly transformed our lives but not without some hiccups some may argue. That’s because cyber crime, which is a broad word meaning the destruction of data, identity theft, spying and more have come along with it. Enterprises and government agencies are constantly threatened by hackers and therefore have to be vigilant about their cyber security measures.
Over the past few years, high-profile business houses and government agencies have reported a significant rise in data breaches which, in turn, prompted them to impose tighter security measures.
The latest data breach was reported by FXCM Inc. FXCM, an online foreign exchange trading and related service provider, on Oct 1. According to the company, hackers gained unauthorized access to customer information and a few transfers were made from certain accounts. However, the loss was later compensated by the company.
Earlier, in June, the Office of Personnel Management (OPM), a U.S. federal agency that keeps employee information and handles security clearances, revealed that personal data of about four million current and former federal U.S. employees was compromised as a result of a cyber attack. This follows a couple of high-profile data breaches that affected customer data at Apple Inc. AAPL, Target Corporation TGT and The Home Depot Inc. HD.
The continuous data breaches have proved the inadequacy of the security measures imposed by some of the big corporate houses and government agencies, especially in the wake of increasingly sophisticated attacks.
Per the Center for Strategic and International Studies, cyber crime is a fast expanding business with high returns and low risks. The study projects that companies incur losses of about $445 billion per year globally due to these attacks.
Citing an Identity Theft Resource Center (ITRC) report, 24/7 Wall St. reported that 563 data breaches have been recorded this year to-date Sep 22. Also, ‘Key Findings from the Global State of Information Security Survey 2015’ by PWC indicated that cyber security instances increased at a CAGR of 66% from 2009 to 2014.
Scope of Cyber Security Industry
The long list of data breaches is really putting the Internet security market in focus as companies are beginning to realize the necessity of beefing up cyber safety measures.
Moreover, with rapid technological advancement, more organizations are adopting the “bring your own device” (BYOD) policy to enhance employee productivity with anytime, anywhere access. This trend, on the other hand, has made it necessary for companies to enforce stricter data security measures.
It should also be noted that cyber security companies are witnessing double-digit growth, while overall IT spending is anticipated to shrink 5.5% year over year to $3.5 trillion in 2015, according to research firm, Gartner. The research firm also estimates that worldwide spending on IT security in 2014 was about $70 billion which is likely to jump to $76.9 billion this year.
This indicates that business houses and government agencies would rather compromise on other IT expenses than security measures which we believe will enhance long-term growth prospects for cyber security providers.
From being a niche industry a decade ago, cyber security has grown into a very important segment in the IT space. In fact, some analysts expect the market to grow at a CAGR of 9.8% and reach about $170 billion by the end of this decade.
Five Stocks That Can Change How We Protect Our Data
Though millions of dollars and data are lost due to cyber crime, there does appear to be a positive side to it. Cyber security companies stand to gain from data breach as the chances of security-related purchase increase.
While there are plenty of players in the industry, we would like to highlight five major companies that are projected to change the way we protect data.
VASCO Data Security International Inc. VDSI
VASCO designs, develops, markets and offers cyber security products and services to corporate and government customers. Vasco's software and hardware products deliver robust, flexible and effective Internet and enterprise security solution to over 10,000 organizations across more than 100 countries.
VASCO strives to expand its offerings through innovations and acquisitions. The company recently launched a comprehensive risk management solution — IDENTIKEY Risk Manager — to quickly detect and mitigate cyber attacks. Earlier this month, the company signed an agreement to acquire Silanis Technology Inc., a leading provider of electronic signature (e-signature) and digital transaction solutions used to sign, send and manage documents.
Check Point Software Technologies Ltd. CHKP
Check Point is a leading provider of policy-based enterprise security and traffic management solutions. Through its patented Stateful Inspection technology, the company delivers secure enterprise connectivity solutions to protect information and enhance the performance of enterprise networks.
Check Point pursues strategic alliances and acquisitions to boost its cyber security capabilities. Moreover, for the past few months, the company has undertaken several measures to tap the mobile security business which is gaining from the recent increase in the adoption of BYOD policy.
In April, Check Point acquired Lacoon Mobile Security, an enterprise-level security solution provider for iOS and Android-based mobile devices. Moreover, in September, the company struck a new deal with privately-owned Acronis, a provider of data backup, recovery and security solutions that cater to all computing verticals. As part of this collaboration, Check Point Capsule, a mobile security solution, will be combined with Acronis Access Advanced, a secure access, sync and share solution, to protect mobile devices such as phones, tablets, laptops or smartphones.
FireEye Inc. FEYE
FireEye offers a platform for enterprises and governments to facilitate web security, email security, file security and malware analysis.
FireEye has formed strategic alliances across various industries to expand its business. In the first half of 2015, the company partnered VISA (V) to create cyber security tools and services. The first-of-its-kind partnership will generate incremental revenues for FireEye.
Fortinet Inc. FTNT
Fortinet offers network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. Its solutions are designed to integrate multiple levels of security protection, including firewall, virtual private networking, anti-virus, intrusion prevention, web filtering, anti-spam and wide area network acceleration.
Fortinet has made strategic acquisitions to expedite growth. The most recent was the acquisition of Meru Networks, a company engaged in the development and marketing of a virtualized wireless LAN solution. The acquisition will strengthen Fortinet’s cloud capabilities and expand its solutions portfolio, thereby addressing the $5 billion worldwide enterprise Wi-Fi market with integrated and intelligent secure wireless solutions.
Palo Alto Networks Inc. PANW
Palo Alto offers a network security platform to enterprises, service providers and government entities. The company's firewall forms the core of the platform that delivers natively integrated application, user, and content visibility and control through its operating system, hardware and software architecture.
Palo Alto has made strategic acquisitions to boost growth. Over the last few years, the company completed three important buyouts to broaden its portfolio and global reach.
Most recently, the company acquired CirroSecure, a start-up which specializes in guarding Software-as-a-Service (SaaS) applications. CirroSecure's resources and expertise will help Palo Alto in expanding the functionality of its enterprise security platform and guard the SaaS collaboration products of Salesforce.com, Google Drive, Box and Dropbox better.
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