Cybersecurity space could see increased spending and expansion in 2017

Cybersecurity has stayed in focus since Donald Trump won the US presidential election on November 8, 2016. The policy section of his website included his plan to “order an immediate review of all U.S. cyber defenses and vulnerabilities.”

According to Cybersecurity Ventures’s 4Q16 report, the global cybersecurity space is expected to grow at a CAGR[1. compound annual growth rate] of 9.8% from ~$106.3 billion in 2015 to ~$170.2 billion by 2020. Approximately $1 trillion is expected to be spent globally on cybersecurity from 2017–2021.

A Trump Presidency Could Benefit FireEye in Cybersecurity Space

Financial companies and governments have increased allocations toward their cybersecurity budgets. JPMorgan Chase (JPM) raised its annual cybersecurity budget from $250 million to $500 million. Bank of America (BAC) noted that it wouldn’t restrict itself to any budget to combat cybercrime.

The US government’s spending on cybersecurity is forecasted to reach $19 billion in fiscal 2017. In a research paper, Morgan Stanley (MS) noted that in 2012, President Obama identified cybersecurity as “one of the most serious economic and national security challenges we face as a nation.”

In 2015, FireEye (FEYE) was ranked as the top company in the list of what Cybersecurity Ventures considered “the hottest and most innovative cyber security companies to watch.” However, the company slid into ninth position in 2016. Later in this series, we’ll explore the factors that pressured FireEye.

IBM Security (IBM), Check Point Software (CHKP), Palo Alto Networks (PANW), and Cisco (CSCO) were other players in this space who were positioned ahead of FireEye on the 2016 list, ranking third, fourth, fifth, and sixth, respectively.

Factors fueling expansion in the cybersecurity space

We know that rapid innovation and developments in big data, cloud, and mobile computing are transforming the information technology sector.

In October 2016, we noted that the SMAC (social, mobile, analytics, and cloud) revolution, the BYOD (bring-your-own-device) concept, IoT (Internet of Things), and increase in the mobile workforce are the top factors that have enabled consumers and employees to access confidential data and information outside secure data centers and firewalls.

As a result, companies are either spending billions of dollars in upgrading their systems, or they are entering into partnerships with security firms to protect their data and expand their cybersecurity space.

Later in this series, we’ll see how FireEye aims to benefit from growth in this space with its strategic initiatives.

Latest articles

Marathon Petroleum (MPC) stock has been tumbling in Q3, driven by geopolitical tensions, oil price uncertainty, and weaker refining conditions.

This week, AT&T CEO Randall Stephenson noted that AT&T (T) is on track to reduce its leverage multiple to about 2.5x by the end of this year.

Jeff Bezos announced that Amazon had placed an order of 100,000 electric delivery vans from Michigan-based startup Rivian.

Bad news on the trade war front appears to have led to a fall in the broader US equity markets today. Cannabis ETFs were also trading in the red.

Energy Transfer (ET) stock has recovered in the last two trading sessions after investors hammered it on its plans to acquire SemGroup (SEMG).

Software-as-a-service company Datadog (DDOG) made a smashing debut on Wall Street yesterday. After its IPO, DDOG's shares surged 40% in intraday trading.