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IBM Is Focusing on Cybersecurity: Here’s Why

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Mar. 1 2017, Updated 4:35 p.m. ET

Increased spending and expansion in 2017

Earlier in this series, we discussed IBM’s acquisition of Agile 3 Solutions, which is in line with the company’s focus on cybersecurity and its Strategic Imperatives segment. Cybersecurity is a rapidly growing market. With Donald Trump as president, cybersecurity is likely to be the highlight of the technology industry in 2017.

According to a Cybersecurity Ventures report, approximately $1 trillion is expected to be spent globally on cybersecurity between 2017 and 2021. The US government’s spending on cybersecurity is forecast 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.”

This challenge explains why leading technology players such as IBM, Cisco Systems (CSCO), and Dell are taking an interest in the security software and services space.

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Cybersecurity market expects double-digit growth rate

According to an Allied Market Research report released in late 2016, the cybersecurity market is projected to expand at a CAGR (compound annual growth rate) of 15.5 % between 2016 and 2022, to become a $198 billion market by 2022. Channel Partners, citing this report, stated that Cisco, IBM, Symantec, Trend Micro, and FireEye (FEYE) were “’prominent players’ now and for the future of security growth because they ‘focus on product launch, acquisition, and partnership for expansion in the market.’”

The above chart, based on data provided by CrunchBase, shows the companies that have made the most cybersecurity acquisitions. Symantec’s (SYMC) purchase of Blue Coat Systems in mid-2016 is viewed as the most significant acquisition in the cybersecurity space so far.

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