the u.s. cybersecurity market - business sweden€¦ · target, sony and anthem have cost ......

CONFIDENTIAL

FOR INTERNAL USE WITHIN CLIENT COMPANY ONLY

THE U.S. CYBERSECURITY

MARKET

Business Sweden in the USA

March 2015

Introduction

U.S. Cybersecurity Market Overview

BUSINESS SWEDEN 7 AUGUST, 2015 2

AGENDA

Operations in Sweden

Headquarters in Stockholm

Regional Export Advisors across Sweden

Trade Commissioners and Managers regularly visit

different parts of Sweden

Operations Abroad

Nearly 400 employees in over 50 countries

Through our partner network we cover more than 100

countries worldwide

Business Sweden USA

Operational since 1949

Offices in Chicago, New York and San Francisco

Nearly 20 local and Swedish employees

7 AUGUST, 2015 BUSINESS SWEDEN 3

BUSINESS SWEDEN MAKES IT EASIER FOR SWEDISH

COMPANIES TO GROW INTERNATIONALLY

BUSINESS SWEDEN AIMS TO BE THE PRIMARY CONSULTING PARTNER FOR SWEDISH FIRMS DOING BUSINESS IN THE U.S.

ESTABLISH PRESENCE

CHOOSE STRATEGY

EXAMINE OPPORTUNITIES

Step 2

Step 3

Step 1

DEVELOP BUSINESS Step 4


THE UNITED STATES, IN BRIEF

SOURCES: CIA WORLD FACTBOOK, STATISTICS SWEDEN

Area: 9.8 million square kilometers – almost 22 times the size of Sweden

Population: 319 million people

Government: Constitution-based federal republic with a strong democratic tradition

Head of government: President Barack Obama

Legislature: U.S. Congress, comprised of Senate (upper house) and House of Representatives

(lower house)

Languages spoken: English (82.1%), Spanish (10.7%), other European languages (3.8%), Asian or

Pacific Island languages (2.7%), other languages (0.7%)

Currency: U.S. Dollar, $

GDP per capita: $52,800*

Inflation rate: 1.5%*

Main exports and imports: Agricultural products, industrial supplies, capital goods, consumer goods

Swedish exports to the U.S. in 2013: 68 billion SEK

Swedish imports from the U.S. in 2013: 28 billion SEK

*2013 ESTIMATED AVERAGES


CYBERSECURITY (CS) INCLUDES VARIOUS SOLUTIONS

THAT ARE ADAPTED TO DIFFERENT SECTORS

SOURCE: DOD, CATAPULT CONSULTANTS, CSC

Cybersecurity: security applied to computing devices such as computers and smartphones, as well as

computer networks such as private and public networks, including the whole Internet

Example industries and applicable solutions and strategies

Healthcare

Incident response

Technology development,

research & standards

integration

Cybersecurity policy and

strategy development

Physical and CS critical

infrastructure protection

Crisis and risk management

Defense

The Department of Defense's

CS strategy focuses on four

key areas:

Establishing a strong

cyber defense position

Transforming cyber

defense operations

Enhancing cyber

situational awareness

Ensuring survivability

against attacks

Financial Services

Identity management

Compliance

Business continuity

Disaster recovery

Consulting

Access control

Single sign on

VLAN

Email screening

VPN

Policy enforcement

Firewall

Introduction

U.S. Cybersecurity Market Overview


AGENDA

TOTAL CYBERSECURITY SPENDING

BUSD

79

109

66

83

0

20

40

60

80

100

120

2013 2014 2015f 2016f

USA Rest of world

THE U.S. PUBLIC KNOWS CS IS IMPORTANT


THE U.S. CS MARKET LEADS THE WORLD IN OVERALL

SPENDING AND STRONG GROWTH WILL CONTINUE

SOURCE: MARKETSANDMARKETS, PWC, YOUGOV, NASDAQ

HIGH IT SECURITY SPENDING SHOWS INCREASING AWARENESS AND INTEREST IN PREVENTING ATTACKS

High profile

security

breaches

Public

Interest

Hacks on large companies like

Target, Sony and Anthem have cost

revenue and public trust

7% of U.S. organizations lost 1

MUSD or more from cybercrime in

2013, compared to 3% globally

Increased

dependency

on IT

All sectors rely on IT systems to

relay sensitive information

E-commerce is a vital platform for

billions of dollars worth of

transactions each year in the U.S.

68% of Americans believe that

cybersecurity is very important

There is a trend of government CS

spending and regulations

increasing

COST OF CYBER CRIME BY INDUSTRY

MUSD, 2014

INDUSTRIES ARE NOW FOCUSING ON CS

Cybercriminals target utility and energy organizations in

the U.S. due to their potential to disrupt the economy

and their weak defenses

Financial services organizations are often targeted by

hackers with financial motivations

69% of U.S. executives are worried that cyber-threats

will affect growth

75% of Chief Information Officers feel that CS was a

top priority and that their companies would increase

spending to support the initiatives

Healthcare devotes the largest share of its IT budget

to CS at 5.6%, financial services spends 5.5% and

retail spends only 4% of its IT budget on cybersecurity

In 2014, financial services organizations invested an

average of 2,500 USD per employee in CS compared

to retail organizations investing 400 USD per employee


CYBERSECURITY IS A GROWING PRIORITY IN THE

PRIVATE SECTOR ACROSS INDUSTRIES

SOURCE: PONEMON INSTITUTE; HEWLETT-PACKARD (HP ENTERPRISE SECURITY), PWC, TELECOM INDUSTRY ASSOCIATION, PIPER JAFFRAY, INFORMATION WEEK, WALL STREET JOURNAL

U.S. COMPANIES RECOGNIZE THE IMPORTANCE OF CS AND HAVE INCREASED THEIR CS IT BUDGETS

0

5

10

15

20

25

30


PUBLIC AND PRIVATE AGENCIES ARE IMPLEMENTING

CS STANDARDS TO BENEFIT CONSUMERS

SOURCE: DELL SAFEWORKS, OF DIGITAL INTEREST, CALIFORNIA LEGISLATIVE INFORMATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

The Security Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE)

implemented its Cybersecurity Initiative in April 2014 to assess and encourage cyber security

preparedness at financial institutions

The OCIE Cyber Initiative was in response to recent cyberattacks on financial institutions

OCIE Cyber

Security

Initiative

NEW CS REGULATIONS REQUIRE KEY SECTORS TO UPGRADE CYBERSECURITY TO BE IN COMPLIANCE

The Health Insurance Portability and Accountability Act (HIPAA) requires most types of medical

businesses to encrypt stored or transmitted health information if “reasonable and appropriate”

Many states, including California and New Jersey, have recently added extra requirements to

safeguard patient data, often in response to attacks, like that on Anthem Health Insurance

HIPAA and state legislatures have instituted these rules in an attempt to protect confidentiality and

availability of information from evolving cyber attacks

HIPAA

Payment Card Industry (PCI) Compliance Regulations aim to ensure the privacy and

confidentiality of payment card information within an organization that has access to or stores

that data

By preventing ever advancing cyberattacks, payment processing companies can minimize the

costs of lawsuits, fines and decreased customer trust

PCI

Compliance

REGULATORY COMPLIANCE HAS BEEN A MAJOR FACTOR DRIVING CORPORATE SPENDING ON CS IN THE U.S.

CS SPENDING BY U.S. FEDERAL GOVERNMENT

BUSD

0

2

4

6

8

10

12

14

16

2013 2014 2015 2016f

GOVERNMENT SPENDING ON CS IS INCREASING

The Federal government spent 78.8 BUSD on CS

between 2006 and 2013 under the Federal Information

Security Management Act of 2002 (FISMA)

Obama has requested 14 BUSD in the 2016 U.S.

budget for cybersecurity and favors defensive action

A large portion of the funding will go to the

Continuous Diagnostics and Mitigation program,

which secures and monitors networks in real-time for

all civilian agencies

Despite budget cuts to IT that started in 2013 under the

Budget Control Act of 2011, the U.S. government is

committed to increasing CS funding

President Obama has committed to investing in cutting-

edge CS technology under the Comprehensive National

Cybersecurity Initiative

In 2012, at least 42% of states allocated between 1-2%

of their IT budget to cybersecurity


THE U.S. GOVERNMENT IS A MAJOR PURCHASER OF CS

SOLUTIONS

SOURCE: MERATUS, GOVTECH, DELOITTE, AVASECENT, U.S. HOUSE OF REPRESENTATIVES , WHITEHOUSE.GOV

CS SPENDING HAS NOT BEEN HEAVILY AFFECTED BY FEDERAL GOVERNMENT CUTS TO IT BUDGETS

55

208

51

220

392

504

9 24 15 24 33 49

0

100

200

300

400

500

600

2009 2010 2011 2012 2013 2014f

Dollars (MUSD) Deals

Rank Investor

1 Intel Capital

2 Google Ventures

3 Qualcomm Ventures

4 Juniper Networks

5 In-Q-Tel

6 NTT DoCoMo Ventures

6 Siemens Venture Capital

6 T-Venture

CORPORATE CS INVESTMENT AND DEAL VOLUME


INVESTMENTS HAVE INCREASED IN CS COMPANIES,

ESPECIALLY AMONG CORPORATE INVESTORS

SOURCE: CB INSIGHTS

A LARGE NUMBER OF CS INVESTMENT ACTIVITY OCCURS IN CALIFORNIA, A KEY REGION FOR CS SUPPLIERS

MOST ACTIVE U.S. INVESTORS IN CYBERSECURITY

Since 2010, corporate investors have invested more than 1.37 BUSD into CS companies across 140 deals and tend to

favor early to mid stage CS companies

U.S. HQ LOCATIONS OF TOP CYBERSECURITY* FIRMS

FIFTEEN OF THE TOP FIRMS ARE AMERICAN


MAJOR PLAYERS ARE PRIMARILY LARGE U.S.-BASED

ORGANIZATIONS CLUSTERED IN KEY REGIONS

SOURCES: HOOVER’S, VISION GAIN, , FBI INTERNET CRIME COMPLAINT CENTER

Origin Major Supplier in North America

U.S. Raytheon, Symantec, Northrop Grumman, Booz

Allen Hamilton, Computer Sciences, Cisco

Systems, Dell, General Dynamics, IBM, HP,

Intel, L-3 Communications, Leidos, Lockheed

Martin, Palo Alto Networks

Japan Trend Micro

Russia Kaspersky Lab

France Thales Group

Italy Finmeccanica SpA

U.K BAE Systems

THE WORLD’S LARGEST CS PLAYERS TEND TO LOCATE IN SILICON VALLEY AND NEAR THE FEDERAL GOVERNMENT

*MARYLAND HERE INCLUDES WASHINGTON D.C.

State with >20,000 cyber attacks

State with 10,000-20,000 attacks

State with 5,000-10,000 attacks

State with < 5,000 attacks

“We can compete with large players as we are more

focused on our specialty. Our lost contracts are mainly

due to customer’s budget limitations rather than losing to

the CS giants.”

Sales Manager, Swedish CS Provider

CS TECH USED BY U.S. COMPANIES

PERCENTAGE, 2014

0

10

20

30

40

50

60

70

CYBERSECURITY INDUSTRY TRENDS

Companies tend to rely heavily on perimeter controls

(PC) and firewalls because they have been the

traditional defense against hacking attempts

Cyberattacks are evolving quickly, making firewalls

and perimeter controls ineffective and forcing

companies to look for alternatives

In 2013, encryption accounted for 17% of companies’

CS budget. In 2014, encryption spending was

expected to increase to 39% of the CS budget

Access governance tools are in demand as

companies search for ways to secure millions of devices

in their network

CS solutions that offer a wide array of services and can

be easily integrated into existing networks are being

adopted quickly

CIOs and CISOs are often the key decision makers on

these solutions


PC/FIREWALLS IS THE MOST COMMON CS MEASURE,

BUT THERE IS HIGH GROWTH IN ENCRYPTION DEMAND

SOURCE: BUSINESS SWEDEN INTERVIEWS, PONEMON INSTITUTE; HEWLETT-PACKARD (HP ENTERPRISE SECURITY), PRAESCIENT ANALYTICS, THALES SECURITY, CHICAGO TRIBUNE, UNISYS, TECHNAVIO

AS CYBERATTACKS ARE BECOMING MORE ADVANCED, COMPANIES ARE LOOKING FOR A HOLISTIC APPROACH


THERE ARE NO GOVERNMENT REGULATIONS FOR CS

SOLUTIONS, BUT CLIENTS LOOK FOR CERTIFICATIONS

SOURCE: NATIONAL INITIATIVE FOR CYBERSECURITY CAREERS AND STUDIES, NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

CS SUPPLIERS CAN DIFFERENTIATE THEMSELVES IN THE MARKET VIA VOLUNTARY CERTIFICATIONS

“The cybersecurity industry is not regulated, but there are

traditions and customs that companies tend to follow.”

Paul Hoffman, President

Cybersecurity Association

CERT

Certified Wireless Network Professional

Cisco

CompTIA

DRI International

EC-Council

Global Information Assurance Certification (GIAC)

Information Assurance Certification Review Board

International Information

Systems Security Certification Consortium, Inc. (ISC²)

Infotec Pro

ISACA

Learning Tree

McAfee Institute

Mile2

Security University

Organizations offering voluntary

certifications

The U.S. government does not have regulations on CS

products, instead they have regulations on companies

and industries to maintain a certain level of

cybersecurity

The National Institute of Standards and Technology

has some voluntary framework for critical

infrastructure’s CS that may become required in the

future

Many government agencies require high levels of

security clearance which can be very difficult for

foreign employees to obtain

Federal and state government

U.S. LOCATIONS FOR A SAMPLE OF LEADING EUROPEAN CS PLAYERS


MANY EUROPEAN CS LEADERS HAVE COMMITTED TO

THE U.S. MARKET WITH LOCAL SUBSIDIARIES

SOURCE: HOOVER’S, CYBERSECURITY VENTURES, COMPANY WEBSITES, BUSINESS SWEDEN INTERVIEWS

European CS leaders are

increasingly establishing local

sales offices. In some cases, local

development and support are

necessary

Partnerships with local resellers

and implementation companies

are another common strategy

European companies have a

strong presence in a recent list of

the top 500 hottest CS companies

European local presence

AVG Technologies

Codenomicon

Cryptomathic

Secunia

“The U.S. is absolutely a priority market

for us. We are currently prioritizing

certain solutions there through a variety

of partners as an entry strategy.” CEO, Swedish CS Provider

EUROPEAN MARKET LEADERS TEND TO FOCUS THEIR LOCAL OPERATIONS ON SALES AND SUPPORT

Axiomatics

Brainloop

BWise

Napatech

BT

The U.S. CS market leads the world in overall

spending and strong growth will continue. Public

and Private agencies are implementing CS

standards to benefit consumers

Investment has increased in CS companies,

especially among corporate investors

Major players are primarily large U.S.-based

organizations clustered in key regions

PC/Firewalls is the most common CS measure,

but there is high growth in encryption demand

There are no government regulations for CS

solutions, but clients look for certifications

Many European CS leaders have committed to the

U.S. market with local subsidiaries

KEY FINDINGS CONCLUSIONS


THE GROWING US MARKET IS THE WORLD’S LARGEST &

EUROPEAN COMPANIES ARE SEIZING OPPORTUNITIES

U.S. companies recognize the importance of CS and

have increased their CS IT budgets. Regulatory

compliance has been a major factor driving corporate

spending on CS in the U.S.

A large number of CS investment activity occurs in

California, a key region for CS suppliers

The world’s largest CS players have a strong local

market presence in this key market

As Cyberattacks are becoming more advanced,

companies are looking for a holistic approach

CS suppliers can differentiate themselves in the

market via voluntary certifications

European market leaders tend to focus their local

operations on sales and support


BUSINESS SWEDEN CAN SUPPORT ESTABLISHMENT

AND GROWTH ON THE U.S. MARKET

Evaluate if the U.S. is

the right market for

your business

Analyze top market of

interest

Initial U.S. market

analysis

U.S. Market Entry Prepare U.S.

Entry Strategy

Establish Local

Presence

Develop U.S.

Business

How to enter the U.S.

e.g. evaluation of

potential entry routes

Evaluate the U.S.

market potential

Build network through a

meeting program

Establish a presence

swiftly and cost

effectively

Evaluate corp. structure

and create legal entity

Set up business support

and functions

Examine opportunities

to develop and grow

your U.S. business

Analyze the U.S. growth

scenarios

Business Sweden can assist your business with a variety of services

OUR OFFICES IN CHICAGO, NEW YORK AND SAN FRANCISCO CAN PROVIDE RECOMMENDATIONS ON HOW TO START

Business Sweden support can include evaluating the market potential, finding business partners, expert advisors,

coming into contact with policy makers or recruiting your country manager, as well as supporting the establishment of

your local presence

CHICAGO

Business Sweden

150 North Michigan Ave, Suite 1950

Chicago, IL 60601-7550, USA

T +1 312 781 6222

[email protected]

www.business-sweden.se/usa

CONTACT US

BUSINESS SWEDEN IN USA

NEW YORK

Business Sweden

The News Building, 220

E 42nd Street, Suite 409A

New York, NY 10017, USA

T +1 212 507 9001

[email protected]


SAN FRANCISCO

Business Sweden

100 Montgomery Street, Suite 1780

San Francisco, CA 94104, USA

T +1 415 835 3000

[email protected]


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the u.s. cybersecurity market - business sweden€¦ · target, sony and anthem have cost ......

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