Ares

A Defense Technology Blog
See All Posts
  • Cyberwar Means Big Bucks
    Posted by Paul McLeary 3:45 PM on Dec 08, 2011

    blog post photo

    Global spending on cybersecurity programs amounted to about $60 billion in 2011, and is expected to grow about 10 percent every year over the next three to five years, according to a new analysis published by PricewaterhouseCoopers.

    The report, “PwC Cyber Security M&A: decoding deals in the global cyber security industry” identifies the United States as the largest market, accounting for over half of total spending, followed by Japan, then the U.K. (Read DTI contributor Angus Batey on what the U.K. government is doing, cyber-wise.) Several key trends will drive this growth, including the proliferation of mobile wireless devices, the need to protect cloud computing for personal, corporate and government use, and the rise of decentralized “hacktivist” groups like Anonymous who seek to disrupt corporate and government databases and exploit hacked information.

    The study reports that while total deal activity in the industry amounted to about $22 billion globally since 2008, during the first half of 2011 alone, “there were 37 deals accounting for over $10 billion in deal value and representing a 70% increase compared to full year 2010.” That number is padded—to say the least—by Intel’s $7.8 billion acquisition of McAfee in February 2011. Nevertheless, the report says that “deal value, deal volume and average deal size have all been trending up” since 2009.

    A few of the biggest industry players involved in snapping up smaller companies doing cybersecurity work include BAE Systems, which acquired Detica plc in 2008 for $1 billion, followed by its acquisition of L-1 Identity Solutions for $297 million; and Raytheon, who spent $211 million on Oakley Networks in 2007 and opened up its wallet to the tune of $350 million in 2007 for the purchase of BBN technologies. The company followed that in 2009 with the $490 million purchase of Applied Signal Technologies. And then there’s the much smaller Mantech, which “has made a number of sub-$100 million acquisitions and QinetiQ has been active, completing a number of acquisitions including the $40 million acquisition of Cyveillance in 2009,” writes PwC.

    Barry Jaber, PwC’s Security Industry Leader, writes that “the market is undergoing significant change in many segments and is attracting investment from many different types of companies including IT companies, defence contractors, technology businesses, professional services firms, telecommunications firms and financial investors,” a diversity of inputs that he does not see changing any time soon.

    Tags: cyber, bae, raytheon, ar99, wellington

Share:
  • Recommend
  • Report Abuse

Comments on Blog Post