Why was the report written?

This report is the result of an extensive survey drawn from ICD Research and Strategic Defence Intelligence’s exclusive panel of 206leading global defense industry executives. The report provides data and analysis on global defense industry buyers’ and suppliers’ spend on cyber warfare products and services, countermeasure strategies, and practices and business planning within the global defense industry to combat cyber threats.This report includes key topics such as sources of cyber-attacks, key countries where cyber-attacksoriginate, major cyber warfare programs, potential regions for growth in demand of cyber security products and services, cyber security implementation challenges and key cyber security solution providers. Most secondary research reports are based on general industry drivers and do not understand the industry executives’ attitude and changing behaviours, creating a gap in presenting the business outlook of the defense cyber security industry. In an effort to bridge this gap, ICD Research and Strategic Defence Intelligence created this primary-research based report by gathering the opinions of multiple stake holders in the value-chain of the global defense industry.

What is the current market landscape and what is changing?

Of respondents from both buyer and supplier organizations across the global defense industry, more than 80% view cyber warfare as a key segment to witness growth.

What are the key drivers behind recent market changes?

The expected growth in the global defense cyber warfare market is mainly due to increase in the incidences of cyber-attacks, a rise in awareness levels, and enhanced government spending, despite a decrease in defense budgets.

What makes this report unique and essential to read?

This report analyzes how defense companies perceive cyber warfare, and how key countermeasure techniques, growth regions, cyber security budgetary allocation and business planning are set to change in 2012-2013.This report provides the current size of the cyber security budgets of global defense industry buyers and suppliers and how spending will changein 2012-2013. In addition, the report also identifies future growth in the cyber security market and potential regions that are expected to register growth. The report also provides access to information categorized by region, company type and sizes.

Key Features and Benefits

  • To project industry trends and revenue growth expectations in 2012 and understand business confidence to make informed business decisions.
  • Drive revenues by understanding future product investment areas and key growth regions.
  • Uncover key challenges and opportunities and identify key actions required to maintain and win buyer business.
  • Formulate effective sales and marketing strategies by identifying how the cyber security budgets ofcompanies are changing and the direction of spend in the future. Better promote your business by aligning your capabilities and business practices with your customer’s changing needs.
  • Secure stronger customer relationships by understanding the exact need in terms of products and services of industry buyers and suppliers.

Key Market Issues

  • Throughout the global defense industry, an average of 43% of respondents from defense buyer companies and 47% from supplier companies expect cyber warfare to be the key segment to register growth in 2012. A further 48% of respondents from buyers and 39% from supplier companies consider cyber warfare to be a key segment for growth in 2012 along with few other important areas.
  • Survey results show 77% of respondents, from both buyer and supplier segments, consider cyber warfare a real threat to act upon due to its ability to exploit the information systems and cause more harm than conventional weapons. Conversely, an average 19% of respondents consider that cyber warfare is overhyped and is politicized considering a huge market opportunity for security related products and services.
  • Global defense industry respondents identify the US and China as the top spenders in cyber security products and services, followed by Russia and the UK.Additionally, defense suppliers also expect the US, the UK, Germany and China to be the top spenders in terms of cyber security products and services.
  • According to the survey, the average size of the global, annual cyber security budgets of respondents from defense organizations in 2012 is estimated at US$3.4 million. At the same time, the average size of global annual cyber security budgets among defense contractors is US$2.0 million, compared to US$0.4 million for other service providers.
  • Survey results reveal that defense organizations’ cyber security budgets are expected to rise by an average of 6% over the next 12 months, whereas respondents from defense contractor companies and other service providers, on average, expect to increase their total cyber security budget by 8.6% and 4.6% respectively over the next 12 months.

Key Highlights

  • Survey results show that 54% of respondents from defense buyer organizations expect the demand for 'anti-virus, anti-spyware and anti-adware’ to increase, while 54% and 50% of respondents expect an increase in demand for 'encryption technology’ and 'firewalls and intrusion detection software’ respectively. Similarly, defense suppliers also expect 'anti-virus, anti-spyware and anti-adware’ and 'firewalls and intrusion detection software’ to register the highest demand in the next 12 months.
  • 57% of respondents from defense organizations consider 'lack of awareness’ a key barrier in combating cyber attacks, followed by 'lack of understanding in transfer technology, skills and intelligence among agencies’ and 'diverse and continuously evolving threats’. Similarly, supplier respondents consider 'diverse and continuously evolving threats’, 'dynamic nature of cyber crime’ and 'lack of awareness’ the key barriers in combating cyber attacks.
  • 57% of respondents from defense organizations believe that cyber attacks on their organizations originate from 'foreign hackers’ followed by 'organized cyber crime groups’ and 'domestic hackers’ as identified by 43% and 28% respectively. Similar to buyers’ responses, defense suppliers also identify 'foreign hackers’ and 'organized cyber crime groups’ as major sources of cyber-attacks.
  • Survey results show that 83% of buyer respondents agree that cyber-attacks affect organizations in terms of 'security breach and data leak’.Additionally, 43% of respondents from defense organizations expect cyber-attacks to 'create confusion and miscommunication in the company’Similarly, 91% and 74% of respondents from defense contractor organizations agree that cyber attacks affect organizations in terms of 'security breach and data leak’.
  • On average, 58% of respondents from the defense industry take help from external security agencies to combat cyber threats. In particular, 39% of respondents from defense organizations take assistance from external consultants to counter cyber-attacks on a case-to-case basis, whereas 71% of respondents from defense contractors and 51% from other service provider companies expect to seek external help in confronting cyber-attacks.