Modern warfare presents numerous challenges, one of which is the rise in cyber-attacks. With the increased use of digital tools and the shift of businesses to an online environment, cyber weapons may become feasible tools capable of easily disrupting a nation’s power supply, electrical infrastructure, and food supplies without requiring military intervention. Russia’s full-fledged invasion of Ukraine early this year raised several such concerns. In addition to the global energy crisis and supply-chain disruptions, this conflict has put enormous strain on security alliances. This is not the first time Russia has used cyber-attack as a key war strategy. According to the Congressional Research Service, Russia employed Distributed Denial of Service (DDoS) attacks against Georgia during the 2008 war. A large-scale cyberattack coincided with Russian military activity, resulting in the National Bank of Georgia suspending all electronic operations for 12 days. The “NotPetya” cyberattack of 2017, which was linked to Russia, destroyed parts of the infrastructure in Ukraine and brought down thousands of systems across several countries, including those in the Netherlands, Spain, and Los Angeles. The NotPetya attack is reported to have caused $10 billion in losses overall, with A.P. Moeller-Maersk, one of the biggest shipping companies in the world, suffering losses of almost $300 million.
This year, the Ukrainian government and bank websites were allegedly disrupted by a cyber-attack a week before Russia invaded Ukraine. In the 48 hours following the invasion, suspected Russian-sourced cyber-attacks escalated by over 800%.
As cyberwarfare has evolved into a powerful weapon in the current global military’s arsenal, security agencies have issued a warning to businesses of all sizes to take precautions to protect their IT infrastructures. Companies are on the front lines of this global fight to protect themselves and the nation because of the rising threat of cyberattacks, which have long been a persistent threat to the globalized world. Given this, the cyber-security sector has received much attention so far in 2022, and analysts anticipate higher spending on security-related services as businesses prepare to construct cyber defenses. According to ReportLinker, the Global Cyber Security Services Market will be worth $178 billion by 2027, registering a compounded annual growth rate (CAGR) of 9.8% from this year.
Even if the Ukraine conflict ends, the importance of cyber-security will continue to grow. The move to hybrid and remote work solutions will fuel the expansion of this sector. With an increase in digitalization, cybercrime is also growing, making cyber-security deployment more difficult. As a result, the cybersecurity sector is also advancing to protect sensitive information, networks, and programs from digital threats. The market also benefits from increased demand for intelligent security software solutions, data protection, and cost-effective data management services.
Palo Alto Networks (PANW), the largest independent cybersecurity company in terms of total annual sales, and CrowdStrike (CRWD), the market leader for next-generation endpoint security software, are two of the most well-known cybersecurity companies to look out for in this industry moves forward at a rapid pace.
Other emerging players are at the forefront of this booming industry, such as Zscaler (ZS) and Hub Cyber Security Israel Ltd. (TASE: HUB). Zscaler (ZS) is a market leader in zero-trust security, providing a platform that assists business customers in protecting their personnel, apps, and data when infrastructure and applications migrate to the cloud and employees, connect to sensitive files remotely.
On the other hand, Hub Security offers end-to-end data security at all stages of the data lifecycle and next-generation encryption technologies such as quantum computing defense. The company has recently expanded its market footprint. It is also in the process of merging with SPAC Mount Rainier Acquisition Corp. (RNER) to list in the United States this year at a valuation of $1.28bn, a substantial premium valuation.
In conclusion, Cybersecurity is more crucial than ever, particularly for critical infrastructure providers, and its importance is expanding as geopolitical conflict escalates. As a result, numerous cyber-security companies are upgrading the solutions and services they offer to secure all devices, networks, and resources. Both demand and supply tailwinds make the cybersecurity sector an interesting industry to keep an eye on.
