Cybersecurity is a hot-button issue right now and for good reason. 2020 was full of high-profile attacks, from cryptocurrency exchanges losing hundreds of millions to compromised public infrastructure and healthcare providers avoiding potential disasters. Naturally, the cybersecurity providers and their share prices stand to benefit in our less digitally secure world. Below are the cybersecurity trends affecting the market in 2021.
Work From Home
The work from home revolution has upended the way we work and has generally been a mixed blessing for employers and employees. It has also meant a bonanza for cybercriminals who are well aware of the glaring lack of knowledge and understanding the average worker (and even company) has with respect to cybersecurity vulnerabilities and threats.
Organizations now have people working from home and using what are often unsecured or poorly protected networks to access sensitive company financial and proprietary data. These same employees are also usually quite ignorant of the latest phishing and scamming tactics that criminals use to gain unauthorized access. Because of this, some 70 percent of all large companies will increase their cybersecurity spending post-pandemic.
Internet of Things
Another trend correlating positively with the cybersecurity market right now is the growth of what is commonly referred to as the internet of things. The IoT refers to the various internet integrated hardware and software humanity increasingly adopts to make life easier, more comfortable and more efficient. These devices are found around our home, in our vehicles, on our wrists and around our necks, and throughout public life. They include our phones, our apps, our smart devices, and the growth of smart cities.
Each new point of contact with the internet represents a potential entry point for cybercriminals. There are constant stories about home and wearable devices being hacked and data breaches on the servers where the information generated by all of these points of contact is housed. Consumers and citizens are rightly concerned and the companies manufacturing the devices and selling these services are having to up their cybersecurity game to appease nervous customers.
The third trend with positive implications for the cybersecurity market and providers is the increase in ransomware attacks year over year for the last several. These attacks represent not only commercial threats but, as our public infrastructure becomes internet dependent, society as a whole.
It is entirely conceivable to imagine power grids and water supplies being held hostage until millions, or even billions of dollars are forked over to amorphous, internationally-based and difficult to track criminal networks. The need to do something about the growing threat of ransomware at both the public and private level is prompting major investments into cybersecurity infrastructure and the professionals to maintain and monitor it.
For all of these reasons, many people are predicting that 2021 will be the year of the cybersecurity stocks. Investors searching for real value among what is widely considered an overvalued equities market propped up by crisis monetary policy would do well to pay close attention to the cybersecurity industry over the coming months and consider the real and growing needs it serves.