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Preventative Equipment and Software

The potential devastation of cyber attacks has prompted the creation of a variety of protective hardware and software; however, network security equipment is the only product capable of stopping threats before they enter a network. These devices are installed between the network’s workspace entry point and the router that is used to spread network access across the workspace, acting as a barrier between the two. Fortunately for buyers, prevailing prices for this equipment are steadily falling. The overall cost of computing hardware has been in a state of long-term decline due to steadily improving manufacturing methods. According to IBISWorld, the falling cost of these inputs has been the primary driver behind the estimated 2.2% annualized price decline of network security equipment in recent years. A similar decline is also forecast for the next three years. While the falling price of security equipment helps buyers, the average device still costs around $4,000.

While network security equipment operates at the network level, security software is a must-have for all consumer and corporate users, as it protects against most existing security threats for individual computers and mobile devices in a way no other product or service can. This software identifies security risks, such as malware, adware and spyware, and takes steps to isolate and remove them from the user’s computer. Providers keep databases of known security risks, which their software uses to scan any new files entering the user’s computer. Despite the essential nature of security software, buyers hold significant leverage in the market because low market share concentration has led to strong price competition among vendors to secure business. IBISWorld estimates that the price of security software has been falling at an average of about 1.0% per year from 2013 to 2016, while the number of providers has been steadily increasing. Unfortunately for buyers, however, no viable substitutes exist, so they are forced to purchase this software to safely operate endpoint devices like desktop and laptop computers.

Another option for businesses in search of cyber protection is authentication software, which verifies the identity of a person trying to access protected data. Authentication takes many forms, requiring users to submit one or multiple factors before allowing access, including knowledge factors (like a password), ownership factors (like an ID card) and inherence factors (like a fingerprint). The best protection comes from requiring factors from at least two, if not all three, of these groups. Single-factor authentication significantly decreases the threat of unauthorized access by ransomware or other cyber attack methods. Like security software, authentication software lacks any true competition from other products and services, which significantly limits buyer leverage in negotiations. In addition, increasing demand for more robust forms of authentication has been driving up prevailing prices in recent years. Prices are expected to continue rising, with the average price clearing $4.00 per user per month in the next three years. As a result, buyers are encouraged to purchase now using long-term contracts to lock in lower rates for this necessary software.

Additional Services

IT consulting can play a key role in helping a company prevent and plan for possible cyber attacks. Apart from designing and implementing custom software, IT consultants help companies organize their communication infrastructure to optimize functionality and reduce security risks. Consultants also help companies learn and implement best practices to further limit cyber attack exposure and any resulting damage if exposed. Buyers hold significant leverage in the IT consulting market because of its high level of fragmentation. While the market contains some of the world’s biggest companies, such as IT conglomerates IBM and HP, as well as consulting giants like Deloitte and KPMG, over 400,000 companies provide IT consulting services in 2016, engendering significant price competition among vendors. However, the purchasing process can still prove challenging because service proposals can differ significantly across vendors, making them difficult to compare against one another. In addition, switching consultants can be a long and costly process. As a result, buyers should put extra resources into evaluating the services of potential IT consultants.

Data privacy consulting services is a subset of IT consulting services that specifically deals with designing secure network databases for businesses to maximize protection against unauthorized access from third parties. Service providers will likely recommend and implement preventative equipment and software to protect the buyer’s network. These specialized consultants are especially necessary for companies that operate in industries with highly regulated data standards, such as healthcare providers and financial institutions. Demand for data privacy consulting services has skyrocketed in recent years due to the plethora of high-profile security breaches. As a result, the average service price has been growing at an estimated annualized rate of 3.7% in the three years to 2016. This has created a market that favors vendors, which can expect steady demand despite regular price increases. Nonetheless, companies are encouraged to buy now because prices are expected to only rise further in the near future.

Data breaches can lead to losses that cost a company billions of dollars, and cybersecurity insurance can be the difference between such an event being an unfortunate hiccup in a company’s operations or a major financial disaster. Even with strong preventative measures in place, breaches are still possible. As a result, companies that maintain large databases of sensitive data, such as retailers or healthcare providers, are increasingly purchasing cybersecurity insurance. This insurance limits the buyer’s financial losses from cyber attacks. Prices for cybersecurity insurance are growing because, like with data privacy consulting services, demand is expanding rapidly as companies become more aware of the threat posed by cyber attacks. Currently, prices average about $22,000 per year per $1 million in coverage, and IBISWorld expects prices to grow at an annualized rate of 2.2% over the next three years.

A Dangerous but Lucrative Online World

The war against cyber attacks is a never-ending one for any company operating in today’s connected world. Luckily, buyers can defend against it by investing in protection equipment and software. Smart infrastructure and operating policy developed with an effective consultancy will also help raise security and limit exposure. Should the worst happen, cybersecurity insurance will help mitigate the costs of a cyber attack. A properly equipped company will be able to utilize the vast resources of the internet and information technology without fearing a catastrophic cyber attack.