The global defense cybersecurity market size was valued at USD 18 billion in 2021. It is estimated to reach USD 40.5 billion by 2030, growing at a CAGR of 10.7% during the forecast period (2022–2030). Cyber threats attempt to compromise sensitive information using numerous techniques, such as spyware, malware, and phishing, all located online. All nations’ defense networks are altered due to IT and communication advancements. However, as technology advances quickly, so do the hazards accompanying it. Defense organizations may monitor, detect, report, and handle cyber threats using cybersecurity technologies, preserving data confidentiality.
Over the past ten years, the defense industry has seen a rapid transition. The use of dependable and improved cybersecurity solutions for the defense industry has become necessary due to the growing developments in information technology, the upgrading of current weapons with intelligence and surveillance capabilities, and the rising volume of classified data gathered from various systems. Furthermore, increased investment in services programs for research and development of cybersecurity solutions for the battle-ground communication systems is expected to fuel the market studied during the forecast period.
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Severity of Cyber Attacks on Military/Government Organizations
Over the past ten years, there has been an exponential rise in attacks on businesses, governments, and people. Defense-related infrastructure quickly becomes a favorite target for state-sponsored cyber attackers and private persons. Consequently, these corporations recognize the need to undermine previously thought impenetrable security systems. The aerospace industry's machine-to-machine (M2M) technology market has grown due to increasing M2M adoption and government emphasis on boosting cyber security to combat cyber terrorism.
Systems for navigation and direction are considered particularly vulnerable to cyber-attacks, which may have far-reaching effects. Therefore, all ground and airborne operations require reliable security infrastructure for their computers and networks. Furthermore, following the recent conflict in the Galway valley in the northern Himalayan area of Ladakh, nations like India are prepared for the possibility of cyberwarfare from China. These threats demonstrate the growing seriousness of the problem and may increase the demand for cybersecurity measures in the defense industry.
Government Initiatives to Secure Critical Data
To counter the cyber-attacks, governments are taking action or formulating initiatives to protect their assets. The defense industrial base considered the scope of the threat landscape and implemented tactics, procedures, and tools, in collaboration with peers and governments to prevent breaches. India and other nations have begun investing in cyber security systems to safeguard critical data. Additionally, the government's ambitions to use new technical intelligence have been motivated by the escalating tension between the United States and Iran. For instance, the American military has carried out a cyber strike on Iranian weaponry and taken control of the Iranian Islamic Revolutionary Guard Corps' computer systems for launching rockets and missiles.
As a result of these incidences, Iran has quickly improved its cybersecurity and cyber capabilities to ward off similar attacks. Three military organizations play significant roles in cyber operations: the Iranian Revolutionary Guard Corps (IRGC), the Basij, and Iran's "Passive defense Organization (NPDO)." Hence, adopting cybersecurity solutions could witness growth to secure critical data. Accordingly, the increasing initiatives by the government and related regulatory bodies to protect the critical defense infrastructures are expected to boost the market growth during the forecast period.
Low Funding and Lack of Effective ROI Metrics
While factors such as increasing government initiatives to secure critical data and the severity of cyberattacks on military and government organizations fuel market growth, factors such as low defense funding priorities in some countries combined with ROI metrics are anticipated to pose a threat to that growth. For instance, South Africa's government budget planning and execution for investments in the military are relatively subpar. The Department of Statistics (StatsSA) has clustered the defense budget along with housing, environmental protection, recreation, and culture in one of three 10% groupings. These four sectors were allocated a total of ZAR 172 billion, of which the defense budget accounted for only 3% (ZAR 47 billion). The housing sector was prioritized in the grouping, with an investment of ZAR 71 billion (4% of the group total).
Even in emerging markets like India, where increasing the defense budget has been a principal focus over the years, there is not enough money set aside to update the military's infrastructure. Furthermore, cybersecurity measures adopted by a defense organization mandate the ability to defend against multiple cyber threats. With the adoption of cloud applications, IoT, etc., for defense applications, the attack surface has grown proportionally to the sophistication of cybercriminals. In such regard, defense organizations are finding it increasingly challenging to decide on the investment and the choice of deploying a cybersecurity solution. This is because ROI's impact can be seen only when the attack occurs. The absence of ROI metrics further adds to that, as it's complicated to measure success because the main goal is to avoid a breach. As a result, the factors mentioned above hamper the market growth.
Transition of Conventional Military Aircraft into Autonomous Aircraft
Military aircraft manufacturers' attention has shifted from developing conventional aircraft to encouraging the use of autonomous aircraft due to changes in military conflict tactics. Unmanned combat aerial vehicles (UCAVs) with autonomous sophisticated fighter planes like the Kratos XQ-58 Valkyrie and UTAP-22 Mako jet considerably increase situational awareness and missile carrying capability, which aids in carrying out crucial battlefield missions during warfare operations. To handle challenging wartime scenarios, these autonomous aircraft uses AI technology for air-to-air communication.
Adopting artificial intelligence (AI) and the Internet of things (IoT) in aircraft makes it easier to carry out missions by supporting pilots with crucial military decision-making, real-time navigation and surveillance, and selecting the best path. The incorporation of cutting-edge technology reduces the likelihood of mission failure. Additionally, next-generation airplanes are furnished with cutting-edge integrated electronics, software, and electronics based on advanced technology. Military aircraft are increasingly using IoT and AI, which could create dependable and improved defense cyber security solutions.
The global defense cybersecurity market is segmented by solution and region.
Solution-wise, the global defense cybersecurity market is segmented into Threat Assessment, Network Fortification, and Training Services.
Network Fortification accounts for the largest market share and is estimated to grow at a CAGR of 10.1% over the forecast period. Militaries often require high levels of segregation for networks and operational and mission continuity, driving the need for cybersecurity network fortification solutions that include products and services such as network security (IDS/Firewall), secured network engineering, layered defense, identity, and access management. With the growth in security risks in the defense sector in recent years, identity and access management have become a more critical tool to allow people to access the correct information at the right time. Other factors driving the need for identity and access management are the shifting defense sector applications in the cloud, allowing more applications to run on mobile devices. It adds to a different online environment, increasing the need for cybersecurity network fortification.
Threat Assessment accounts for the second-largest market share. As cybersecurity concerns continue to increase, there is a greater need for all military branches to utilize threat assessment solutions and analytics to maintain a strong security posture. Threat assessment and analytics use data collection and analysis tools, including automation for security monitoring, threat intelligence, and forensics. Multiple governments and military organizations utilize data recovery products, forgery mitigation, and vulnerability management solutions. The defense sector is faced with identifying and responding to hundreds or even thousands of potential threat events every hour. This factor will not only stretch the human and financial resources already committed to this effort, but mistakes may also create an opening for malware and malicious actors to gain a foothold. These challenges increase the need for security automation so that the defense agencies can be proactive in cyber-defense.
Defense Solutions are the third largest segment. Military and civilian agencies are among the prime target of cybercriminals. With several devices, connected assets, and applications that continue to multiply, cybersecurity threats are expected to accelerate at an unforgiving pace, increasing the need for cyber asset defenses such as boundary defense and application security. Moreover, militaries often require information security and cyber hardening for weapons and critical systems following DFARS and NIST compliance rules, thereby driving the need for cyber asset defenses. Several different defenses should be used to fill in the gaps in the form of additional protective capabilities. Any single defense solution may be flawed, and the surest way to find the flaws is to be compromised by an attack. Network security can be maintained via firewalls, intrusion detection systems, malware scanners, integrity auditing processes, and local storage encryption technologies. This layered approach to cybersecurity is being implemented in the defense sector, providing robust security strategies.
North American Supremacy Across the World
By region, the global defense cybersecurity market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World.
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North America accounts for the largest market share and is estimated to grow at a CAGR of 10.3% over the forecast period. The United States is a big industrialized economy that depends heavily on the Internet, making it particularly vulnerable to cyberattacks. The nation also possesses significant defense capabilities due to cutting-edge technology and a vast military budget. The United States continues to be constantly threatened by malicious hacking from local and foreign adversaries. The nation has created considerable cyber capabilities for the defense industry in response to these evolving threats. A Supply Chain Cybersecurity Industry Task Force was recently established to identify, prioritize, monitor, and promote the adoption of workable solutions to protect controlled, unclassified information throughout the entire supply chain, according to a recent announcement from the US defense industrial base sector coordination council. This is expected to drive the adoption of cybersecurity solutions.
Asia-Pacific is estimated to generate USD 9 billion by 2030, growing at a CAGR of 11.5%. Cybersecurity and warfare have undergone significant transformations in the digital age, and Asian nations are at the forefront of the technological advancements causing these changes. For instance, China is making substantial investments in technologies like artificial intelligence (AI) and 5G and selling many of its technical goods locally and internationally while restricting the use of cyberspace by other nations and businesses within its boundaries. According to SIPRI, China's military spending amounted to an estimated USD 261 billion. China's Military Strategy describes the primary objectives of cyber capabilities to include cyberspace situation awareness, cyber defense, support for the country's endeavors in cyberspace, and participation in international cyber cooperation. The government's increasing initiatives and the related regulatory bodies to strengthen security are expected to fuel the adoption of cybersecurity solutions and tools over the forecast period.