Five Must-Watch Cybersecurity Industry Sectors with Staying Power

By Bob Eckel, CEO, Aware

Due in large part to the ever-increasing awareness of data threats and the risks associated with them, the international cybersecurity market has witnessed an industry boom. In fact, as of 2022, there is a $2 trillion market opportunity for cybersecurity technology and service providers, and that growth shows no signs of slowing down.

For many investors, this comes with both pros and cons. On the one hand, such a rapidly growing, diverse industry will have its ebbs and flows as threats evolve and certain technologies and sectors become obsolete. On the other hand, as cybersecurity risks become more complex and more prevalent, investing in those sectors of the industry with strong staying power can pay big dividends.

Here are five of the most exciting, fastest-growing segments of the cybersecurity industry that I believe investors should watch closely in the months and years to come:

1. Data Protection and Security

Governments worldwide are accelerating their efforts to protect their citizens’ private information, making data protection and security a hot sector. In the United States, five states are rolling out new and comprehensive data privacy laws this year, modeled after the European Union’s ubiquitous General Data Protection Regulation (GDPR), first enacted in 2018.

One of the guiding principles of GDPR is “data protection by design,” which refers to the intentional implementation of information protection measures. This principle applies to all types of data, including biometric information. As biometrics are increasingly used as a form of authentication, the cybersecurity industry is continually developing ingenious new techniques that make it virtually impossible for a hacker to access highly sensitive biometric data.

2. Zero Trust

Remote and hybrid work models are here to stay, and as a result of this fundamental shift in the workplace landscape, new cybersecurity measures have also emerged. Zero Trust is a framework based on the principle of “never trust, always verify” and is one of the leading approaches companies use to bolster their data security.

The biggest difference between Zero Trust and single sign-on approaches is that Zero Trust relies on continuous authentication instead of a single-login method. Rather than logging in once and gaining access to everything, users are continuously verified (and essentially re-verified or authorized) as they access different systems and networks.

In fact, forty-three percent of 1,300 network security professionals place “identity and access management” as key to implementing a strong Zero Trust framework in their organization. Zero Trust, therefore, opens up huge opportunities for technologies enabling continuous validation, including biometrics.

3. Cloud Security

Cloud security is a subset of cybersecurity dedicated to securing cloud computing systems and is used to find and fix vulnerabilities hiding in public clouds. The accelerated shift to cloud computing has boosted the adoption of security software across most organizations as they seek to identify the areas where hackers can wage attacks.

This technology remains in high demand because cloud security incidents are still commonplace. In fact, over 80 percent of companies have had a cloud security incident within the past year. Barely a month goes by without news of a large company announcing a major cloud security breach. Not surprisingly, cloud security vendors are achieving rapid increases in their valuations despite the current economic downturn – a clear sign that demand for cloud security is significant.

4. Software Supply Chain Security

We all are aware that the COVID-19 pandemic unleashed massive disruptions on the global supply chain - from product and labor shortages to extreme weather. However, today, software supply chain attacks are emerging as a new villain impacting the global movement of goods.

A software supply chain attack targets developers with trusted vendors, and hackers tirelessly hunt for unsecure network protocols, unprotected server infrastructures, and unsafe coding practices in order to change source codes, hide malware in software, and generally upend processes. Ironically, the software vendors themselves are likely unaware that their apps or updates are infected with malicious code when they're released to the public. Hackers especially benefit from this kind of attack because it impacts a large number of potential victims – with relatively little work involved.

Software supply chain attacks increased by over 600 percent in 2022 from 2021. In addition, the number of supply chain attacks in the first two months of 2023 is already 40% of last year’s total. Given the hyper-growth of this space, this sector warrants a close eye.

5. Physical Access Control Systems

Physical access control is, as its name suggests, the process of securing who and what can enter a facility. Access control systems can help keep unauthorized people out of sensitive areas, and are also vulnerable to cyber threats.

While physical access control systems as a concept is nothing new, organizations are continually looking for systems that offer advanced features. Modern access control systems no longer rely on badges and passwords (or anything that can be lost or stolen), but instead are using advanced forms of authentication such as biometrics. In addition, many companies have physical access control systems running in the cloud, and I expect to see additional migration from on-premise to cloud-based access control systems.

In conclusion, while there’s no predicting exactly what the future of cybersecurity holds, it’s safe to say that the sector’s growth will continue to be extraordinary. These five emerging cybersecurity sectors will be exciting spaces to watch in the coming years, particularly for those looking to build out and diversify their cybersecurity portfolios.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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