UTMCAP TMT - Sector Research - IT Security Consulting
Stats / Market Overview:
Currently growing, has been growing for the past years.
billion in revenue for
CAGR:
CAGR:
Moderate Volatility
Reasons for growth:
E-comm
Cloud compute
Mobile technology
High-profile cyberattacks which warrant looking into tightening up security.
Growth Potential:
Cyber Threats:
There's always slip ups in security and thus chances to take advantage of it for money, data, politics.
From the firms point of view, they may have sensitive data to to keep hold of like:
Credit info, payment info.
Identity info, drivers licenses, passports.
Medical info, hipaa
New tech business models:
Software is now never buy once, own the software and get updates.
Software is now a service, saas.
This means that cloud computing is needed to run these services, you need databases to hold data as well as high availability and if it's international then you need multiple data centres and a cdn to manage this data and provide it to clients.
However this centralizes attacks directly to these data centres.
Linked to other markets:
Financial services
of the market
Payment processing
Banks
Insurance
Example: More and more goes online, bank statement via mail are increasingly uncommon.
Healthcare sectors
of the market
Fraud detection software lowers risk of improper payment.
Because these other sectors need these services, their growth will mean more demand for this sector.
In the US, centralization:
Note that this kind of business doesn't need to be in person, however it's mainly centralized to: California, Texas, Virginia, Florida and New York.
Handbrakes to growth:
Moving IT in-house:
Large firms are creating in-house cybersecurity departments.
Reduces reliance on consultants or other firms for IT.
High competition, low barrier to entry:
High competition. Very competitive. The biggest names have a lot of clients, however it's very cheap to just take your own skills and do this sort of thing almost freelance (to a degree).
It's easy for a firm to get some capital and enter this market. This can reduce profit margins.
No legal barriers, only need to adhere to basic copyright and electronics laws.
Startup costs, majority of the costs are procuring space and computers from which to work.
Differentiation, mainly dependent on previous experience, education background.
Maturing:
Because there was such a big boom in covid for anything online, there was huge demand for companies who've never thought of moving to saas or to at least have some online interface to their company to do so now.
Profit margin on the industry is from 2019-2024.
This can limit ability to re-invest and expand.
Structure of Market:
Centralization:
Players:
Products:
Geographically:
Products:
SWOT:
Strengths
Weaknesses
Opportunities
Threats
Exec Summary:
Stats / Market Overview:
Currently growing, has been growing for the past years.
billion in revenue for .
CAGR:
CAGR:
Moderate Volatility
Reasons for growth:
E-comm
Cloud compute
Mobile technology
High-profile cyberattacks which warrant looking into tightening up security.
Growth Potential:
Cyber Threats:
There's always slip ups in security and thus chances to take advantage of it for money, data, politics.
From the firms point of view, they may have sensitive data to to keep hold of like:
Credit info, payment info.
Identity info, drivers licenses, passports.
Medical info, hipaa
New tech business models:
Software is now never buy once, own the software and get updates.
Software is now a service, saas.
This means that cloud computing is needed to run these services, you need databases to hold data as well as high availability and if it's international then you need multiple data centres and a cdn to manage this data and provide it to clients.
However this centralizes attacks directly to these data centres.
Linked to other markets:
Financial services
of the market
Payment processing
Banks
Insurance
Example: More and more goes online, bank statement via mail are increasingly uncommon.
Healthcare sectors
of the market
Fraud detection software lowers risk of improper payment.
Because these other sectors need these services, their growth will mean more demand for this sector.
In the US, centralization:
Note that this kind of business doesn't need to be in person, however it's mainly centralized to: California, Texas, Virginia, Florida and New York.
Handbrakes to growth:
Moving IT in-house:
Large firms are creating in-house cybersecurity departments.
Reduces reliance on consultants or other firms for IT.
High competition, low barrier to entry:
High competition. Very competitive. The biggest names have a lot of clients, however it's very cheap to just take your own skills and do this sort of thing almost freelance (to a degree).
It's easy for a firm to get some capital and enter this market. This can reduce profit margins.
No legal barriers, only need to adhere to basic copyright and electronics laws.
Startup costs, majority of the costs are procuring space and computers from which to work.
Differentiation, mainly dependent on previous experience, education background.
Maturing:
Because there was such a big boom in covid for anything online, there was huge demand for companies who've never thought of moving to saas or to at least have some online interface to their company to do so now.
Profit margin on the industry is from 2019-2024.
This can limit ability to re-invest and expand.
Structure of Market:
Players:
The market is fragmented with a couple of large companies, however not majority.
Major players include Accenture, IBM and HP.
Consolidation is occurring through mergers and acquisitions, but new companies enter easily due to low entry barriers.
Products:
Security systems design and integration ()
Existing security systems management ()
Custom security software development ()
Other services like risk assessment and training ()
Geographically:
The Southeast region of the US is a major hub, with proximity to data centers and government clients.
The West region is also a key area for IT security consulting firms. Due to Silicon Valley.
SWOT:
Strengths
Growth life cycle
Low capital required
Low concentration of products / services
Weaknesses
Low barriers to entry
Low level of assistance
High competition
Profits are lower than the sector
Opportunities
High revenue growth over with growth expected further till at least
Corporate profit
Threats
Low outlier growth
Low performance drivers
Government consumption and investments
Exec Summary:
The IT Security Consulting industry in the US is valued at billion in and is in a growth phase, driven by digitalization, cloud adoption, and high-profile cyberattacks. While growth is projected to slow from a CAGR () to (), the demand remains strong.
Key markets include financial services and healthcare. The industry is fragmented and competitive, with major players like Accenture, IBM and HP leading.
Future opportunities lie in emerging tech like AI, though a talent shortage and the potential for clients to move security in-house pose significant challenges.