Higher Threats Equal Higher Cybersecurity Spending: Canalys

The worldwide cybersecurity technology market grew 11.6% year over year to $19 billion, despite ongoing macroeconomic uncertainty and constrained IT budgets, according to a report from Canalys. In Q2 2023, total cybersecurity technology spending through the channel accounted for 91.5%, up from 90.5% in the same quarter a year ago.  

Investment in cyberresilience remained a top priority for organizations in Q2 2023 as threat levels continued to rise.

Twelve vendors accounted for nearly half of this spending. Palo Alto Networks led the market and grew 25.4%, fueled by demand for SASE, SecOps and cloud security. Fortinet ranked second, having capitalized on further gains in network security. But its growth of 19% in Q2 represented a slowdown from 26.2% in Q1, according to the report. Cisco accounted for 6.1% of total spending, down from 6.7% last year, despite new platform launches and more acquisitions, including its intent to purchase Splunk for $28 billion. CrowdStrike, Check Point, Okta and Microsoft rounded out the top seven, the Canalys report revealed.

While Okta made the top 12 in this report, its recent security breach may affect its standing going forward, as its stock fell after its latest breach was announced.

“Threat levels are at unprecedented heights, with the number of publicly reported ransomware attacks up by more than 50% and breached data records more than doubling in the first eight months of this year. At current rates, 2023 will be the worst year on record, far exceeding 2021 levels, when ransomware came to the forefront after a series of high-profile events,” said Matthew Ball, Chief Analyst at Canalys, in a statement about the report.  

"Worst Year on Record" is Best News for Channel

Customers need channel partners with cybersecurity expertise more than ever to help build cyber-resilience, Canalys said. The dangerous cybersecurity situation increases the need for partners to build services and solutions to defend against threats and expand capabilities in areas such as red teaming and MDR, according to the report. It's also important for vendors to improve collaboration with each other, especially around integration and sharing data.

“Discovering vulnerabilities and establishing asset inventories, as well as categorizing them based on the level of risk, is critical to prioritize investment in protection. This is also an important foundation for partners in creating remediation plans for customers when attacks take place,” added Ball. “The cybersecurity services opportunity for partners will be larger than selling cybersecurity technology this year, with spending forecast to grow 13.2% to US$143.2 billion in 2023. Managed security services and integration services will be the fastest growing areas.” 

On a regional basis, spending remained resilient in North America (+12.6%), EMEA (+11.1%) and Latin America (+13.4%). Growth rates slowed in Asia Pacific (+8.8%), as organizations scaled back their spending in response to economic headwinds.