Key takeaways from Symantec's 2Q15 earnings (Part 11 of 14)
Spending on global cyber security market expected to increase
As discussed in an earlier part of this series, SMAC (social, mobile, analytics, and cloud) has led to increased security concerns, ease of access to malware and viruses, and increasing cyber safety awareness in organizations. These issues have led to global spending on cyber security, which is expected to reach approximately $71.1 billion in 2014. Gartner expects total cyber security spending to grow by an additional 8.2% in 2015 to reach $76.9 billion. Symantec Corporation (SYMC), because of its strong presence in the security market, is expected to benefit from this trend. Technology leaders such as Hewlett-Packard (HPQ) and Cisco Systems (CSCO) as well as a plethora of new players are also seeking growth opportunities in the cyber security space.
ETFs that have significant exposure to Symantec include the PowerShares QQQ Trust ETF (QQQ) and the Technology Select Sector SPDR Fund (XLK). These ETFs are likely to benefit when the company posts positive results.
IT security in Middle East and North Africa (or MENA) is expected to reach $1 billion
In the words of Eric Paulak, managing vice president of research at Gartner, “In response to the recent spate of security threats faced by organizations in the Middle East, a majority of the security projects currently underway and in the pipeline are focused on improving the security operations and incident response capabilities of enterprise infrastructure.” A report by Gartner says spending on information security is expected to reach $1 billion in 2014, an increase of 8% over 2013. According to the same research report, network security equipment and security services are expected to account for approximately 75% of enterprise spending in 2014. This trend is expected to continue until 2018.
Regulatory pressure expected to fuel spending on cyber security
Gartner states that regulatory compliance has been a major factor driving spending on security in the last three years, particularly in the United States. This trend is expected to continue in 2014. Broader data privacy legislation such as the Australian Privacy Act is expected to maintain spending on security in 2014. Increased pressure by China’s regulatory bodies to protect personal information, personal data protection laws in Singapore and Malaysia, and planned implementation of an addition to the EU Data Protection Directive all imply the intensification of regulatory pressure on cyber security.