USA News Group Commentary
VANCOUVER – USA News Group – With costly attacks on the rise, the global cybersecurity market is projected to explode by ten times to between $1.5-2 trillion in the next few years, according to a report from McKinsey and Company. It’s a market that’s prime to explode, especially when the costs of cybercrime soaring to an alarming $8 trillion. The market potential is waking all sorts of tech giants into a flurry of cybersecurity M&A activity, including recent mega-deals such as the Accenture plc (NYSE:CAN) acquisition of Innotec Security, SentinelOne, Inc. (NYSE:S) being set to acquire cybersecurity consulting firm Krebs Stamos Group, and Palo Alto Networks, Inc. (NASDAQ:PANW) set to acquire Talon Cyber Security. With each new M&A event, the spotlight turns to potential future targets, such as Integrated Cyber Solutions Inc. (CSE:ICS) and HUB Cyber Security Ltd. (NASDAQ:HUBC).
Since going public earlier this year, Integrated Cyber Solutions Inc. (CSE:ICS) has been building momentum. Their latest announcements include the introduction of new solutions catering to Small-to-Medium-Business (SMB) and Small-to-Medium Enterprise (SME) sectors and the significant customer renewal and expansion of services with a longstanding client in the power, renewables, and broader energy value chain sector.
Attacks on the energy sector have become more common place, and increasingly costly. For example, a cyberattack earlier this year on Canada’s Suncor Energy was projected to cost the company millions of dollars, according to experts.
With their latest customer renewal, Integrated Cyber initially began their relationship through their “land and expand” business model, by delivering Managed Detection and Response (MDR) services. Over the years since establishing the relationship, ICS has successfully improved the client’s security profile across multiple locations, while delivering value and growth alongside their clients.
In particular, the MDR process is part of a greater Managed Cyber Security Awareness and Training platform, utilizing the Proofpoint platform, which private equity firm Thoma Bravo acquired for $12.3 billion in 2021.
“While the cybersecurity companies targeting SMBs and SMEs are nascent, they already represent billions in revenue,” said Alan Guibord, CEO of Integrated Cyber Solutions. “With hundreds of thousands of targeted businesses in just the U.S. and Canada, this market yearns for premium services—akin to those enjoyed by large corporations—but at cost-effective prices.”
In the case of HUB Cyber Security Ltd. (NASDAQ:HUBC), the confidential computing cybersecurity solutions and services developer is now forecasting over $10 million in new contracts in 2024 from a key contract with a top US-based enterprise AI firm, Blackswan Technologies. Their strategic alliance is ushering in the commencement of a project in partnership with a globally renowned major banking group.
The major project together has led the two companies to explore the possibility of a potential merger. Together, the two companies are aiming to revolutionize the banking sector across various regulatory domains, by streamlining operations, reducing ownership costs, and eliminating the need for data lakes and ETL (Extract, Transform, Load) processes.
“Importantly, the collaboration’s scope extends beyond a single client, offering the potential for expansion and engagement of additional customers, including governments and large enterprises,” said Uzi Moskowitz, CEO of Hub Security. “This collaboration underscores our commitment to innovation and reinforces our position as a leader in the confidential computing landscape.”
The surge in M&A activity in the cybersecurity space is gaining momentum, as evidenced by the recent acquisition of Innotec Security by Accenture plc (NYSE:CAN). Known as one of the most prominent cybersecurity service providers in the Spanish market, Innotec brings with it an additional 500 cybersecurity professionals to Accenture Security’s already large 20,000-professionals workforce.
“Innotec Security is an excellent and well-regarded company in Spain with a highly skilled cybersecurity team, which will significantly enhance our security footprint in the market,” said Paolo Dal Cin, global lead of Accenture Security. “Importantly, this acquisition will also expand our regional capabilities and resources and help us address the growing demand we’re seeing for managed security services across Europe.”
According to Accenture’s Cyber-Resilient CEO report, 70% of CEOs in Spain from large organizations (revenues of more than US$1 billion) are concerned about their organizations’ ability to avert or minimize damage to the business from a cyberattack. Yet nearly two-thirds (63%) of CEOs said their organizations don’t incorporate cybersecurity into business strategies, services or products from the outset.
Two other acquisitions announced that are set to take place are from SentinelOne, Inc. (NYSE:S) and Palo Alto Networks, Inc. (NASDAQ:PANW) respectively.
In the case of SentinelOne, the cybersecurity giant said it is acquiring advisory firm Krebs Stamos Group in a move towards creating a new entity called PinnacleOne Strategic Advisory Group.
“PinnacleOne is a direct response to our customers increasingly asking for help in solving big picture security challenges, and expands our ability to assist private sector enterprises and public sector organizations in securing the future,” said Eran Ashkenazi, Chief Customer Officer, SentinelOne. “Our partners will also benefit from tapping into this expertise to complement the services they offer to their most high-profile clients.”
As per the statement, PinnacleOne will function as a strategic advisory firm and a readily available think tank. Their primary objective is to assist clients in comprehending their potential adversaries, their motives, assessing their digital presence, evaluating the robustness of their security measures, and determining the necessary actions to fulfill their security obligations. Additionally, PinnacleOne offers guidance to executives in navigating the constantly changing regulatory landscape and developing effective security strategies that empower them to thrive in today’s ever-changing threat landscape.
For Palo Alto Networks, the world’s cybersecurity leader announced its intent to acquire start-up Talon Cyber Security, a pioneer of Enterprise Browser technology. Key to the deal, Talon’s Enterprise Browser provides an innovative, cutting-edge solution, which when combined with Palo Alto’s Prisma SASE, will enable users to securely access business applications from any device, including mobile and other non-corporate devices, while delivering seamless user experiences.
“Talon enables organizations to secure all work activity via an Enterprise Browser, without touching the personal usage of the device or impacting user privacy,” said Lee Klarich, Chief Product Officer for Palo Alto Networks. “Integrating Talon with Prisma SASE will enable Palo Alto Networks to securely connect all users and devices to all applications, including private applications, and apply consistent security no matter who the user is and what device they use for work.”
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