Cybersecurity Market Driven by Survival of the Fittest

Charles Darwin’s theory of evolution, introduced in 1859 in ‘On the Origin of Species,’ focused on natural selection—which evolved into the well-known phrase “survival of the fittest.” Applying that to the cybersecurity industry means that only some businesses can compete in the modern cybersecurity landscape and survive the natural selection, and that might not be such a bad thing.

Cybersecurity companies that can’t adapt to the pressures of new threats may slowly dwindle away. Small cybersecurity companies may not be able to survive in an industry driven by larger competitors, panelists said at a recent Center for Strategic & International Studies event in Washington.

Large companies often thrive in the cybersecurity industry due to abundant resources, technical know-how, and seemingly endless budgets, the panelists said. These companies, such as Symantec Corp., Palo Alto Networks Inc., and FireEye Inc., are able to keep up with sophisticated hacking threats and try to innovate new solutions before hackers do.

As hackers use more advanced, trickier attacks, the chances for small cybersecurity business to survive decreases. The small companies “don’t have the budgets and it is too expensive” for them to operate in this space, Dmitri Alperovitch, co-founder and chief technology officer at cybersecurity company CrowdStrike Inc., said at the CSIS event.

Often times, these smaller cybersecurity companies are eaten up by their larger competitors. For example, Symantec has been “seeking small acquisitions to consolidate security products for a mobile and hybrid-cloud environment,” Mandeep Singh, Bloomberg Intelligence industry analyst, said. Additionally, larger cybersecurity vendors have acquired smaller companies “to bolster their market share,” he said. Over the past year, Symantec “bought Blue Coat Systems and Life Lock” as consolidation ramped up “in the endpoint-security segment,” Singh said.

This doesn’t mean small cybersecurity businesses can’t compete, Kristin Royster, senior vice president of global cyber security public policy at Bank of America Corp., said. But company clients will hold them to the same high standards as their larger competitors and they must demonstrate they are proficient in various types of security practices, she said.

While the future may be bleak for some of these small cybersecurity companies, the technology and ideas that they can often innovate will end up helping larger companies thrive in the ever-evolving cybersecurity industry.

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