Amid Inflation Worries, Four Reasons Why Cybersecurity Spending Is on the Rise
Organizations are tightening their budgets to absorb inflationary pressures, but cybersecurity spending will continue to rise in 2023. Here are the top reasons why.
Disruptions associated with the pandemic are now making way for inflationary pressures, forcing organizations to cut back on spending. However, cybersecurity investments continue to see upward growth. Here are some top reasons why organizations are making more money available for cybersecurity purchases.
It’s been a tough few years for businesses. From small and midsize companies to multinational enterprises, no organization has been spared the stress of navigating the new world of pandemic-driven operational pressures.
Even as global conditions trend back toward more typical conditions, a new challenge is on the horizon: Economic recession. According to the Spiceworks Ziff Davis 2023 State of IT report, 83% of organizations are worried about a recession in 2023.
Despite less-than-ideal economic assessments, 51% of companies plan to boost IT spending, with a median increase of 5%. The focus? Cybersecurity.
In this piece, we’ll break down the current state of corporate spending and examine four factors contributing to the continued rise of cybersecurity investment.
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Inflationary pressures affecting IT spending
Thanks to volatile food, energy, and gasoline prices, inflation rises at a rate not seen in 40 years, reaching 8.6% from May 2021 to May 2022. With electricity prices increasing by 12%, natural gas jumping 30.2%, and food costs rising 11.9% the last year, there’s nowhere to go but up.
To help balance budgets and navigate the potential impacts of recessions, companies are reconsidering how and where they spend their money. For example, 43% of respondents to the Spiceworks Ziff Davis’ 2023 State of IT survey said they plan to reduce non-essential spending, 30% are re-evaluating vendors or contracts, 29% are decommissioning infrastructure, and 27% are planning a hiring freeze or a slowdown.
Despite these decreases, research firm Gartner anticipates increased security spending across the board in 2023, with cloud security investment up 26.8%, data privacy and security purchases up 16.9% and 14.2%, respectively, and application security acquisition up 24.7%.
So what’s the big deal? What’s compelling companies to spend more on security even as they scale back other budgets?
Four Factors Influencing Cybersecurity Investments
While each company has its own reasons for prioritizing protective purchases, four common factors are currently influencing security investment. These are:
The role of remote work
Hybrid and remote work isn’t going anywhere. According to Stanford University economics professor Nicholas Bloom, these models are here to stay even if flexible work options encounter short-term challenges as companies look to find balance.
Along with productivity improvements, however, work-from-home initiatives also introduce increased security risks. If attackers can compromise data transfers, eavesdrop on emails, or carry out account takeovers, companies could find themselves facing unexpected “insider” threats.
As a result, companies are now spending more on solutions that specifically address these security concerns. Common purchases include web application firewalls (WAFs), access management tools, and endpoint protection options.
The rise of zero trust
Never trust; always verify. This is the mantra of zero trust network architecture (ZTNA), which Gartner predicts will account for at least 70% of all new remote access frameworks by 2025, up from less than 10% last year.
It makes sense since ZTNA solutions are useful for both in-office and at-home applications. In the office, zero trust tools can help ensure that users are who they say they are by prioritizing authentication over access and, even then, ensuring that access is limited based on employee roles and current projects. For staff working from home, ZTNA offers an alternative to virtual private networks (VPNs) as it is more secure and streamlined.
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The relevance of multi cloud models
More multi-cloud means more security. According to data from Microsoft, 95% of businesses now say that hybrid or multi-cloud strategies are now critical to business success. But with more cloud databases to manage comes increased security risk. The biggest challenge? Visibility. If IT teams can’t see what’s happening, when, and why, attackers can slip through cloud cracks and start sowing chaos.
As a result, Gartner points to a 26.8% boost to cloud access security broker (CASB) and cloud workload protection platform spending in 2023.
The need to prevent reputational loss
The hard truth? Attacks are up across the board. From ransomware efforts to phishing emails to advanced persistent threats (APTs), it’s a question of when, not if, businesses find themselves the targets of malicious actors.
However, customers, stakeholders, and business partners have no patience for compromised systems and lost data. As a result, even a single data breach can significantly impact corporate reputation. Best-case scenario? Companies get back on track after a cybersecurity incident, and most customers return. Worst case? Trust is broken, and businesses are forced to close their doors.
Bottomline: Ensuring cybersecurity is no longer an option
With recession impacts looming, companies are looking to cut back and keep budgets under control. The exception? Cybersecurity. From remote work to zero trust, multicloud to market reputation, increased cybersecurity spending is critical for companies to keep data secure and drive sustained success.
Has your organization cut back on cybersecurity spending in 2022? Comment below or let us know on LinkedIn, Twitter, or Facebook. We would love to hear from you!
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