Defense Cybersecurity Market by Offering (Hardware, Software and Services), Security (Network Security, Endpoint Security, Application Security, Cloud Security), End User (Army, Navy, Air Force), Application and Region - Global Forecast to 2028
[239 Pages Report] The Defense Cybersecurity Market is estimated to be USD 36.9 Billion in 2023 and is projected to reach USD 49.4 Billion by 2028, at a CAGR of 6.0% from 2023 to 2028. The key driving factor for the growth of the Defense Cybersecurity Industry is the continuously evolving and increasingly sophisticated nature of cyber threats. As technological advancements permeate military operations, the attack surface expands, and cyber adversaries develop new tactics to exploit vulnerabilities. The growing complexity of military systems, coupled with the interconnectedness of defense networks, makes them lucrative targets for various malicious actors, including state-sponsored entities, cybercriminals, and hacktivists.
To counter these evolving threats, defense organizations worldwide are compelled to invest significantly in cybersecurity measures. This includes the development and deployment of advanced technologies such as artificial intelligence, and machine learning, among others, to stay ahead of cyber adversaries. The constant need to innovate and enhance cybersecurity capabilities is a fundamental driving force behind the growth of the defense cybersecurity market.
Defense Cybersecurity Market Forecast to 2028
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Defense Cybersecurity Market Dynamics:
Drivers: Expanding Cyberattacks Across Various Defense Industries
In recent years, there has been a substantial rise in the frequency, sophistication, and severity of cyber threats worldwide. These threats come from various sources, including nation-states, hacktivists, cybercriminal organizations, and insider threats. Defense organizations are prime targets for these cyberattacks due to the sensitive and classified nature of the information they handle. For example, in October 2022, the Federal Bureau of Organizations (FBI) National Security agency (NSA) announced State sponsored Cyber attackers successfully breached a defense organization, securing and retaining long-term access to its network, and had illicitly extracted sensitive data from the compromised system from January 2021 till November 2021.
The increasing cyber threats pose a significant challenge to national security. State-sponsored cyberattacks have become a means of waging digital warfare, and defense organizations must be prepared to defend against these attacks. These threats can take many forms, from espionage through Advanced Persistent Threats (APTs), Intellectual Property Theft, and infiltration aimed at stealing classified information to disrupting critical infrastructure and military operations. The consequences of a successful cyberattack on a defense organization can be severe, potentially compromising national security and putting lives at risk.
To mitigate these threats, defense organizations are compelled to invest in robust cybersecurity measures. This includes the development of advanced threat detection and prevention systems, secure communication protocols, and incident response capabilities. Additionally, they must continually adapt and evolve their cybersecurity strategies to keep pace with the ever-changing threat landscape. Thus, the defense cybersecurity market is driven by the need to safeguard national security interests and protect sensitive military information in the face of a growing and evolving cyber threat landscape.
Restraints: Inefficiency of Legacy Systems in the Modern Cybersecurity Landscape
Security legacy systems refer to older, often outdated, technological infrastructures, software, and hardware that have been used within defense organizations for an extended period. These systems were developed in an era when cybersecurity was not a primary concern, and they now pose several restraints in the context of modern cybersecurity efforts.
Legacy systems are typically not designed with robust security features and considerations that contemporary systems benefit from. This makes them highly susceptible to cyberattacks and vulnerabilities. Attackers often target legacy systems because they are aware that these systems may lack the latest security patches, updates, or the capacity to implement advanced security protocols. Updating or replacing these legacy systems can be challenging. The cost associated with updating or replacing these systems is also substantial, requiring a considerable allocation of resources, which may compete with other defense priorities. The rapidly changing nature of cybersecurity requires systems that can be regularly updated and modified to respond to new threats. Legacy systems, with their fixed architectures and limitations, are ill-suited for this purpose.
Opportunities: Boost in International Collaborations
International collaborations refer to the potential for defense organizations from different nations to work together in a coordinated effort to enhance cybersecurity capabilities. In an increasingly interconnected world, where cyber threats often transcend national borders, collaboration on defense cybersecurity is becoming necessary.
One of the key benefits of international collaboration in defense cybersecurity is the pooling of resources, expertise, and threat intelligence. No single nation possesses a monopoly on cybersecurity knowledge or technology. By sharing information, experiences, and best practices, nations can collectively bolster their cybersecurity defenses. This collaboration allows for a more comprehensive understanding of evolving cyber threats and the development of effective countermeasures.
Furthermore, international collaboration can foster the development of global standards and norms in cybersecurity. These standards can guide responsible behavior in cyberspace and establish guidelines for addressing cyberattacks. For example, countries can agree on rules of engagement and response mechanisms in the event of a cyber incident. This reduces the risk of misunderstandings or escalations in a cyber conflict.
Additionally, collaborative efforts can lead to joint research and development initiatives, enabling the creation of cutting-edge cybersecurity technologies. This can reduce duplication of effort, drive cost-efficiency, and accelerate innovation in the field of defense cybersecurity. International collaboration also enhances incident response capabilities. In the event of a large-scale cyberattack, nations can coordinate their responses, share threat intelligence, and work together to identify and neutralize threats, minimizing the impact of the attack.
Challenges: Shortage of Skilled Personnel
The foremost challenge facing the defense cybersecurity landscape involves the shortage of skilled personnel. As the complexity and frequency of cyber threats continue to escalate, the demand for qualified cybersecurity professionals has reached unprecedented levels. The shortage is multifaceted, stemming from the rapid evolution of cyber threats, the expanding attack surface resulting from increased digital connectivity and the intricate nature of the cybersecurity domain.
The field of cybersecurity is marked by its dynamic and ever-changing nature. Cyber threats evolve at an alarming rate, with malicious actors continuously devising new techniques and tactics to breach defense systems. This rapid evolution necessitates a workforce with current knowledge and the agility to adapt swiftly to emerging threats. The shortage is exacerbated by the time it takes to train and educate cybersecurity professionals, creating a perpetual lag between the skills required and those available in the workforce. The expanding attack surface, driven by the increasing interconnectedness of defense networks and the adoption of emerging technologies, puts immense pressure on cybersecurity personnel. The Internet of Things (IoT), cloud computing, and other innovations broaden the scope of potential vulnerabilities, demanding a workforce capable of securing diverse and complex systems. This widening attack surface requires cybersecurity professionals with specialized expertise in cloud security, IoT security, and industrial control systems.
Lastly, the intricacy of the cybersecurity domain itself contributes to the scarcity of skilled personnel. Cybersecurity is not a monolithic field but comprises various specialized domains, including penetration testing, threat intelligence, incident response, and risk management. Each domain requires a unique skill set, and individuals proficient in one area may not necessarily possess expertise in others.
Defense Cybersecurity Market Ecosystem
Booz Allen Hamilton Inc. (US), General Dynamics Corporation (US), Cisco Systems, Inc. (US), Microsoft (US), Leidos (US), IBM (US), Thales (France), Lockheed Martin Corporation (US), Northrop Grumman (US), Raytheon technologies (US), L3Harris Technologies Inc. (US), Leonardo S.p.A (Italy), CACI International Inc (US), Elbit Systems Ltd (Israel), and BAE Systems (UK) are some of the leading companies in the defense cybersecurity market.
Based on End Users, the Navy Segment Accounts for the Highest Market Share in Defense Cybersecurity Market During the Forecast Period
The Navy segment is expected to account for the highest market share during the forecast period. Naval forces rely extensively on network-centric operations, where ships, submarines, aircraft, and shore-based facilities are interconnected to enhance situational awareness and operational effectiveness. The complexity and scale of maritime networks make them prime targets for cyber threats, necessitating advanced cybersecurity measures. The Navy's emphasis on network-centric warfare positions it at the forefront of investing in robust defense cybersecurity solutions. Naval assets represent critical infrastructure, including aircraft carriers, submarines, and communication hubs. Securing these assets against cyber threats is vital for maintaining operational capabilities and strategic advantage. The Navy's focus on protecting critical maritime infrastructure contributes to its leadership role in driving advancements in defense cybersecurity.
Based on Offering, the Software and Services Segment Accounts for the Largest Market Share in the Defense Cybersecurity Market During the Forecast Period
The Software and Services segment is anticipated to account for the highest market share in the defense cybersecurity market during the forecast period due to several key factors:
The defense sector is witnessing a rapid integration of cutting-edge technologies, such as artificial intelligence, machine learning, and quantum-resistant cryptography. Software solutions play a crucial role in implementing and adapting to these advancements, providing the agility required to stay ahead of emerging cyber threats.
The adoption of cloud computing in defense operations requires robust software solutions to secure data stored and processed in cloud environments. Cloud-based cybersecurity services offer scalability and flexibility, allowing defense organizations to adapt to changing requirements efficiently.
Based on Security Type, the Network Security Segment is Projected to Account for the Largest Market Share During the Forecast Period
Network Security is projected to lead the defense cybersecurity market by Security Type. The expanding attack surface resulting from the integration of advanced technologies, such as the Internet of Things (IoT), cloud computing, and 5G networks, introduces new vulnerabilities. Network Security is crucial for protecting against cyber threats targeting these diverse entry points, preventing unauthorized access, and ensuring the secure exchange of information. Network Security solutions enable real-time monitoring of network traffic, allowing for the rapid detection of anomalies and potential cyber threats. The ability to respond promptly to security incidents is critical in minimizing the impact of cyber attacks and maintaining operational continuity.
North America is Expected to Lead the Defense Cybersecurity Market in 2023
The Defense Cybersecurity market in the North American region is experiencing significant growth due to several key factors.
- Military Modernization: North American nations, especially the U.S., are actively modernizing their military capabilities, integrating advanced technologies such as artificial intelligence, autonomous systems, and network-centric operations. The need to protect these sophisticated military assets against cyber threats propels the demand for advanced defense cybersecurity solutions, further solidifying North America's leadership in the market.
- Global Cybersecurity Standards: North America plays a leading role in shaping global cybersecurity standards and practices. The region's commitment to establishing and adhering to high cybersecurity standards enhances its influence in international collaborations, making North American solutions and expertise widely recognized and adopted.
- Large Defense Budgets: The United States, in particular, allocates substantial budgets to defense and cybersecurity initiatives. The significant financial investments in research and development, infrastructure, and cybersecurity capabilities contribute to the region's dominance in the defense cybersecurity market. The financial commitment enables the deployment of state-of-the-art technologies and the continuous improvement of cybersecurity measures.
Defense Cybersecurity Market by Region
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Defense Cybersecurity Industry Companies - Top Key Market Players
Booz Allen Hamilton Inc. (US), General Dynamics Corporation (US), Cisco Systems, Inc. (US), Microsoft (US), Leidos (US), IBM (US), Thales (France), Lockheed Martin Corporation (US), Northrop Grumman (US), Raytheon technologies (US), L3Harris Technologies Inc. (US), Leonardo S.p.A (Italy), CACI International Inc (US), Elbit Systems Ltd (Israel), and BAE Systems (UK) are some of the leading companies in the Defense Cybersecurity Companies. These companies have well-equipped manufacturing facilities and strong distribution networks across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
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Report Metric |
Details |
Estimated Market Size |
USD 36.9 Billion in 2023 |
Projected Market Size |
USD 49.4 Billion by 2028 |
Growth Rate |
6.0% |
Market Size Available for Years |
2019–2028 |
Base Year Considered |
2022 |
Forecast Period |
2023–2028 |
Forecast Units |
Value (USD million) |
Segments Covered |
By Offering, By Security Type, By End User, By Application and by Region |
Geographies Covered |
North America, Europe, Asia Pacific, the Middle East Rest of the World |
Companies Covered |
Booz Allen Hamilton Inc. (US), General Dynamics Corporation (US), Cisco Systems, Inc. (US), Microsoft (US), Leidos (US), IBM (US), Thales (France), Lockheed Martin Corporation (US), Northrop Grumman (US), Raytheon technologies (US), L3Harris Technologies Inc. (US), Leonardo S.p.A (Italy), CACI International Inc (US), Elbit Systems Ltd (Israel), BAE Systems (UK), SAIC (US), ASGN Incorporated (US), AT&T (US), Echelon Services (US), Five Stones Research Corporation (US), Rite-Solutions Inc., Sealing Technologies (US), Axellio (US), Hub Security (Israel), Countercraft (Spain) |
Defense Cybersecurity Market Highlights
This research report categorizes the Defense Cybersecurity market based on Offering, Security Type, End User, Application, and Region
Segment |
Subsegment |
By Security Type : |
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By Offering : |
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By Application : |
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By End User: |
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By Region: |
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Recent Developments
- In October 2023, the US Defense Information Systems Agency (DISA) (US) developed a Zero Trust Network named Thunderdome. The contract is valued at USD 1.86 Billion.
- In January NATO awarded a contract to IBM, which will encompass the integration of cyber defense capabilities and related configuration services, extending through 2025, with an additional two-year option. The contract is valued at USD 33.6 million.
- In June 2021, Cisco Systems, Inc. (US) received an investment worth USD 1.18 Billion to provide Smart Net Total Care and software services.
Key Questions Addressed by the Report:
What is the current size of the defense cybersecurity market?
The Defense Cybersecurity market is estimated to be USD 36.9 Billion in 2023 and is projected to reach USD 49.4 Billion by 2028, at a CAGR of 6.0% from 2023 to 2028.
What are the key sustainability strategies adopted by leading players operating in the defense cybersecurity market?
Response: Key players have adopted various organic and inorganic strategies to strengthen their position in the defense cybersecurity market. Booz Allen Hamilton Inc. (US), General Dynamics Corporation (US), Cisco Systems, Inc. (US), Microsoft (US), Leidos (US), IBM (US), Thales (France), Lockheed Martin Corporation (US), Northrop Grumman (US), Raytheon technologies (US), L3Harris Technologies Inc. (US), Leonardo S.p.A (Italy) are some of the leading companies in the defense cybersecurity market.
What new emerging technologies and use cases disrupt the defense cybersecurity market?
Response: Emerging technologies, such as Biometric Technologies, Blockchain Technology, and Quantum Computing, could disrupt the software aspects of defense cybersecurity.
Who are the key players and innovators in the ecosystem of the defense cybersecurity market?
Response: Booz Allen Hamilton Inc. (US), General Dynamics Corporation (US), Cisco Systems, Inc. (US), Microsoft (US), Leidos (US), IBM (US), Thales (France), Lockheed Martin Corporation (US), Northrop Grumman (US), Raytheon technologies (US), L3Harris Technologies Inc. (US), Leonardo S.p.A (Italy).
Which region is expected to hold the highest market share in the defense cybersecurity market?
Response: In 2023, North America is expected to hold the greatest market share for the defense cybersecurity market during the forecast period, and Canada is anticipated to grow at the highest CAGR.
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This research study involved the extensive use of secondary sources, directories, and databases, such as the Stockholm International Peace Research Institute (SIPRI), Department of Defense (DoD), UN Comtrade, Organization for Economic Cooperation and Development (OECD), and Factiva, to identify and collect relevant information on the defense cybersecurity market. Primary sources included industry experts from the concerned market, preferred suppliers, manufacturers, solution providers, technology developers, alliances, and organizations related to all segments of the value chain. All primary sources were interviewed to obtain and verify critical qualitative and quantitative information as well as assess the prospects of the market.
In-depth interviews were conducted with various primary respondents, including key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, among others, to obtain and verify critical qualitative and quantitative information and to assess future prospects of the market.
Secondary Research
The market share of companies in the defense cybersecurity market was determined using secondary data made available through paid and unpaid sources and by analyzing product portfolios of major companies operating in the market. These companies were rated based on the performance and quality of their products. These data points were further validated by primary sources.
Secondary sources that were referred to for this research study on the defense cybersecurity market included government sources such as the US Department of Defense (DoD), defense budgets, military modernization program documents, corporate filings such as annual reports, investor presentations, and financial statements, and trade, business, and professional associations. This secondary data was collected and analyzed to arrive at the overall size of the rockets and missiles market, which was further validated by primary respondents.
Secondary research was primarily used to obtain critical information about the value and supply chain of the market. It was also used to identify key players by various products, market classifications, and segmentation per their offerings. Secondary information helps understand industry trends related to defense cybersecurity offering, application, security type, end user and regions, and developments from the market and technology-oriented perspectives.
Primary Research
In the primary research process, various sources from the supply and demand sides were interviewed to obtain qualitative and quantitative information on the market. Primary sources from the supply side included industry experts such as vice presidents, directors from business development, marketing, and product development/innovation teams, related key executives from the cyber industry, defense cybersecurity solution providers, integrators, and key opinion leaders. Extensive primary research was conducted after obtaining information about the current scenario of the defense cybersecurity market through secondary research. Several primary interviews were conducted with the market experts from the demand and supply sides across major countries of North America, Europe, Asia Pacific, the Middle East, and Rest of the World (RoW).
This primary data was collected through questionnaires, emails, and telephonic interviews.
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Market Size Estimation
Both the top-down and bottom-up approaches were used to estimate and validate the size of the defense cybersecurity market. The following figure represents the overall market size estimation process employed for this study on the market.
The research methodology used to estimate the market size included the following details:
- Secondary research identified key players in the defense cybersecurity market, and their market share was determined through primary and secondary research. This included a study of annual and financial reports of top market players and extensive interviews of leaders such as CEOs, directors, and marketing executives of leading companies operating in the market.
- All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources.
- All possible parameters that affect the markets covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data on the rocket and missile market.
This data was consolidated, enhanced with detailed inputs, analyzed by MarketsandMarkets, and presented in this report.
Bottom-Up Approach
The study analyzed the defense cybersecurity programs of multiple countries to understand various schemes and funding allocations for defense cybersecurity. After this, each program and its spending on procurement were tracked. For example, Booz Allen Hamilton Inc. (US) received an investment worth USD 1.86 Billion for the development of Zero Trust Network for the Defense Information Systems Agency (DISA), US. The above data was further refined by tracking various developments, such as contracts related to the upgrade of existing fleets, procurement of new platforms, and product development issued by the defense departments. The data sources considered for the market estimation and forecasting include the US DoD budget, cybersecurity development and integration, defense program publications, defense insights and data by SIPRI, defense expenditure of countries, and conflicts and geopolitical factors.
The bottom-up approach was employed to arrive at the overall size of the defense cybersecurity market from the revenues of key players and their shares in the market. Calculations based on the revenues of key players identified in the market led to the overall market size. The bottom-up approach was also implemented for data extracted from secondary research to validate the market segment revenues obtained. The market shares were then estimated for each company to verify the revenue shares used earlier in the bottom-up approach. With the data triangulation procedure and data validation through primaries, the overall parent market size and each individual market size were determined and confirmed in this study.
The bottom-up approach, employed to determine the overall size of the defense cybersecurity market, is delineated below.
Step 1:
- Identifying top countries based on defense cybersecurity programs and budget spending
- Identifying defense cybersecurity investments for top countries
Step 2:
- Identifying whether defense cybersecurity considered in the scope is used or not for the top countries
- Identifying the use of defense cybersecurity by various industries
Step 3:
- Selecting the top countries based on their military spending
-
Developing a matrix for rating these countries on the basis of the following factors
- MTCR Member Country
- Defense Budget
- Warfare Platform
- NATO Member Country
- Development Index
- Conflicts & Geopolitics
- Rating the selected countries for each parameter to determine the overall rating
- Grouping the countries based on the overall rating synergy for correlation analysis
Step 4
- Adding the data to the matrix after calculating the market size for the selected countries
- Establishing a relation between the derived market size and the program spending and development of respective countries to arrive at a percentage
Step 5
- Validating the data with the supply-side analysis by identifying the product revenue during the last five years
In September 2023, the UK Ministry of Defence awarded a contract worth USD 11 million to Leonardo S.p.A. (Italy) to support UK Armed Forces Cyber Operations.
Market Size Estimation Methodology: Bottom-Up Approach
Top-Down Approach
In the top-down approach, the overall size of the defense cybersecurity market was used to estimate the size of individual markets (mentioned in the market segmentation) through percentage splits obtained from secondary and primary research. The size of the most appropriate, immediate parent market was used to implement the top-down approach to calculate the sizes of specific market segments. The approach was also implemented to validate the revenues obtained for various market segments. Market share was estimated for each company to verify the revenue share used earlier in the bottom-up approach. With the data triangulation procedure and data validation through primaries, this study determined and confirmed the overall size of the parent market and each market segment. The following figure shows the overall market size estimation process employed for this study.
Market Size Estimation Methodology: Top-Down Approach
Data Triangulation
After arriving at the overall size of the defense cybersecurity market from the market size estimation process explained above, the total market was split into several segments and subsegments. The data triangulation and market breakdown procedures explained below were implemented, wherever applicable, to complete the overall market engineering process and arrive at the estimated sizes of different market segments and subsegments. The data was triangulated by studying various factors and trends from both the demand and supply sides. Additionally, the market size was validated using both the top-down and bottom-up approaches.
The following figure indicates the market breakdown structure and the data triangulation procedure implemented in the market engineering process to develop this report.
The figure above demonstrates the core data triangulation procedure used in this report for every market, submarket, and subsegment. The percentage splits of various market segments, including offering and security type, were used to determine the size of the defense cybersecurity market.
Market Definition
Defense cybersecurity, often referred to as the field of military and national security cyber defense, encompasses the strategies, technologies, and practices employed to safeguard a nation’s military and critical infrastructure from cyber threats and attacks. Defense cybersecurity focuses on countering a wide range of cyber adversaries, including state-sponsored actors, hacktivists, and criminal organizations, who seek to compromise sensitive government systems, military operations, and essential infrastructure like power grids, transportation networks, and financial institutions.
Defense cybersecurity solutions encompass a spectrum of measures, including intrusion detection, threat intelligence, encryption, secure communication protocols, and the development of resilient infrastructure that can withstand cyberattacks. The defense cybersecurity market involves government agencies, private defense contractors, cybersecurity companies, research institutions, and international collaborations, all working together to stay ahead of evolving threats and protect national security interests.
Key Stakeholders
- Aerospace & Defense Companies
- Space Industry Players
- Research Institutions and Universities
- Testing and Certification Organizations
- Material and Technology Providers
- Investors and Financial Institutions
- Regulatory Bodies
Report Objectives
- To define, describe, and forecast the size of the defense cybersecurity market based on security type, end user offering, application, and region from 2023 to 2028
- To forecast the size of market segments with respect to major regions, namely North America, Europe, Asia Pacific, Middle East, and the Rest of the World (RoW) Africa & Latin America
- To identify and analyze key drivers, restraints, opportunities, and challenges influencing the growth of the global defense cybersecurity market
- To strategically analyze micromarkets1 with respect to individual growth trends, prospects, and their contribution to the defense cybersecurity market
- To analyze opportunities for stakeholders in the defense cybersecurity market by identifying key market trends
- To analyze competitive developments such as contracts, acquisitions and expansions, agreements, partnerships, product launches, and research & development (R&D) activities in the defense cybersecurity market
- To provide a detailed competitive landscape of the -market, in addition to an analysis of business and corporate strategies adopted by leading market players
- To strategically profile key market players and comprehensively analyze their core competencies
To strategically profile key market players and comprehensively analyze their core competencies2
1. Micro markets refer to further segments and subsegments of the hypersonic flight market included in the report.
2. The core competencies of the companies were captured in terms of their key developments and strategies adopted by them to sustain their position in the market.
Available customizations
Along with the market data, MarketsandMarkets offers customizations as per the specific needs of companies. The following customization options are available for the report:
Product Analysis
- Product matrix, which gives a detailed comparison of the product portfolio of each company
Regional Analysis
- Further breakdown of the market segments at the country level
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Growth opportunities and latent adjacency in Defense Cybersecurity Market