New data from Canalys reveals cybersecurity spending increased in the second quarter of 2024 on the back of bigger deals and a focus on vendors cross-selling their platforms.
The spending increase is despite customers scrutinising budgets and taking longer to sign off on deals due to ongoing macroeconomic uncertainty and political disruption affecting spending.
The worldwide cybersecurity technology market grew 9.9% year on year to USD21.1 billion. This growth, while slightly below Canalys’ best-case forecast, highlights the ongoing prioritisation of cybersecurity.
The top 12 vendors benefited the most from customers taking early steps to transitioning to platforms. Collectively, they accounted for 53.2% of total spending in the second quarter of 2024, up from 51.9% last year. Palo Alto Networks (+11.2%) extended its leading market share, driven by the uptake of its Prisma Cloud, Cortex for SecOps, network security software and SASE. Its acquisition of IBM’s QRadar assets will help boost its platformisation strategy.
Fortinet (+11.1%) ranked second. Its growth re-accelerated in Q2 as its pivot to SecOps and SASE boosted its results while signs of a firewall recovery emerged. Microsoft (+18.6%) continued to gain share by focusing on platform adoption via E5 license enablement. Cisco (+5.3% excluding Splunk) completed its acquisition of Splunk, adding to its platform approach. CrowdStrike (+33.2%) made gains via customer adoption of its Falcon platform, though repercussions from the July 19 outage will hurt its future results.
“Organisations have been re-architecting their IT stacks for cloud and, more recently, for AI. They must also re-architect their cybersecurity to increase their resilience and counter the surge in ransomware attacks,” said Canalys Chief Analyst Matthew Ball. “Vendors are positioning their cybersecurity platforms to reduce customers’ complexity by consolidating redundant and legacy point products. But this also reduces organisations’ resilience by increasing dependency on fewer vendors. A balanced approach is needed.”
“Platform vendors must have an integration-first strategy, supporting a wide range of ISVs and simplifying multi-vendor procurement,” he added. “They must support and enable an expanded ecosystem of transactional and service-led partners, particularly GSIs, MSSPs, MSPs and new types of partners, such as cyber-insurers. They must also reward their partners for innovation and value creation that ultimately drives customer demand for their platform.”
In the second quarter of 2024, total cybersecurity technology spending through the channel accounted for 91.3%. Spending through systems integrators grew 9.3%, and MSSPs increased 12.0%.
All regions grew in Q2, with growth rates improving in Asia Pacific (+8.0%) and EMEA (+9.8%). Growth in North America (+10.3%) remained robust, though it slowed from last quarter as recession concerns from rising unemployment affected economic confidence and levels of spending. Latin America (+11.2%) was the fastest-growing region.
“Cybersecurity services will be more important than ever as customers look to their partners to advise, design, procure, build, adopt and manage their platform strategies,” said Canalys Research Analyst Srikara Upadhyaya. “For every dollar of cybersecurity technology spent by organisations this year, partners will generate USD1.90 on average from services, with managed security services, including MDR, incident response, managed SOC and technology, representing just over half of the opportunity. Cybersecurity services spending will grow 12.9% to USD163.3 billion this year.”
