ON EMERGING OPPORTUNITIES
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- At the first in-person RSA show since February 2020, we identified several takeaways that reflect how cybersecurity has both changed and stayed the same over the past two years.
- The complexity of the cybersecurity environment and cybersecurity threats have increased since the beginning of the pandemic.
- The cybersecurity market grew through the pandemic, and growth probably accelerated. While the outlook is positive, the mood of the conference was that the sector is recession-proof. We think of the market as more recession-resistant and are concerned sentiment will be too bullish should the economy continue to weaken.
- The shortage of cybersecurity talent continues, leading to weakened security and demand for cybersecurity solutions that enable companies to achieve adequate cybersecurity with fewer internal personnel.
- The cybersecurity market has become more concentrated among a handful of large players.
- Software bill of materials (SBOM) is an emerging, interesting area that helps organizations deal with the increasing interdependence of software products and systems.
TABLE OF CONTENTS
Includes discussion of CSCO, FTNT, MSFT and PANW
Change and continuity
Complexity of security environment increased; threats increasing
Growth and the outlook: Recession-proof or recession-resistant?
Cybersecurity talent shortage continues
Increased market concentration
Software bill of materials
The more things change, the more they stay the same
Cybersecurity index declines over past year, still ahead of Nasdaq
Q2 cybersecurity M&A activity steady
Q2 cybersecurity private placement pace in line with recent levels
Change and continuity
For us and many others, the resumption of the RSA conference as an in-person event earlier this month marked the end of the pandemic's trade-show hiatus, and it was great to be back. When we attended the February 2020 RSA conference in San Francisco, little did we know the emerging coronavirus meant it would be the last conference of any type we'd attend in person for more than two years. While this year's show did not feel nearly as crowded or chaotic as some of the RSA shows we've attended in the past, the exhibit floor and related surroundings were busy enough, and masks on attendees rare enough, that there was a relatively normal RSA-show vibe.
We did not find any single underlying theme or emerging technology that dominated the conference, but we did identify several takeaways that reflect how cybersecurity has both changed and stayed the same over the past two years. Some takeaways reflected a continuation of historical challenges. Some reflected how certain ongoing challenges became more acute during the pandemic. A few reflected new challenges that emerged during the pandemic.