Cyber Firms Revert to the Mean

While by no means a safe haven, the cybersecurity sector has outpaced the broader tech market by a meaningful margin. That is up until very recently. Cyber security remains the number one technology priority for the c-suite but as we’ve previously reported, the CISO’s budget has constraints; just like other technology investments. Recent trends show that economic headwinds have elongated sales cycles, pushed deals into future quarters and, just like other tech initiatives, are pacing cybersecurity investments and breaking them into smaller chunks. In this Breaking Analysis we explain how cybersecurity trends are reverting to the mean and tracking more closely with other technology investments. We’ll make a couple of valuation comparisons to show the magnitude of the challenge and which cyber firms are feeling the heat, and which aren’t as much. We’ll then show the latest survey data from ETR to quantify the contraction in spending momentum and close with a glimpse at the landscape of emerging cybersecurity companies that could be ripe for acquisition, consolidation or disruptive to the broader market.

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