How Big Is the Operational Technology (OT) Security Market?
The phrase “network security” tends to bring to mind IT teams attending to various computers across rows of cubicles. However, many industries that don’t fit the traditional office concept require network security to function properly and productively.
One such market is operational technology (OT): the hardware and software that monitors industrial equipment, processes, assets, and more. As industrial equipment gets smarter and more sophisticated, the need for security only increases, which is why the operational technology security market has become a major force in recent years.
If your business relies on operational technology, but you fear your security measures aren’t keeping up with progress, it’s not too late. We’ve prepared a detailed breakdown of the expanding operational technology security market, including different categories, their market values, and potential for further growth.
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What Is the Size of the Operational Technology Security Market?
The OT cybersecurity market will more than double in less than five years. According to a July 2022 report from MarketsandMarkets, the operational technology security market is estimated at $15.5B and will maintain a compound annual growth rate of 15.8% from 2022 to 2027 to reach $32.4B. Notably, that growth puts the OT security market in contention to outpace the projected 13.4% CAGR for the broader cybersecurity market from 2022 to 2029.
Many necessity-driven advancements in cybersecurity are helping to power that massive growth, but the best defenses are the kind you have before a new threat emerges. If you want to find a fast and effective way to strengthen your organization’s OT security before attack-driven downtime starts chipping away at your bottom line, contact Byos today.
Operational Technology Security Market Categories
OT security isn’t a monolith: Several smaller markets comprise the ecosystem. We have organized those technologies in the list below relative to their impact on OT network security posture. The impact factors considered include:
- The effectiveness of the technology at reducing risk
- The effort and cost to implement
- The dependence on lower-ranked technologies to operate without or without higher-ranked technologies
- The historical success rate of the technology being deployed at past installations
Companies are advised to focus on successfully implementing the solutions in the immediate impact category first, as they will deliver the greatest ROI, and then work their way down. For an organization to achieve a fully-mature security posture, all the following components must be in place. But you can’t expect to do all these things at the same time. So we’ve ordered these technologies here in seven core categories of the operational technology security market and their overall importance in value:
Immediate Impact Technologies
- Network Security: Microsegmentation can be used to implement Zero Trust principles in OT environments. In addition, leading solutions work with legacy devices and provide seamless third parties access, key features for industrial players. The microsegmentation market is expected to reach $3.6B by 2027, growing at a CAGR of over 28%.
- Asset Management: In OT, an asset refers to a device on a network. Four components comprise this category: asset discovery, inventory, classification, and configuration and vulnerability management. The global enterprise asset management marketplace grew to $3.9B in 2021, a figure that’s expected to rise to $10.6B by 2030 with a CAGR of 11.75%.
- Application Security: Typically built directly into OT technologies, application security provides critical protection against cyber threats. Valued at just under $6B in 2020, the application security market — for both IT and OT — is projected to be $33.9B by 2030.
Medium Impact Technologies
- Identity and Access Management: Also known as IAM, identity and access management refers to the framework IT managers use to control user access and protected information. As of 2022, IAM is a $13.4B industry, and that’s expected to rise at a CAGR of 13.7% to reach $25.6B by 2027.
- MDR/XDR: Managed detection and response (MDR) and extended detection and response (XDR) help ensure organizations can identify and remediate security incidents as fast as possible. The global MDR is projected to approach $6.1B by 2028 — up from $1.4B in 2018 — and the XDR market is expected to increase from $985M in 2022 to $2.4B by 2027.
Limited Impact Technologies
- Security Information and Event Management: Used to provide real-time analysis of security alerts, the $2.83B security information and event management (SIEM) market is poised to reach $6.24B by 2027, thanks to a 10.4% CAGR.
Industries Primed For OT Security Market Growth
While OT security is increasingly essential across many industries, it is crucial within energy and utilities, manufacturing, and critical infrastructure.
Energy and Utilities
The energy sector is essential to nearly every aspect of modern life. Unfortunately, OT involved in the energy sector faces an especially high-security risk. For instance, the Colonial Pipeline ransomware attack forced the company to disconnect its OT systems to contain the attack's impact on its operations. These types of circumstances make the energy industry one of the top emerging markets for OT security needs. The market budget for securing OT in this industry is upwards of $200 million in the United States alone and is predicted to increase at a CAGR of 8.82% by 2026.
Another strong indicator of the energy sector’s growing investment into the operational technology security market: A statement made by U.S. Secretary of Energy Jennifer Granholm. When commenting on the U.S. government’s budget for the 2022 fiscal year, Granholm requested $201M be put aside to “advance policies, technologies, and initiatives that will increase the visibility of physical and cyber threats in the operational technology environment.”
Science and Engineering
Without the right OT security, the consequences for the science and engineering industries could be catastrophic. The company that owned the chemical plant in Bhopal, India — whose destruction killed as many as 16,000 people — claims that the tragedy was caused by sabotage. The $4.7 trillion global chemical industry is essential for products that contribute measurably to the quality of life worldwide. The steps recommended in this article will help address the critical hardening of operational technology against ill consequences from neglect and potential bad actors.
Manufacturing is worth nearly $8 trillion in revenue for the United States and over $44 trillion in production value worldwide. COVID has shifted more of this industry’s center of mass towards the US, as a recent ABB survey revealed that 70% of American businesses are planning to move production closer to home. Nearshoring initiatives are pushing manufacturers to invest in OT to boost efficiency and cut costs in new installations — and record-breaking levels of cybercrime in the industry are pushing them to invest in innovative OT security technology.
The increasing use of OT technologies within utilities and civil infrastructure like water, waste processing, and traffic control has significantly improved operational efficiency — while opening them up to cyber-attacks. A recent survey of 1,700 utility security professionals by Siemens and the Ponemon Institute revealed that only 31% had high confidence in their response readiness. For these critical service providers, improving their OT security is becoming a top priority.
Operational Technology Requires Advanced Security
As the rapid expansion of the operational technology security market shows, having the proper precautions in place is a top priority for OT professionals across all industries. Providing network security for different operational technology markets is challenging, but the right security technologies and partners streamline the process significantly while ensuring that you are protected against malicious attacks. To learn more about the most important aspects of OT security to help you avoid costly mistakes, contact one of our experts at Byos.