The Cyber security industry has witnessed consolidation of business with major cyber security companies announcing acquisitions of their rivals this fiscal. Whether it is Symantec’s acquisition of Blue Coat acquisition or Avast Software’s announcement to buy AVG Technologies, it seems that security enterprises are acquiring their direct competitors other small security enterprises to become more powerful in the industry. While this trend is quite visible in the industry, enterprises with different domain expertise are also contemplating to explore the booming cyber security business. Cisco Systems, which is known for its collaboration services is building its strengths in the cyber security space.
The increased emphasis on security and data protection is reflected in the growth and expected growth of the cyber security market in recent years. According to research firm Markets and Markets, the cyber security industry will balloon from a $160-billion business today to $170 billion in 2020. There is a great potential for Cisco to explore this business segment. Though security is currently a small part of Cisco’s overall business, it is on a rapid growth track.
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The company’s security division reportedly posted a 17 percent year-over-year sales jump in its 2016 third quarter, which ended April 30, following an 11 percent rise in the preceding quarter. Company’s recent strategic acquisitions are also driving sales growth. Cisco announced $293-million CloudLock acquisition deal last month. Similar acquisitions in the past couple of years included ThreatGRID, OpenDNS and Lancope.
The company recently announced six new cloud-based services and solutions as part of its security portfolio. Cisco has adopted this strategy as well. To bridge the cybersecurity skills gap, Cisco has also introduced a $10 million global cybersecurity scholarship program.
As the cyber security market has matured, most companies in the space have begun to transition away from product offerings and instead towards service revenue or “software as a service” (SaaS). Cisco still gets the bulk of its revenue by selling network switches and routers. These are slower-growing operations, but they give the company a solid foundation from which to expand into new markets. Cisco is also one of the leading players in collaboration technology, including videoconferencing, content sharing across a range of devices and managing call centers. Now the company has enhanced focus in the cyber security industry with a dedicated effort to grow in this space. Cisco Systems have benefitted from its cyber security strategy and is expected to continue to benefit from the widespread adoption of cyber security.