Key value drivers in the Cyber Security services market

The cyber security market is growing rapidly, driven by more regular and more sophisticated cyber attacks. The financial and reputational cost of these cyber attacks is higher than ever before. This has made cyber security a top-priority board issue, with increasing cyber security budgets driving demand for products and services.

An ever-changing threat landscape, with increasing attack surfaces and new attack vectors, is driving continual disruption in the cyber security market. Despite this changing environment, we have identified some consistent principles that are fundamental to driving value.

High-value services
Red teaming not just penetration testing; managed detection and response not just managed services.

End markets
Strong exposure to blue-chip clients in systemically important and rapidly growing end markets, such as financial institutions, telecoms, public sector and government, energy, etc.

Recurring revenue
Subscription-style, cyber-security-as-a-service revenues rather than one-off consulting projects. Recurring revenue drives value by creating predictability, a stable base for growth and reducing customer acquisition costs.

Forward visibility
Orderbook of sticky, long-term contracts with predictable revenue that extends beyond a 3-6 month forward period and a pipeline of prospects with an empirical conversion prediction.

Use of technology to drive operational productivity and overcome labour intensity to enable easier rapid scaling.

High-quality employee base with low churn and a track record of successfully recruiting new talent in the notoriously challenging cyber security labour market.

Scale and profitability
Platform of scale with a track record of converting sustainable revenue growth into profits. Scale can be achieved more quickly with a recurring revenue base and a technology-enabled business model.

Resilient earnings underpinned by non-discretionary services that will not be “turned off” during a downturn as client become cost conscious.

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