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The cyber insurance and cybersecurity markets are known for their buzzwords, which are often defined differently by various stakeholders. “Cyber warfare” is often used to describe attacks aiming at military or strategic impact, as opposed to hacks designed to steal money. A new market research report asserts this market represents app. $26.6 billion in spending today, growing at a 15% CAGR.
What Is Cyber Warfare?
The cyber warfare report from research provider Valuates Reports includes estimated spending involving state-sponsored cyber attacks, a core element in all definitions of cyber war. However, the report fails to provide a good definition of “cyber warfare,” an important lapse given the importance of the definition for both geopolitical reasons and, more immediately for those involved in cybsecurity insurance, the frequent exclusion of damages from “war” in cyber insurance coverage.
“An alarming rise in state-sponsored cyber intrusions has intensified demand for advanced cyber warfare systems. Governments across the globe are investing in cyber command units and digital espionage tools to both defend against and initiate cyber-attacks,” says the report. “These geopolitical threats compel countries to allocate more funding toward cybersecurity and warfare preparedness. The resulting arms race in cyberspace promotes investments in next-generation threat intelligence platforms, ethical hacking services, and red-teaming exercises, thereby expanding the overall market for cyber warfare technologies and services.”
The report notes that cyber warfare has become an “essential component of hybrid warfare, which blends conventional warfare with information operations, disinformation, and cyberattacks.” The responses include “(s)olutions-based offerings” such as “threat intelligence platforms, intrusion detection and prevention systems, endpoint security, deception technologies, and digital forensics tools. Organizations and governments are increasingly investing in integrated platforms that combine AI and analytics to detect anomalies and initiate countermeasures autonomously.”
Is Cyber Warfare Spending Really This High?
Challenges to estimating spending on cyber warfare include differentiating it from “normal” cybersecurity spending, a distinction not clearly made in the report, and the lack of visibility on spending by governments on “offensive” cyber operations. In Western countries offensive cyber capabilities and operations are often highly classified, with spending on them not revealed. In countries such as China, Russia, Iran and North Korea, cyber warfare may be conducted by hacker organizations associated with the regimes rather than acknowledged military or intelligence units, providing the adversary countries with deniability.
The report lacks detail on these issues, or primary sourcing of the cyber warfare spending that is discussed. All that said, there’s little doubt this is a massive and rapidly growing market.
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