Today’s new digital reality has made investors more focused than ever on capitalising on the rush to the cloud and investing in cybersecurity.

The rapid acceleration of technology-led trends due to Covid-19 has impacted companies of all types and sizes. Cloud adoption is a clear example of this; data from Synergy Research Group shows global spending by enterprises on cloud infrastructure services hit $42 billion in the second quarter 2021. This represented an increase of $2.7 billion from the previous quarter and was 39% higher than the same period 12 months earlier.

At the same time, the far-reaching scale and scope of digitalisation has brought with it pressing cyber security threats.

Research in May and June 2021, for instance, highlighted the extent of potential damage from cyber attacks, along with the plans among organisations around the world to increase security budgets to fend off further impacts. According to the “CSO Global Intelligence Report: The State of Cybersecurity in 2021”, which surveyed over 2,700 security, IT, and business professionals globally:

  • Nearly half of those attacked reported seeing economic damage, a loss of productivity and theft of personally identifiable information
  • 62% of respondents anticipated that a financially driven attack on their organisation, such as ransomware, will occur over the next 12 months
  • 71% of organisations expect to increase their security budget this year – with attack prevention the top priority, followed by cloud security, data privacy and network security

Against this backdrop, keeping up-to-date with market trends is essential for those investors eyeing exposure to the cyber security and cloud computing themes.

To explore the quickly-emerging opportunities in this space – and how to access them – AsianInvestor and Nasdaq hosted a webinar, with insights from two industry specialists:

  • Brian Comiskey, senior manager of industry intelligence, Consumer Technology Association
  • Gregg Guerin, senior product specialist, First Trust Global Portfolios

Read some of the takeaways below and watch the on-demand version here

Further information on the relevant Nasdaq indexes:


DISCUSSION HIGHLIGHTS

Implications of the acceleration of digitalisation on cybersecurity and the cloud

Take-aways

  • Examples of the pace of digital adoption as a result of the pandemic have been notable in e-commerce, tele-health, video streaming and social gaming, and remote learning
  • These trends have also led to rapid growth in cyber attacks, with an unknown number of cyber threats hidden inside the cloud. For example, from January to September 2020, US cloud security firm Zscaler detected 6.6 billion threats within its own cloud
  • Gartner has predicted that worldwide spending on public cloud services will reach $400 billion in 2022, from $270 billion last year

Insights

Brian Comiskey
“During the past 12 to 18 months, we have seen significant stress-testing of the cloud, and the internet in general, and growing cybersecurity challenges have emerged.”

 



Gregg Guerin
“Companies are now forced to pay cybersecurity and cloud providers to protect their data.... It’s like building a really expensive house without adding an alarm system. So, if we are willing to put our crucial data in the cloud, we must make sure it is secure.”

Key dynamics and considerations in relation to new digital trends

Take-aways

  • From an efficiency context, the cloud creates the ability for companies to offer and leverage global access, plus it reduces their reliance on physical computing power and saves significant costs
  • Common challenges for companies in achieving cloud success include general security concerns, data loss, lack of budget, regulatory hurdles due to differing standards globally, and a lack of staff

Insights

Brian Comiskey
”Companies are now more inclined to increase their security budget, but they are trying to be smart about their spending.”

Gregg Guerin
“I can only envisage legislation that requires more cybersecurity. In terms of the cloud, regulation will at some point be passed that increases barriers to entry.”

Brian Comiskey
“The efficiencies from the cloud are so compelling that it would be a step backwards to reverse this trend.”

Top investment themes within cybersecurity and cloud computing

Take-aways

  • More and more companies will roll out solutions along the lines of “zero trust” principles
  • There will be an intersection between cybersecurity and artificial intelligence / machine learning
  • Investment is growing significantly in thematics such as specialised software firms, hardware providers, middleware companies and anti-virus solutions – but a category often overlooked is ‘expertise’, delivered by managed security service providers in a consulting capacity
  • Cybersecurity and cloud computing are well-positioned for an inflationary environment

Insights

Gregg Guerin
“Within the cloud, there is a readily identifiable market segmentation – infrastructure, platform and software-as-a-service.”

Gregg Guerin
“I don’t think inflation will eat into the profits of companies that provide digital products or services. That will give these providers an advantage [for investors].”


Brian Comiskey
“The threat ecosystem has a lot more depth to it than most people see in the media. This requires a lot of solutions from a variety of providers to address both niche concerns as well as holistic cyber security challenges.”