2023 was a year marked by continued economic uncertainty, increasingly escalating threats, and the emergence of new geopolitical conflicts that raised national and cybersecurity concerns. Yet, one thing is certain: the new threats, continued innovation, and ongoing growth within the cyber ecosystem aren’t slowing down any time soon.
In the NightVision State of Cyber 2024 event, NightDragon took a 360-degree view of the state of the industry. We looked at what products are really being adopted by cybersecurity buyers, what financial analysts are watching around the IPO market, where VC investors see opportunity, what to watch for around the next frontier of AI innovation, and more.
NightDragon CEO Dave DeWalt moderated the event and speakers included:
Leading Wall Street Perspectives –
- Fatima Boolani, Co-Head US Software Equity Research, Citi
- Rob Owens, Co-Head Technology Research, Piper Sandler
- Brad Zelnick, Managing Director, Deutsche Bank
Leading CISO Perspectives –
- Brad Jones, CISO, Snowflake
- Vijaya Kaza, CSO, Head of Engineering for Trust and Safety, AirBnB
- Brian Cincera, SVP, CISO and Head of Infrastructure and Operations, Pfizer
Leading AI Perspectives –
- Rodney W. Zemmel, Senior Partner and Global Leader of McKinsey’s Digital Practice
- Bartley Richardson, Director Cybersecurity Engineering and R&D, NVIDIA
Leading Venture Capital Investor Perspectives –
- Yoav Leitersdorf, Managing Partner, YL Ventures
- Alberto Yépez, Managing Director, Forgepoint Capital
- Mark Hatfield, General Partner, TenEleven Ventures
Leading Global Go-to-Market Perspectives –
- Jim Kavanaugh, Co-Founder and CEO, WWT
- Sean Kerins, President and CEO, ARROW
- Jesper Trolle, CEO, Exclusive Networks
The full recordings of each panel can be found below. Here are some key takeaways from the industry leaders on where the cybersecurity industry is headed in 2024 and beyond:
- Rise of SecureTech – As threats around the world continue to grow, geopolitical threats rise, new information warfare concerns emerge and more, we’re seeing a rapidly growing market for SecureTech, said NightDragon CEO Dave DeWalt. This market is expected to reach $517B by 2025, including cybersecurity, safety, security and privacy technologies that are fusing together with other domains such as quantum, supply chain, physical and more.
- Best of Suite is King – The cyber market swings between preference of best of breed and best of suite every few years. Right now, industry analysts and CISOs said, you’re seeing a strong preference for best of suite and platform solutions as companies look to simplify their stacks and have more consolidated platforms. This is driving new waves of M&A in the market, particularly amongst cloud and cybersecurity titans looking to add to their platforms or technology titans looking to break further into the space from other sectors.
- Cybersecurity has Become Mainstream – Cybersecurity isn’t a backroom project – it’s gone mainstream, industry analysts said. “In the course of the last decade and really half decade, cybersecurity has become a mainstream problem priority,” said Fatima Boolani, Co-Head US Software Equity Research, Citi. This is a significant contributing factor to why many cyber companies are seeing a much bigger market capture today, she said.
- Cybersecurity is a Board of Directors Issue – To build on the idea of cybersecurity becoming mainstream, it is also increasingly becoming a topic at the board of directors’ level. This is being driven by increasing threats manifesting significant impacts on businesses around the world, as well as increasing regulation from the Securities and Exchange Commission (SEC) and other bodies. The challenge? Many boards face a lack of cyber or technology education or expertise in their ranks, which can make it difficult to advance in this area.
- Budgets on the Rise – CISOs agreed that budgets would continue to rise across the industry, echoing findings from a recent NightDragon survey that found 80% of CISOs expected budgets to rise in 2024. At the same time, CISOs are also looking to simplify their stacks and evaluate existing investments to determine if they are delivering the value promised, said Vijaya Kaza, CSO, Head of Engineering for Trust and Safety, AirBnB. Automation is also another key investment area to make the most of budget and team capabilities, Brian Cincera, CISO at Pfizer, added.
- Basic Cyber Hygiene Reigns Supreme – While there was talk of many new vulnerabilities last year, the reality is that most big data breaches still happen from a basic lack of cyber hygiene, such as social engineering attacks or third-party risk, CISOs said. “There’s still a huge amount of effort that needs to go into nailing the basics in the industry,” said Brad Jones, CISO at Snowflake.
- IPO Markets Could Open Up in 2024 – The cybersecurity industry hasn’t seen a pure-play Initial Public Offering (IPO) since ForgeRock in 2021 – but that could change. While it may not be until the latter half of the year, industry analysts said they are optimistic that the IPO window will begin to open back up in 2024. That said, they said the bar to go public is higher than before, as investors became more discerning and are looking for specific growth and margin profiles, as well as a vision towards a platform.
- M&A Expected – Panelists from multiple perspectives predicted a significant rise of M&A in 2024, particularly in the latter half of the year. Driving this are factors such as a strong amount of cash on titan company balance sheets, a need for continued expansion around innovative areas like AI, and a shift towards a best of suite approach by buyers, panelists said.
- CISOs Experimenting with AI Technologies – CISOs said they are actively evaluating AI technologies to determine use cases that are most relevant and valuable for their organizations. “With AI, the biggest thing you can do as a company is to provide a playground for your employees to use it in a safe manner, rather than them going out and exposing your data and services elsewhere. Embrace it, don’t stop it.” However, they said they are also paying close attention to AI security tools, with specific attention to securing data models. Brad Jones, CISO at Snowflake, said
- AI Needs to Evolve from Pilot to Enterprise Scale – Ideas and pilots have quickly spun up around AI. However, AI experts said the true value will come when the market matures, and you see a more focused approach to driving enterprise scale for these technologies. “It’s like we’ve given everybody super refined racehorses and most people are still figuring out how to put their riding boots on,” said Rodney Zemmel, Senior Partner and Global Leader of McKinsey’s Digital Practice. “I think we’re going to see that move in 2024.” They said they see strong applications around customer service, getting precise and concise answers to questions, coding, creative content, and aiding in cybersecurity incident response.
- Seed Investment Saw Strong Traction in 2023 – VC leaders said, while overall VC investment was down, they did see many investments occurring at the seed level. This is reflected in the overall market stats, with seed deals accounting for 42% of all deals 2023, according to Pinpoint Search Group. “This is probably the best time to start a company,” said Alberto Yépez, Managing Director, Forgepoint Capital. That growth will ripple across late-stage and growth companies as these new innovators grow, the panelists said.
- Channel More Important Than Ever – As companies realize the essential nature of expanding innovation and keeping pace with cyber threats, channel partners are becoming more important than ever, go-to-market leaders said. “The channel is becoming increasingly important,” Arrow CEO Sean Kerins said, saying that partners can help businesses navigate the complex landscape to mitigate risk. Jesper Trolle, CEO of Exclusive Networks, agreed, saying, “Cyber has to do with trust… The trust in the relationships that the channel holds with these customers is absolutely key for the vendors and hence why they use this channel.” Additionally, partners are playing an increasing role in driving innovation directly, said WWT CEO Jim Kavanaugh.
- Up and Coming Categories for 2024 – Across the panels, leaders shared emerging categories that they expected to have big years in 2024. These categories included Internet of Things, artificial intelligence, identity, cyber skill training, Generative AI, software supply chain security, cyber resilience, misinformation prevention, SOC automation, and quantum.
To see our full list of other upcoming events, check out our NightDragon Events page.
