Coherent Market Insights

Operational Technology Security Market to Surpass US$ 57.51 Bn by 2031

Operational Technology Security Market to Surpass US$ 57.51 Bn by 2031 - Coherent Market Insights

Publish In: Jun 13, 2024

The Operational Technology Security Market is estimated to be valued at USD 20.18 Bn in 2024, exhibiting a CAGR of 16.1% over the forecast period (2024-2031). The market is witnessing significant growth due to increasing digital transformation initiatives across various industries and growing adoption of technologies such as Internet of Things (IoT). Furthermore, rising incidents of cyberattacks on OT systems are compelling enterprises to invest more in OT security solutions.

Market Dynamics:

Market Drivers:

Increasing digital transformation and rising IoT adoption

As industries increasingly adopt smart devices and integrate IT and OT infrastructures for greater efficiency and data-driven decision making, the attack surface is expanding rapidly. According to some reports, over 25% of organizations suffered OT security breaches in the last year owing to unprotected or poorly secured IoT and IIoT devices. Additionally, many legacy devices lack adequate security controls making networks highly vulnerable. This has pushed organizations to invest more in technologies that can provide visibility, threat detection, access control, and incident response across physical assets. Comprehensive OT security platforms are helping industries monitor all endpoints, enforce policies, detect anomalies, and respond to threats in real-time. Growing industrial automation also calls for robust security frameworks that can support secure connectivity of new devices

Increasing Instances of Cyber Attacks on Industrial Control Systems

Over the past few years, there has been a significant increase in the number of cyber-attacks targeting industrial control systems and operational technologies. High-profile incidents such as Stuxnet, Triton, and Industroyer malware have caused major disruptions and financial losses for organizations. These threats underline how vulnerabilities in OT environments can be exploited by attackers to cause physical damage and safety issues. As critical infrastructures like power grids, water treatment plants, and manufacturing facilities increasingly rely on network-connected devices, it has become crucial for companies to implement robust security measures. The growing awareness about OT security breaches is compelling industrial operators to invest in next-generation solutions that can detect threats early and prevent disruptions. Many organizations are rolling out industrial control system-specific firewalls, antivirus software, anomaly detection tools, and identity/access management to safeguard their production assets and environments. This rising demand for tailored OT security offerings is a key driver propelling the market growth.

Market Restraints:

Stringent Compliance Regulations are Forcing Companies to Adopt Compliant OT Security Practices

Regulatory bodies across different industry verticals have introduced strict compliance mandates regarding the cybersecurity of industrial control systems. Regulations such as NERC CIP, ISO 27001, and NIST framework require utilities, manufacturers, and other operators to have appropriate security controls in place and demonstrate compliance. Non-adherence can result in heavy fines and penalties. To meet these compliance standards, organizations have to continually monitor and assess their OT environments for vulnerabilities, swiftly respond to incidents, perform risk assessments, and implement security best practices. While compliance involves additional costs and resource investments, non-compliance poses even greater financial and legal risks. Therefore, regulatory pressures are compelling companies to deploy specialized OT security tools, services and practices to achieve compliance and avoid non-compliance fees. This compliance driver is significantly contributing to the expansion of the operational technology security market.

Budgetary Constraints of Industrial Operators limit Security Investments

Despite cyber risks, many industrial organizations continue to underinvest in OT security due to budget limitations. Upgrading outdated systems and deploying new security solutions requires considerable capital expenditure which compete with other priorities. Industrial operators have thin profit margins and cannot easily absorb additional security costs which do not have direct impact on production outputs. There is also a lack of top management support and awareness about less visible but critical OT security needs. Limited OT security budgets restrain companies from procuring necessary tools and capabilities or hiring skilled professionals for security operation centers. Legacy systems also cannot support newer security features which call for infrastructure overhauls. Such budgetary challenges pose a major restraint slowing the market growth particularly among small and medium industrial firms.

Resistance to Change from Operational Staff hinders Security Adoption

Operational technology environments have traditionally not focused on cybersecurity given their physical, safety critical functions. Therefore, plant engineers and control system operators are often resistant to adopting new security processes, tools or changes in operational practices. They view security measures as unnecessary additions complicating plant workflows. There are also concerns that security solutions can interfere with real-time production monitoring needs. Any change in their systems or operations requires extensive validation which increases costs and timelines. Overcoming such reluctance to change from frontline staff remains a challenge for many industrial firms. Addressing behavioral aspects through extensive stakeholder engagement and change management is needed but increases resource needs. This staff resistance hinders expediting security deployments and m

Market opportunities:

Emerging Technologies provide new Avenues for Growth

Rise of technologies such as IoT, cloud computing, AI, and Blockchain is opening up new opportunities for operational technology security vendors. Industrial assets are increasingly becoming IoT-enabled and cloud-connected which introduces more interconnectivity and remote access points prone to attacks. This wider attack surface necessitates innovative solutions leveraging AI/ML for continuous monitoring, anomaly detection and threat hunting. Blockchain offers advantages for supply chain security and integrity of systems/components procurement. There is growing necessity to secure data exchanges between IT and OT systems through specialized platforms. These evolving technology trends are allowing OT security players to roll out novel products enhancing capabilities across various stages of the security lifecycle from prevention to detection and response. They are also looking at offering managed security services hosted on the cloud. Overall, innovative tech-driven OT security offerings present promising growth prospects going forward.

Regulatory Push for Critical Infrastructure Modernization Boosts Security Spending

Many governments worldwide have launched initiatives to modernize aging critical national infrastructure through automation upgrades and digital transformation programs. For instance, smart grid and smart city projects are underway globally. While modernizing improves efficiencies, it also expands the cyberattack surface which needs to be.

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Key Developments:

  • In December 2023, Fortinet, a global leader in cybersecurity, unveiled new integrated solutions and services for operational technology (OT) security, distinguishing itself in the market. Addressing the increasing risks across OT environments, Fortinet offers purpose-built solutions that streamline security measures, minimize operational complexity, and enforce policies. These include the FortiSwitch Rugged 424F, FortiAP 432F access point, and FortiExtender Vehicle 211F wireless gateway, alongside updates to FortiOS, FortiAnalyzer, FortiNDR, FortiDeceptor, and FortiGuard OT Security Service.
  • In April 2023, FortiGate 7080F introduced an advanced lineup of next-generation firewalls (NGFWs) tailored for businesses. These innovative firewalls transcend traditional products, simplifying operations and consolidating security infrastructure.
  • In October 2022, Software AG partnered with G42 Cloud, a prominent U.A.E-based firm specializing in artificial intelligence and cloud computing, to empower organizations across industries in achieving cloud-hosted digital connectivity. By leveraging G42 Cloud's hosting and deployment capabilities, businesses can unlock new products, leverage actionable data, drive strategic decision-making, and enhance operational growth.

Key Market Players:

Key companies covered as a part of this study include ABB Ltd., Belden Inc., Check Point Software Technologies Ltd., Cisco Systems, Inc., Claroty Ltd., CyberX (acquired by Microsoft), Dragos Inc., FireEye, Inc., Fortinet, Inc., General Electric Company, Honeywell International Inc., IBM Corporation, McAfee, LLC, Nozomi Networks Inc., Palo Alto Networks, Inc., Rockwell Automation, Inc., Schneider Electric SE, Siemens AG, an dSymantec Corporation, Tenable, Inc. are the major players.

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