Biden’s cybersecurity summit to spur investment: Zscaler executive
22:36, 27 August 2021
US president Joe Biden’s cybersecurity summit will spur investment at home and around the world in technology that deters cyberattacks, says an executive with a leading cloud-computing security company.
Stephen Kovac, chief compliance officer with San Jose-based Zscaler, said on Friday, 27 August that his company and others are well-positioned to benefit from the summit that Biden held on Wednesday, 25 August.
Participants included leading tech company CEOs, their counterparts from the financial, energy and water, and insurance sectors, as well as educators.
“(The Biden administration) are trying to bring in the private sector, they're trying to bring in modernisation and forward thinking, and really transform, and I think that they're off to a good start,” said Kovac, who is based in Washington, D.C.
Zscaler conducts business with private and public-sector customers in 185 countries. With the company’s latest quarterly earnings to be reported in early September, Kovac was reluctant to discuss Zscaler’s growth projection in relation to the summit and Biden’s earlier cybersecurity executive order, which calls for more federal investment.
Opportunity for growth anticipated
“From my standpoint, when we look at global government, as well as commercial and US government (business), there's a tremendous opportunity for us to grow if we execute,” said Kovac, adding that demand for cybersecurity services is strong.
He noted that Biden, pending approval from Congress, will devote $500m to the Technology Modernisation Fund and $750m to nine federal agencies to prevent cyberattacks in the wake of the hack on software firm SolarWinds.
According to FCW magazine, the White House is seeking $9.8bn in cybersecurity funding. Kovac said the Biden administration is talking about cybersecurity much more often than former president Donald Trump’s administration did, and the industry has never seen such dollar amounts pledged.
“There's plenty of money to be spent and that's why it's important for (the Biden administration) to know how and what to spend it on,” said Kovac in an interview with Capital.com.
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Gartner forecasts large investment increase
Kovac expects cybersecurity attacks and prevention to be tied to cloud-based computing. Gartner has forecasted that global end-user spending on public cloud services will grow 23.1% in 2021 to total $332.3bn, up from $270 billion in 2020. Meanwhile, Fortune Business Insights has estimated that the global cloud market will grow to $791.48bn by 2028.
The summit involved CEOs from major tech companies like Apple, Microsoft and Amazon, as well as leaders from other industries and the education sector. Anticipating future summits, Kovac called on the White House to bring in cybersecurity industry “innovators and disruptors.”
He confirmed that Zscaler plans to expand as state and local governments ramp up their cybersecurity investments. He also expects increased government investment to spur more private expenditures.
“I think all companies would say government is a great space, not only because they spend money in the space and they're committed to it, but you need opportunities and you see things that you wouldn't see normally in a commercial enterprise and you adjust to that,” he said.
“And when you adjust, you learn; and when you learn, you're better.”
He hopes the summit and ensuing investment will help the industry recruit more talent. According to a senior US administration official, the country has 500,000 unfilled cybersecurity jobs.
Kovac said cybersecurity staffing is the “No. 1 challenger” for public and private entities alike. But increased government investment and involvement gives the sector a “cool factor” that did not exist before.
“Cybersecurity is no longer the geeks at their computers writing code,” he said. “Now, you see it at the forefront with (tech company executives) shaking hands with the president, and the top news story of the day is about cybersecurity. It's become very chic in the last five years, and every year it just becomes the cool kind of thing, or it thing, to do.”
Kovac expects other countries to follow the US example on cybersecurity compliance standards and beef up investment.
"It will have global scope, it will have global reach because, really, the US does set the bar,” said Kovac.
Wedbush Securities analyst Daniel Ives has identified Zscaler as one of the companies that will benefit from the anticipated increase in US federal cybersecurity spending.
Unsure of global impact
But Jonathan Simnett, a director with London-based tech company mergers and acquisitions firm Hampleton Partners, questioned whether Biden’s summit will have a global effect.
“It appears that the summit has a domestic focus and that risks having little international influence outside of the US – other than potentially through any action that multinationals might take outside of the US as a result of changes they have instituted in the US,” Simnett told Capital.com.
“But, overall, my view would be that international investment in security companies will carry on regardless, as the same threats, opportunities and solutions exist right around the globe.”
Simnett pointed to a number of large international cybersecurity-firm mergers and acquisitions that have occurred in recent months.
Cybersecurity companies are in high demand, mostly in countries like the US, UK and Israel, where venture capital is plentiful
Big investors
In conjunction with the summit, Google announced it will invest $10bn over the next five years to expand cybersecurity efforts known as zero-trust programs, help secure the software supply chain, and enhance open-source data security.
Microsoft announced that it will invest $20bn over the next five years in cybersecurity-related initiatives. The company also made available $150m in technical services designed to help federal, state, and local governments with upgrading security protection.
Microsoft and other participants also announced programs designed to boost cybersecurity training.
But, noting that talent shortages are also prevalent in other countries, Simnett said multinationals that participated in the summit should focus on their global “cybersecurity stance and systems” – not just their US-based needs.