With a rapid increase in cybersecurity threats globally, several organizations are taking strong initiatives to counter the same. International Business Machines Corporation (IBM - Free Report) recently announced collaboration with City of Los Angeles and the LA Cyber Lab to combat against cybercrime.
As part of the agreement, IBM will create a new free threat sharing platform in collaboration with LA Cyber Lab for Los Angeles to counter frauds and other cyber attacks. The latest platform called the LA Cyber Threat Intelligence Sharing Platform or TISP is expected to result in a powerful solution, which will address the growing concern regarding hacking. The system will also have a mobile app, which can be utilized by local businesses to share suspicious emails and threats, thereby allowing the community to use the information and beef up their cyber defenses.
The collaboration is expected to strengthen the technical capability of IBM’s security lab, which is primarily focused on developing solutions that enhance mobile and application security. This aids in effectively countering fraud and detects malware.
To mention, both the LA Cyber Lab Cyber TISP and the LA Cyber Lab Mobile Appjoins the global network of IBM X-Force Command Centers, which combats data breaches and other cyber threats. Notably, clients’ security data will be managed by IBM’s workforce. This initiative will accelerate reporting of threats, which in turn will minimize its impact.
Per a report from MarketsandMarkets, the global market for cybersecurity solutions is expected to see a CAGR of 10.2% between 2018 and 2023 and to reach $248.26 billion by 2023.
Another report from MarketsandMarkets shows that the global threat intelligence market is anticipated to hit $12.9 billion by 2023 at a CAGR of 19.7% between 2018 and 2023.
We believe IBM is well poised to capitalize on this demand driven by this deal and its other initiatives..
IBM in Cyber and Cloud Security
The company’s AI platform IBM Watson, its emerging Blockchain technology and expanding security products is aiding it in proliferating the market.
Notably, the recent cyber-attack by the ransomware, Wannacry, has increased demand for security products. IBM’s broad product portfolio and expanding international footprint positions it well to capitalize on the demand.
Per MarketsandMarkets, IT security spending is expected to hit $170 billion by 2020 at a CAGR of 9.8%. The research firm also noted that revenues from the cloud security market will increase from $4.09 billion in 2017 to $12.73 billion by 2022 at a CAGR of 25.5%.
The Cloud & Cognitive Software segment’s revenues-external improved 5.4% year over year (on cc basis) to $5.6 billion in second-quarter 2019. Segmental revenues pertaining to Cloud improved 8%. Cloud as-a-service revenue annual run rate was $2.1 billion.
Revenues from Cognitive Applications were up 5% year over year, driven by security, health, supply chain and weather. Security growth was backed by offerings in orchestration, data security and endpoint management.
Further, robust sales of Resilient and QRadar, which address areas like endpoint protection, incident response and security intelligence, were other positives.
The latest collaboration is expected to boost the numbers further.
Other tech giants have also taken note of the prospects and are making every effort to bolster presence in this space. However, the market behemoths are leaving no opportunity to flex their muscles, which in turn is intensifying the competition.
Companies like Symantec Corporation , Splunk (SPLK - Free Report) and Qualys (QLYS - Free Report) , to name a few, have already forayed into the market with their security information and event management (SIEM) software.
Further, Alphabet’s foray with Backstory is likely to intensify the competition.
We therefore believe that IBM’s focus on product innovations, buyouts and strategic partnerships position it well to withstand the competitive environment.
IBM currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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