Spain Cybersecurity Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Spain Cybersecurity Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Spanish cybersecurity market is estimated to register a CAGR of 7.2% for the forecast period 2022-2027. The country is undergoing the digitalization of different business and operational sectors, exposing more entities to data breaches and cyber-attacks, creating demand for more services in the market. The companies are coming forward with new security offerings to provide a secure and protected experience.

Key Highlights

• Like the rest of the world, Spain is undergoing digitalization, following the global Industry 4.0 trends. The industries and different business sectors are integrating with digital platforms, expanding their reach through the internet. This also makes many aspects of the supply chain vulnerable, creating demand for data protection and cybersecurity from the rampant cyber attacks reported in the country.
• According to Kaspersky's report on mobile malware, 1.55 percent of the Spanish users were attacked by mobile banking trojans, compared to 0.71 % of the users hit by the attacks in Turkey. Also, according to Sophos State of Ransomware Report 2021, 44 % of the organizations in Spain were hit by ransomware attacks 2021, which is more than the global average of 37 %. These statistics demand huge scope in the market for the companies to avail of more cybersecurity solutions.
• However, the market faces a scarcity of skilled workforce to tackle the cybersecurity requirements and growth. The heavy influx of bigger multinational business companies in the country takes away potential cybersecurity talent, creating a deficit of human capital for the rest of the potential market. According to ISC's 2021 Cybersecurity Workforce Study, the number of cybersecurity professionals in Spain accounted for 124,226, compared to 1,142,462 professionals in the US and about 51,349 in Brazil. Talent development is the need of the hour to match the increasing demand and cyber attacks.
• The COVID-19 pandemic witnessed an increase in the online traffic and digital participation of the country's population, increasing the risks of cyber-attacks and data breaches. According to the Spanish National Institute of Cybersecurity, the government has experienced more than 150,000 cyber attacks since the pandemic's beginning. This requires some serious measures for cybersecurity, creating considerable demands in the market for new entrants and flourishment of the existing players.

Key Market TrendsE-Commerce and Digitalization to Drive the Market

• The increasing shifting of businesses of different sizes online calls for cybersecurity measures widely. The growing preference for the Spanish population to prefer online media for various purposes, utilizing the increasing market of e-commerce space, also comes with vulnerabilities like data breaches and cybersecurity threats, targeting the user data and other sensitive information. Hence, the growing e-commerce will drive the cybersecurity market in Spain and indicates its increasing demand in the market.
• Several companies are working to enhance the data handling and storage capabilities to strengthen the infrastructure, also ensuring strong data security through collaborations. For instance, in February 2022, Microsoft and NTT Data partnered to offer confidential hybrid solutions and services to migrate and optimize IT resources to the Microsoft Cloud. NTT DATA's first Innovation Hub in Barcelona is based on Microsoft technology, with the hybrid solutions committed to meeting data sovereignty and residency requirements of regulated companies and public administrations.
• Such developments also comply with the latest legal requirements, helping businesses extend operations under the law. These requirements are the building grounds for the platforms to tackle the increasing traffic indicated as a result of the rising online expenditure of the Spanish population. For instance, according to PPRO, the e-commerce expenditure as a share of the total GDP of Spain accounted for 4.7% in 2021, compared to 3.5% in the Netherlands, 2.8% in Germany, and similarly more than many other European countries.
• The government schemes are boosting businesses' transitions on digital platforms through new strategies and investments, creating space for cybersecurity. For instance, in December 2021, according to lamoncloa.gob.es, under the Digital Spain Agenda 2025, the Ministry for Economic Affairs and Transformation announced allocating EUR 8.8.billion through the European funds of the Recovery, Transformation, and Resilience Plan. The funds will be targeted for action areas, including the digitalization of SMEs, cybersecurity, 5G, digital skills, and others.
• Other schemes like the Digital Kit for supporting the digitalization of SMEs, launched by the Spanish government, motivate SMEs and freelancers to plan and execute digital transformation. Thus, the growing digitalization and e-commerce leveraging the latest technological alternatives available make many data and informatics vulnerable to cyberattacks, creating a parallel demand for cybersecurity in Spain.

Government Sector to Dominate the Market Growth

• Information and data are critical for safeguarding sensitive strategies and data in any government, and Spain is no different. However, the cybersecurity measures need to be upscaled to tackle the existing infrastructure and strengthen the internal operations. For instance, in April 2022, according to The Citizen Lab associated with the University of Toronto, a group of researchers indicated that at least 65 individuals were targeted or infected with mercenary spyware, including Pegasus and Candiru.
• The incidents of data breaches of highly decorated and important personnel of the country signifies how the prevailing political complexity targets the authoritative personnel, questioning their cybersecurity measures. For instance, in May 2022, according to theguardian.com, The Spanish Prime Minister's phone was targeted for Pegasus spyware infection in May 2021 and June 2021, and the Spanish defense minister's phone was targeted in June 2021. Since the spyware was available only to specialized government agencies, the matter was under investigation.
• However, the Spanish government is taking stringent measures to strengthen cybersecurity in the country by introducing new regulations and governing bodies to regulate the implementation accordingly. For instance, in March 2022, according to lamoncloa.gob.es, the Spanish government approved an investment of EUR 1.2 billion, with the transposition into national legislation of European regulations on security and integrity for the 5G deployment. This measure was taken in response to the arising risk in the geopolitical situation amidst the Ukraine-Russia war.
• Such measures ensure long-term strength for the new technologies like 5G to enter the country with much more assurance in cybersecurity. This further extends to laws dedicated to securing the networking infrastructure in Spain. For instance, in April 2022, according to lamoncloa.gob.es, the lower house of the Parliament approved the Royal Decree-Law on 5G Cybersecurity, or the 5G Cybersecurity law, stating specific cybersecurity requirements for the introduction and operations of 5G networks. The law also incorporates the toolbox agreed by the Member States of the European Union into the Spanish legal framework.
• The ongoing critical incidents of spyware and geopolitical unrest, along with the new regulations, create considerable scope for the companies offering cybersecurity-as-a-service to public and private companies and their subsidiaries for a safer digital operation. This boosts the market, inviting more service providers to strengthen the ecosystem by introducing different features to their services. This also creates more jobs and opportunities for cybersecurity professionals, helping address the challenge of a limited cybersecurity workforce in Spain.

Competitive Landscape

The Spanish cybersecurity market is highly consolidated, with a low concentration of major cybersecurity players. Many players compete in the market under intense competition to cater to the client companies' security needs. The companies partner with other service providers to offer innovative cybersecurity solutions, exchanging technologies that strengthen existing services and launch new services for different end-users. Strategic acquisitions are another medium for upgrading the technological capabilities in cybersecurity offered by the companies.

• June 2022 - Telefónica Tech, and Cisco Systems Inc., announced a strategic partnership for innovative global managed service, including security, SD-WAN, and Secure Access Service Edge (SASE) architectures. The two companies will jointly develop a broad portfolio of managed services based on Cisco SD-WAN, Security, and SASE solutions in the markets, including the Spanish company. The agreement will witness the creation of new technical, commercial, and operational capabilities based on the expertise and technologies shared by both companies.
• November 2021 - Indra incorporated a new capability into its toll back office system to record transactions on a blockchain through its Mova Collect solutions. The solution would offer operators and concessionaires a more robust and reliable solution, allowing them to record any operation quickly and efficiently, increasing data traceability, transparency, and integrity. Applying the new blockchain to the transactions and processes in the back office systems of a toll would help reduce conflicts between the different participants by protecting against possible cyber-attacks and possible disagreements and facilitating settlement and auditing tasks.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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