Operational Technology (OT) Security Market

[437 Pages Report] MarketsandMarkets forecasts global Operational technology (OT) security to grow from USD 20.7 billion in 2024 to USD  44.9 billion by 2029 at a compound annual growth rate (CAGR) of 16.8% during the forecast period. Operational Technology (OT) employs hardware and software to oversee and manage physical processes and infrastructure. It covers systems controlling industrial equipment, utilities, and manufacturing plants. In the past, OT cybersecurity wasn't a concern since these systems weren't online. However, with increased connectivity, safeguarding OT from cyber threats is now crucial. With the convergence of OT and IT systems, OT systems are increasingly targeted by cyber-attacks. As industrial systems become more connected, they also become more vulnerable. The high cost of industrial equipment and the economic devastation that an attack could generate are critical factors for organizations looking to protect their industrial networks.

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Operational Technology Security Market Dynamics

Driver: Increasing threats on the OT environment

In recent years, the operational technology (OT) landscape has witnessed a profound transformation, with the convergence of IT (Information Technology) and OT systems opening up new avenues for efficiency and innovation. However, this convergence has also introduced unprecedented cybersecurity challenges as OT environments become increasingly interconnected and exposed to cyber threats. The escalating threat landscape targeting OT systems and critical infrastructure drives the OT security market. Historically isolated from the internet and conventional IT networks, OT environments are now vulnerable to various cyber threats, including malware, ransomware, phishing attacks, and targeted cyber-physical assaults. The proliferation of sophisticated cyber threats tailored to exploit vulnerabilities in OT systems poses significant risks to industrial operations, public safety, and economic stability. High-profile cyber incidents, such as the 2015 Ukraine power grid attack and the 2017 NotPetya ransomware outbreak, have underscored the real-world consequences of OT security breaches, including production disruptions, financial losses, and even physical damage.

Restraint: High procurement costs

Implementing robust OT security measures often requires substantial investments in financial resources, time, and expertise, which can deter some organizations from adopting comprehensive security solutions. The OT security standards require strong multi-factor authentication to ensure only authorized individuals have physical and logical access to critical assets. The complex nature of OT environments, with their diverse systems, legacy infrastructure, and industrial processes, contributes to the higher cost of OT security solutions. Organizations must consider network segmentation, access controls, intrusion detection systems, security monitoring, and incident response capabilities while setting up OT security systems. These requirements necessitate specialized hardware, software, and skilled personnel, all contributing to the overall procurement cost. SMEs have limited or no budget to secure critical infrastructure. The OT security landscape further consists of security solutions, such as IAM, DDoS mitigation, IDPS, encryption, and risk and compliance management, making it costly for enterprises. Organizations can explore various strategies to address the high procurement cost. These may include conducting cost-benefit analyses to assess security incidents' potential risks and impact, identifying the most critical assets or processes requiring protection, and prioritizing investments accordingly.

Opportunity: Increasing Adoption of AI-powered security solutions

The OT security market is ripe for disruption by AI-powered security solutions. These solutions offer a transformative advantage over traditional methods. By continuously analyzing massive amounts of data from OT systems, AI can automate threat detection and response, swiftly identifying and combating cyberattacks that might evade human vigilance. Additionally, AI can predict equipment failures through sensor data analysis, enabling preventative maintenance and minimizing costly downtime. Furthermore, AI grants enhanced security visibility, providing a comprehensive overview of an organization's OT landscape to pinpoint vulnerabilities and prioritize mitigation efforts. This holistic understanding is instrumental in fortifying defenses against cyber threats. As AI-powered security solutions mature and become more affordable, widespread adoption across various industries is expected. This presents a lucrative opportunity for vendors who can develop best-in-class solutions specifically tailored to the unique needs of the OT security market.

Challenges: Lack of trained security analysts

The biggest obstacle in industry infrastructure protection is the need for more security professionals. Industrial infrastructure sectors are powered by computer systems known as OT security that require trained cybersecurity professionals to protect large networks. According to The International Information System Security Certification Consortium (ISC)2, the global workforce gap increased by over 25% this year, and nearly 70% of organizations will have a worker shortage in 2023. The interconnectivity of OT security has also enlarged the workforce shortage. Countries such as Japan and the UK need help finding competent cybersecurity experts. Securing OT environments requires individuals who possess a deep understanding of both OT systems and cybersecurity principles. These professionals must be well-versed in the intricacies of industrial control systems, legacy infrastructure, and specialized protocols used in OT environments. Despite the growing digital marketplace expansion, the need for more security professionals to manage critical infrastructure is increasing. This leads to trained and skilled security professionals needing to operate OT security solutions effectively. Organizations can mitigate this challenge by investing in training and upskilling programs for their existing workforce. By providing comprehensive training on OT security principles, technologies, and best practices, organizations can develop a pool of skilled professionals capable of effectively analyzing and securing OT systems.

Operational Technology Security Market Ecosystem

By vertical, the Energy and Power segment is to account for a larger market size during the forecast period.

Power plants, renewable energy projects, and utilities are all included in the energy and power sector. In this industry, operational technology security is critical since compromise or disturbance can result in serious repercussions, such as infrastructure damage and power outages. OT security assists energy and power firms in addressing issues such as the requirement to provide a quick and effective method of restoring services following disruptions, monitor power system operation, and deal with the aging of grid infrastructures. The grid requires more system monitoring due to the addition of new renewable energy power sources. Attacks against thermal and hydroelectric power plants can cause fatalities and financial losses. The generation and transmission systems are managed, optimized, controlled, and watched over by OT systems. Thermal and hydropower plants provide most of the electricity and power used globally. Hydroelectric facilities also aid in controlling river flow and reducing the likelihood of floods and droughts. Cyberattacks can cause events like power outages and flooding. Hydropower and thermal plants are the usual settings for OT systems. When these technologies are used in thermal power plants, the generating and transmission systems are optimized, monitored, and controlled, which increases system efficiency. A practical and well-thought-out analytics and monitoring system aids in minimizing downtime brought on by faults or shutdowns. One of the biggest challenges facing security solution suppliers is the need for thermal and hydroelectric plants to integrate several solutions into a single platform.

By Offering, the Solution segment is to account for a larger market size during the forecast period

OT solutions facilitate automation across various industry sectors, offering a suite of security measures, including software, standalone tools, and integrated systems tailored to safeguard critical infrastructure and industrial control systems. These solutions address the unique challenges inherent in OT environments, encompassing SIEM, Asset Discovery & Management, Network Security, Vulnerability Management, IAM, and Data Security. The advantages of OT systems are evident, providing consistent quality assurance, standardized resource management, enhanced operational efficiency, and reduced labor costs, thereby optimizing production control and inventory management processes. Organizations face mounting pressure to secure both IT and OT teams, spurred by global cyber incidents such as the attacks on Oil India Limited and Hancock Health in 2022 and 2018, respectively. OT security not only fortifies perimeter defenses against unauthorized access but also strengthens overall endpoint security strategies. However, control systems, often proprietary and sourced from multiple vendors, pose challenges, compounded by legacy OT endpoints designed before cybersecurity concerns emerged. Examples include PLCS, SCADA systems, SISS, RTUS, IEDS, and HMIs. Despite deploying multiple security measures, breaches in SCADA/ICS remain prevalent, with serious ramifications including impacts on employee safety, financial stability, and operational efficiency, underscoring the imperative for heightened OT security adoption.

By deployment mode, the cloud segment to grow at a higher CAGR during the forecast period

Cloud-based OT security solutions offer a cost-effective way for businesses to boost their security measures, regardless of industry. With cloud deployment, companies can easily access and implement security tools without hefty on-site setups. This flexibility and scalability make cloud solutions particularly attractive, especially as more businesses embrace virtualization and cloud computing. The switch to cloud-based security cuts infrastructure costs and eliminates the need for constant IT maintenance, making it an appealing option for organizations and tiny to medium-sized enterprises (SMEs) with limited budgets. Cloud-based OT security solutions streamline access control management in physical and virtual environments, ensuring robust protection against ot cyber threats. As more businesses transition their IT operations to the cloud, the demand for cloud-based security solutions grows. This trend allows companies to focus on their core activities while leaving the complexities of IT security to specialized cloud services, driving market expansion.

By region, North America will have the largest market size during the forecast period.

North America holds a significant share of the global OT security market. The region has advanced economies with a solid industrial base and critical infrastructure. North America has also been responsive toward the latest technological advancements, such as integrating cloud and IoT with OT security solutions to establish a holistic secure access mechanism and enforce a security governance framework. Some regional businesses have focused on upgrading their OT environments by adding new devices. However, there is still broad scope for improvement as OT security teams, in many instances, are less empowered than their IT counterparts in the organization. OT security should get more attention if the same security team handles IT and OT security. Hackers or other adversarial entities can cause damage to the infrastructure due to such critical gaps in addressing OT cybersecurity.

Key Market Players

Fortinet (US), Trellix (US), Broadcom (US), Qualys (US), Cisco (US), Radiflow (US), Zscaler (US), Sophos (UK), Rapid7 (US), Nozomi Networks (US), and Kaspersky (Russia) are some of the leading OT security companies in the market.

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Scope of the Report

The study categorizes the Operational Technology market by offering, organization size, deployment mode, vertical, and region.

By Offering

• Solutions
  • SIEM (Security Information and Event Management)
  • Asset Discovery & Management
  • Network Security
  • Vulnerability Management
  • IAM (Identity and Access Management)
  • Data Security
  • Other Solutions
• Service

By Organization Size

• Large Enterprises
• Small and Medium-Sized Enterprises (SMEs)

By Deployment Mode

• Cloud
• On-Premises

Vertical

• Transportation & Logistics
• Manufacturing
• Energy and Power (Generation)
• Oil and Gas (Distribution)
• Other Verticals

Region

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• Latin America

Recent Development

• In December 2023, Fortinet, a global cybersecurity leader, announced new integrated operational technology (OT) security solutions and services, setting them apart in the market. Recognizing the rising risks across OT environments, Fortinet offers purpose-built solutions that consolidate security measures, reduce operational overhead, and enforce policies. These include the FortiSwitch Rugged 424F, FortiAP 432F access point, and FortiExtender Vehicle 211F wireless gateway, along with updates to FortiOS, FortiAnalyzer, FortiNDR, FortiDeceptor, and FortiGuard OT Security Service.
• In April 2023, The FortiGate 7080F represents a cutting-edge lineup of next-generation firewalls (NGFWs) designed specifically for businesses. These innovative firewalls go beyond traditional point products, streamlining operations and simplifying security infrastructure
• In May 2021, Forcepoint acquired Cyberinc IT Services and IT Consulting company based in the US. Forcepoint has intelligent remote browser isolation (RBI) technology that gives administrators granular control. It also has Smart Isolation capabilities to help Forcepoint enhance user productivity, lower operational burdens, and eliminate traditional monolithic products through a best-in-class SASE cloud service.
• In January 2021, Francisco Partners, a leading global investment firm that specializes in partnering with technology and technology-enabled businesses, acquired Forcepoint, a leading provider of cybersecurity solutions.

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