Zscaler growth a sign of expected boom in cybersecurity industry

NEW DELHI: India born Jay Chaudhry, founder of California-based cybersecurity company Zscaler, climbed 577 spots in Harun Global Rich list of 2021 to become one of the top ten richest Indians, after his net worth rose 271% annually. His company’s revenue grew 10% sequentially and 55% annually to reach $157 million in Q2 FY21.

Chaudhary’s rise can be attributed to the pandemic driven digital rush that has seen companies across the world step up IT spending, particularly on cybersecurity.

Also Read | How citizen data led India’s covid battle

In the light of growing cases of cyberattacks trying to exploit any weak links in the remote working model, cybersecurity emerged as a high investment priority among both large and small organisations. It accounted for 26% of entire IT spending by SMEs in 2020, up from 23% on year. In large enterprises, the share grew to 29% in 2020 from 26% in 2019, as per Kaspersky.

Industry reports indicate that organisations are expect their cybersecurity budget to grow faster over the next few years. For instance, Gartner expects India to spend $362 million on cloud management and security services in 2021, an increase of 31.2% year-on-year. In 2020, spending grew 10%.

Similarly, Data Security Council of India (DSCI) expects global cybersecurity services market to grow 10% to reach $89 billion in 2022. In comparison, Indian cybcersecurity industry is expected to grow at an even higher 21% to reach $7.6 billion in 2022.

As per DSCI, the number of cybersecurity companies in India has also grown in last 1-2 years. Around 225 cybersecurity startups in India, generated revenue of $1 billion in 2020, up from $475 million generated in 2018.

In addition to private enterprises, entities in government sector are also expected to scale up IT spending this year. A recent report by Gartner, IT spending by India’s government sector is likely to grow annually at 9.4% amounting to $7.3 billion in 2021 as compared to $6.6 billion spent a year ago.

Apart from Zscaler, other security companies have also reported jump in revenue. For instance, US based McAfee reported a 14% annual increase in net revenue in fourth quarter of the fiscal year which ended December 2020. Among Indian companies, Quick Heal’s quarterly revenue in Q3 FY21 grew by 6.3% annually, while revenue for nine months fiscal year 21 ending December 2020 grew by 2.64%.

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