Security, now more than ever

Fear sells. And that deeply seated truism, which has been amplified during the uncertainty and anxiety of the ongoing pandemic, has helped turn information security into one of the hottest parts of the overall tech M&A market right now. Our data shows that infosec buyers have doled out as much money in the first three months of 2021 as they typically do in a full year.

The record-smashing infosec M&A spending comes as apprehensive businesses around the world continue to struggle with how to extend security to sweatpants-wearing employees doing their job from spare bedrooms or getaway houses. Further, the costs of coming up short on security have been exposed, rather painfully, by several recent high-profile breaches. Executives have gotten fired; market caps have been slashed.

It's a pretty scary world out there, at least from the perspective of many CISOs. Those concerns – some unique to COVID-19, others dating back to 'before times' – have helped fatten up already fat infosec budgets. Roughly two-thirds of respondents to 451 Research's Voice of the Enterprise: Information Security, Organizational Dynamics survey indicated that their organization is boosting its security spending. Fewer than one in 10 are cutting back.

The promise of infosec riches has attracted acquirers to the market in record numbers. Deal volume in the sector so far this year is on pace for a 10-15% bump above the previous highest annual level, according to 451 Research's M&A KnowledgeBase(opens in a new tab). More significantly, those transactions are coming with huge price tags. Our records show four infosec acquisitions valued at more than $1bn already in 2021, a big-dollar spree that helped push Q1 spending in the segment to its highest-ever level.

Recent Spending on Infosec M&A, $bn

Source: 451 Research’s M&A KnowledgeBase