The rise in cyber security spending forecast by BI in its report, Cybersecurity Primer: Accelerating Cloud Shift, is set to be due to a switch to cloud security, with the network and endpoint security segments likely to see the fastest growth.

Increased remote working is partly responsible for the expansion of the market, which was worth around $132 billion last year, but cloud-based software was already expanding in the security space before the Covid-19 pandemic, as it replaced traditional infrastructure.

Cloud software is already established in sectors such as enterprise resource planning, databases, systems software, and customer relationship management.

Companies such as CrowdStrike, Zscaler and Okta have been touted to expand three to four times faster than the market as a whole in the coming years.

Larger network security firms such as Palo Alto Networks, Check Point and Fortinet, on the other hand, may focus on mergers and acquisitions, given their strong balance sheets and need to shift to cloud products, according to the report.

Meanwhile, BI has predicted new market leaders to emerge to challenge the currently established names, with Crowdstrike being the strongest contender.

In addition, BI believes security spending will take a larger share of IT budgets, as companies try to fend off more sophisticated cyber attacks and avoid reputational and business risks.

No security company currently has annual sales of more than $5 billion, unlike other software segments where the likes of Amazon, Microsoft, Google and Salesforce have run-rates of more than $10 billion.

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“The biggest upside to expectations of high single digit growth for the cyber security market may come from faster-than-expected adoption of cloud-based security in areas such as network and endpoints,” said Mandeep Singh, senior industry analyst at BI.

“These two segments with about $31 billion in combined annual revenue depend heavily on sales of appliances and on-premises software and may benefit most from a migration to the cloud.”