2015 unclassified federal government cyber security spending

June2016Issue#17

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Perspectives–UnclassifiedFederalGovernmentCyberSecuritySpending

Reportedfiscalyear(FY)2015unclassifiedFederalgovernmentcybersecurityspendingisup3%year-over-yearto$13.1billion.ThePresident’sBudgetRequestforFY17includes$19billioninfundingforcybersecurityactivities.

UnclassifiedFederalgovernmentcybersecurityspendingshowedmodestgrowthinFY15–increasing3%to$13.1billionversusthepreviousfullfiscalyear.FY15alsomarkedthefirstfiscalyearthatFederalciviliancybersecurityspendingeclipsed$4billion.Whilecybersecurityspendinghasoscillatedaroundroughly$12and$13billionoverthelastseveralyears,theFY17budgetrequestindicatestheFederalcybersecuritymarketmaybereachinganewinflectionpoint–perhapsakintotheinflectionpointbetweenFY09andFY10precipitatedbytheComprehensiveNationalCybersecurityInitiative(CNCI).The$19billionbudgetrequesttosupportcybersecurityactivitiesmarksasignificantdeparturefromthespendingpatternofthepost-CNCIera.

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

(Ena

cted

)

FY17

(Req

uest)

FY15

v.

FY14

,%Δ

TotalUnclassifiedFederalCyberSecuritySpending

$6.8 $12.0 $13.3 $14.6 $10.3 $12.7 $13.1 $14.1 $19.0 +3%

OfWhich:Dept.ofDefense(DoD) $4.2 $9.5 $10.1 $12.1 $7.1 $9.0 $9.1 TBD TBD +2%

OfWhich:FederalCivilian $2.6 $2.6 $3.2 $2.6 $3.2 $3.8 $4.0 TBD TBD +7%

(in$billions)

Thejumpinanticipatedcybersecurityspendingmaysoundpromisingtobothcybersecurityproductvendorsandserviceprovidersaswellastraditionallycash-strappedgovernmentprogrammanagers,butthereremainsasignificantamountofuncertainty.Howmuchofthe$5billionincreaseovercurrentyearlevelsisnetnewmoney?Howmuchoftheincreaseisaresultofreorganizationandreprogrammingoffunds–similartowhatoccurrednearlyadecadeago?Partofthisincreaseinfundingstemsfromaproposed$3.1billionITmodernizationfund–whichisstillinfluxduetopoliticaldifferences.Additionally,assumingitisincludedintheappropriations,theproportionoftheseITmodernizationfundsthatwouldapplytocybersecurityversusnon-cybersecurityactivitieswoulddependonthelegacyITsystemsandprogramsthatareprioritizedformodernization.

Whetherthelargeincreaseinfundingisrealizedornot,thereareotherimportanttrendsthatareindicativeofFederalgovernmentcybersecurityprioritiesandinitiatives.Forthepastseveralyears,theOfficeofManagementandBudget(OMB)hasbeenusingthreeprimarycategoriesforcharacterizingcybersecurityspending:(1)PreventMaliciousCyberActivity;(2)Detect,Analyze,andMitigateIntrusions;and(3)ShapetheCybersecurityEnvironment.

June2016Issue#17

1100NorthGlebeRoad,Suite1010,Arlington,VA22201|Tel:703.224.4407|Fax:703.224.8001|info@thesotergroup.com©2015TheSoterGroup.AllRightsReserved.

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FY15showedcontinuedinvestmentinShapetheCybersecurityEnvironment,whichhasalargefocusonworkforcedevelopmentandtrainingaswellascybersecurityresearchanddevelopment.Thiscategoryaccountedfor43%oftotalspending,orapproximately$5.6billion.Theprimaryareaofgrowth,however,wasPreventMaliciousCyberActivity,whichincreased22%year-over-yearto$4.6billionthispastfiscalyear.Thisgrowthalignswithseveralmajor,on-goinggovernmentcybersecurityinitiatives,suchaslargenetworksensorprogramsandtheContinuousDiagnosticsandMitigation(CDM)program.

ItcontinuestobeadynamicperiodfortheFederalcybersecuritymarket,fromallangles–budget,policy,technology,andthreatenvironmentincluded.Muchofthiscanbeattributedtoincreasedunderstandingofthethreatandthecybersecurityproblemacrossgovernmentstakeholders;increasedcommitment,includingbudgetarycommitment,fromtheWhiteHouse,Congress,anddepartmentleadershiptoaddressthesecybersecurityconcerns;andincreasedestablishmentandformalizationofcybersecurityprogramsandorganizations–andassociatedsupportcontracts.Theimpendingtransitiontothenextadministrationisalreadyatthetopofeveryone’sminds,andonlytimewilltellwhetherthiscybersecuritymomentumandrenewedsenseofurgencypersists.

AboutTheSoterGroup

TheSoterGroupprovidesservicestoboththeFederalgovernmentandthecommercialentitiesthatsupportit.OurCommercialServicesDivisionprovidesmarketresearchandassessments,competitiveassessments,andstrategicadvisoryservicestocommercialclientsseekingtoenterorgrowintheFederalgovernmentsecuritymarket.JustinTaft,President&CEO,andPeterWong,DirectorofMarketResearch,authoredtheseperspectives.TheSoterGroupwelcomestheopportunityforourresearchtobecitedinthird-partyreports.Tolearnmore,pleasevisitwww.TheSoterGroup.comand/oremailinfo@TheSoterGroup.com.Toaccessandreadourotherreports,pleasevisit:TheSoterGroupMarketReports.

ReportJune2016:Perspectives–UnclassifiedFederalGovernmentCyberSecuritySpending

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$1

$2

$3

$4

$5

$6

$7

FY13 FY14 FY15

Billion

s

GovernmentFiscalYear

UnclassifiedFederalCyberSecuritySpendingbyMajorCategory

PreventMaliciousCyberAclvity

Detect,Analyze,andMilgateIntrusions

ShapetheCybersecurityEnvironment