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Inflation, cybersecurity and taxes: PwC’s update from Dubai

What happens in Dubai … well, happens everywhere

On March 1, PwC Dubai hosted a LinkedIn webcast, “Transforming Our Region,” featuring commentary by Stephen Anderson, PwC Middle East markets leader; Richard Boxshall, PwC chief economist for the region; and Hanan Abboud, a partner in PwC’s International Tax & M&A practice. This latest episode of the webcast series, which started in the summer of 2020, included three main themes, two of which likely resonate strongly outside the Middle East region.

Global inflation can be a drag, but regionally not so bad

First, Anderson and Boxshall noted recent regional economic growth and an overall positive picture, particularly as the pandemic begins to wane, but cautioned about inflation as a damper in the near term, with a critical caveat: Many of the global inflationary pressures and trends have been more muted in the Middle East, particularly within the economies of Saudi Arabia and the United Arab Emirates (UAE). Boxshall reported that inflation has been relatively low and well managed locally, at around 2% for the region, but varies widely across countries.

Like elsewhere, energy prices and supply chain snafus drive most of the inflationary concerns and effects in the Middle East, but high oil prices act as a double-edged sword for some of the most important regional economies, as more money flows into government coffers while demand is put at risk of being suppressed in the long run. Overall, PwC reported on the cautious sentiment in the region as the business leaders it surveyed see inflation elsewhere and hope for sustained smart economic stewardship to keep inflation low in the region.

Cybersecurity tops concerns

Investment and innovation comprised a second regional trend with global echoes, primarily because of the main concern about what could hold back growth: cybersecurity risks. According to Anderson, cybersecurity generated more worry among Middle East business leaders than geopolitical tensions or lingering pandemic-related healthcare risks. Notably, PwC’s survey did not factor in Russia’s invasion of Ukraine, which could bring geopolitics to the forefront. In TBR’s view, consultancies like PwC that can address clients’ cybersecurity concerns in concert with offerings around innovation, transformation and sustainability will continue to outpace cyber-centric or niche vendors as client leaders increasingly appreciate the business value of integrating cybersecurity into enterprisewide strategy.

Joining the global movement toward 15% tax rate

The last development PwC highlighted will have the greatest near-term effect in the UAE but bodes well for global economic growth and regional good governance. Anderson and his colleagues noted that the UAE became the first country in the region to announce plans to adhere to Organization for Economic Co-operation and Development (OECD) guidelines by instituting a 15% minimum corporate tax rate. With the country planning to implement the 15% tax rate effective June 1, 2023, and the local business corporate tax rate capped at 9%, PwC acknowledged plenty of unknowns and expects plenty of exemptions. But overall UAE is continuing its decades-long efforts to keep the country economically attractive and closely intertwined with the global economy.

Advising clients on adjustments to the new 15% tax rate, to include navigating free-trade-zone rules, will provide near-term opportunities in the UAE and longer-term revenues as other regional governments adopt similar tax structures. For PwC, a new UAE tax regime aligns perfectly with PwC’s The New Equation strategy and emphasis on trust, transparency and global interconnectedness. As TBR noted in November, “Globally, PwC partners were leaning into the trust and leadership components of The New Equation and finding clients receptive to, and even welcoming of, PwC’s efforts to ‘peek around the corner’ at trends, challenges and opportunities on the near and far horizons.”

Don’t bet against the Emirates

In TBR’s estimates, PwC’s 2021 management consulting revenues in the Middle East topped $670 million, roughly one-third of the firm’s APAC revenues but growing faster than any other PwC region. Inflation spikes and cybersecurity strikes may slow that growth, but a more likely scenario is that the UAE, the Kingdom of Saudi Arabia and other regional economies will maintain their rapid growth as their booming talent pools and friendly tax and corporate governance structures continue to draw investments and continue to create opportunities for consultancies like PwC. I served in Dubai, UAE, as a foreign service officer for the State Department in the late 1990s and know it’s a fool’s bet to think the UAE won’t, eventually and sometimes in surprising ways, do exactly what they say they’re going to do.

A Roaring ’20s for the Middle East?

PwC on post-pandemic digital transformation in the Middle East

On their March 23 webcast, “Transitioning to the New Normal,” PwC’s Middle East leaders discussed the results of their 24th annual CEO survey, focusing on findings specific to their region. Guided by Middle East Clients and Market Leader Stephen Anderson, the conversation highlighted four themes: growth, lessons learned, transformation, and threats, particularly around cybersecurity and talent. In addition to the respondents’ overall confidence that 2021 and 2022 will be growth years for the region, one highly notable findings was that 59% of Middle East CEOs surveyed are planning double-digit increases in their investments in digital transformation this year. Not only does that percentage track closely with TBR’s Digital Transformation: Voice of the Customer Research, but it also far outpaces any other area for investment, at least among Middle East-based CEOs.

The PwC leaders noted that while 2020 put considerable revenue pressure on most regional businesses, companies also used the pandemic as a catalyst to cut costs. But for 2021, cost-efficiency trails digital transformation as a priority. Again, this tracks closely with our own research, which found that companies are prioritizing investment in cloud and managed services over digital transformation for this year. Cloud demand stems directly from the pandemic and the move to remote working, while the increase in demand for managed services has been building for years.

In TBR’s recent survey, over two-thirds of respondents are planning to increase their budget for managed services over the next year, which will create opportunities for vendors that can tie cost savings to managed services solutions. Also echoing TBR’s research around global delivery and automation, PwC’s survey found that “productivity through automation and technology” ranked as the top “workforce strategy” in 2021, jumping from 6% of respondents in 2016 to 46% in 2021.

The twin threats of cybersecurity and talent

In discussing threats to growth in 2021, the PwC team described the Middle East as being ahead of the rest of the world in terms of both reducing headcount early in the pandemic and now rehiring to meet returning demands. The challenge, shared globally based on TBR’s discussions with IT services vendors and consultancies over the last year, remains finding skilled talent, upskilling current talent and managing the overall talent base, especially in a highly competitive market for digitally versed professionals. PwC’s Middle East team suggested closer cooperation between commercial entities, local governments and higher education providers would be key to regional companies being able to recruit enough skilled talent in the near term. (Quick side note: PwC has a product that may be instrumental in tackling that talent shortage.)

As for cybersecurity, the PwC team acknowledged the reality that the 2020 rush to the cloud, sparked by the move to remote working, opened the doors to new cybersecurity vulnerabilities, leading over 40% of Middle East CEOs in PwC’s survey to rank security as a threat to growth this year. According to TBR’s Digital Transformation: Voice of the Customer Research, 26% of the surveyed respondents in Europe see regulatory compliance risk as an impediment to successful digital transformations. In the same study, 50% of the respondents overall said the most critical attribute for vendor selection remained working knowledge of digital-related security, risk and privacy issues.

But we made it through together

Thankfully, the webcast didn’t end on the pessimistic note of threats and talent shortages. Instead, the PwC team observed that the region’s people — across all businesses and professions — had been “stress tested,” had become more adept at new ways of working, had found a new appreciation for “others’ well-being,” and were poised to build on the lessons learned and change atmosphere and, perhaps, welcome in a new Roaring ’20s.

Throwing a bit of a black cloud on that optimism, in the PwC CEO survey, the widest gap between Middle East CEOs and the global respondents occurred on the subject of “geopolitical uncertainty,” which CEOs from the Middle East saw as a far larger threat to growth. In contrast, Middle East CEOs were markedly less concerned than their global counterparts about overregulation as a hindrance to growth, perhaps pointing the way toward what TBR believes could be a path to success in the region in 2021: follow the Dubai, United Arab Emirates, promise of no new government fees until 2023 and the Omani shift toward more access for investors. Using competitive pressures within the region to continue to make the Middle East as a whole more attractive to global investment and trade will likely remain a key strategy for local CEOs and government leaders.

TBR has tracked developments in the region through special reports on Egypt and other nearby countries and IT services vendors’ investments as well as the financial and performance metrics of management consultancies published semiannually in TBR’s Management Consulting Benchmark.

Peraton’s purchase of Perspecta: The latest move in the quest for scale in federal IT

Scale is king

Peraton’s purchase of Northrop Grumman’s (NYSE: NOC) IT services business and pending acquisition of Perspecta (NYSE: PRSP) are clearly aimed at obtaining the scale necessary to compete for large enterprise and digital transformation deals, which have become common in the public sector IT services market.

Peraton is hardly the first in this space to make such transformative purchases. SAIC (NYSE: SAIC) made two large acquisitions in two years with Engility and Unisys Federal in 2019 and 2020, respectively; General Dynamics IT (NYSE: GD) purchased CSRA in 2018; and Leidos (NYSE: LDOS) perhaps started the trend with its purchase of Lockheed Martin (NYSE: LMT) Information Systems & Global Solutions (IS&GS) in 2016. As federal agencies seek to modernize and transform their operations to take advantage of emerging technologies such as cloud, 5G, AI, machine learning, and AR and VR, large monolithic deals, such as the Next Generation Enterprise Networks Recompete (NGEN-R), Defense Enterprise Office Solution (DEOS), Global Solutions Management – Operations II (GSM-O II) and Joint Enterprise Defense Infrastructure (JEDI), among others, illustrate the importance of being able to deliver these technologies and surrounding services at scale.

Companies such as Leidos, General Dynamics Technologies (GDT) and Booz Allen Hamilton (NYSE: BAH) have come out as the clear winners on the vast majority of multibillion-dollar deals like the ones mentioned above, thanks largely to their ability to deliver digital transformation at scale and proven past performance. TBR believes this trend is only going to become more pervasive in 2021 as the federal government pursues continued IT modernization across defense, intelligence and civilian agencies. Alternatively, if the federal government begins to move toward smaller contracts in terms of total value and/or duration, Peraton’s newly acquired scale would no longer be an asset. However, this is likely only a long-term concern, as the federal government shows no signs of ramping down contract sizes or duration for the foreseeable future.  

Why Perspecta had to die

Perhaps nothing illustrates the importance of scale more than the death of Perspecta. When the company was formed from the merger of DXC Technology’s (NYSE: DXC) public sector business with Vencore and KeyPoint Government Solutions in 2018, the clear intention was to create a federally focused contractor of scale that could compete for the large transformative deals that have become commonplace. Most important among these was the NGEN-R contract, whose predecessor, the NGEN contract, was held by Perspecta and represented nearly 20% of the company’s total revenue.

Despite this, Perspecta was unable to win the $7.7 billion NGEN-R, which was awarded to Leidos and will begin to ramp up in 2H21, leaving Perspecta with a loss of 19% of its total revenue, which cannot be replaced quickly enough to avoid steep losses year-to-year.

Losing the NGEN-R bid put Perspecta in a very difficult place, beyond the obvious financial burden. The company’s leadership has fielded tough questions from Wall Street about where the company is headed without NGEN-R. Perspecta has been unable to win any comparable deals, such as DEOS or GSM-O II, on which it has bid in the last year or two. Additionally, the company does not have as strong of a portfolio in emerging technologies as many of its competitors, and it is highly unlikely Perspecta on its own could have returned to growth quickly enough to appease its stakeholders. In this context, it is clear that Perspecta needed to die. With its pending sale to Peraton, there is opportunity to reemerge as a more formidable competitor in the federal IT services market, free from the burdens associated with its past failures as part of Peraton.

On Jan. 27, Perspecta announced its purchase by Peraton, a Veritas Capital portfolio company, for an all-cash price of $7.1 billion. This acquisition comes on the heels of Peraton’s purchase of Northrop Grumman’s IT services business, which closed Feb. 1 (outlined in TBR’s special report End game for Northrop Grumman’s IT services business). The resulting company, which will retain the Peraton name, will be a $7.6 billion to $7.9 billion business on a pro forma basis with approximately 24,300 employees, in TBR’s estimates.

Women in STEM: EY’s Kris Lovejoy on the importance of mentorship

The STEM field is growing, creating tremendous opportunity for well-trained applicants. While STEM has traditionally been a male-dominated field, cultivating interest at the undergraduate level can help draw in more women who may have the necessary skills but have never considered STEM as a career path. In TBR’s monthly series Women in STEM, we discuss how female leaders have successfully pursued careers in STEM and are encouraging more female representation by passing on the lessons they have learned to other women who are pursuing this path.

Meet Kris Lovejoy, global consulting cybersecurity leader at EY

Kris Lovejoy took a nontraditional path to her current position as a cybersecurity leader and advocate of quantum developments at EY. Prior to working at EY, Lovejoy worked in IBM’s cybersecurity business for seven years and was CEO of BluVector, an AI-powered security automation firm, prior to its acquisition by Comcast in 2019.

Lovejoy holds a Bachelor of Arts degree in English from Lafayette College in Easton, Penn., but opportunities that arose at the beginning of her career led her to shift her focus to a career in STEM.

Inspiration can be found where you may not expect it

Lovejoy emphasizes the importance of those we entrust with our children during their formative years. “The importance of educators can’t be underestimated,” Lovejoy says. She notes that one of the most influential people in her decision to enter the STEM field was her high school French language teacher, Donna Matles, who “gave me the courage to recognize my own value during some very dark days.”

Don’t let the loneliness of male-dominated fields intimidate you

As a woman with more than two decades of experience in the male-dominated cybersecurity field, Lovejoy says, “Finding the courage to continue where one feels very alone has not been easy, but I and my colleagues in cybersecurity are optimistic that we’re bringing diversity to the field.” It is an unfortunate reality that women with vocal opinions are often labeled as difficult. “Many women, in my experience, don’t feel comfortable speaking out,” says Lovejoy. “Instead, we talk about concerns within trusted circles.”

Often, one of the biggest roadblocks to personal progress is ourselves. In Lovejoy’s opinion, a key way to overcome this roadblock is to “learn how to empathize with others, including those who perpetuate stereotypes. It’s a matter of recognizing that the people you’re working with are human beings, and you can help them see the world through a different lens.” In short: Changing the landscape of STEM requires not being afraid to speak up and ask questions when something does not seem right.

Innovation benefits from diversity

Perhaps the most impactful piece of advice from Lovejoy: “Innovation benefits hugely from diversity.” STEM fields are some of the most innovative fields, yet remain male-dominated. Lovejoy states, “Based on various major tech companies’ diversity reports, female employees make up between 27% and 47% of the workforce, with the percentage dropping much lower when it comes to actual tech jobs, even though women make up more than half of the U.S.’ professional workforce.”

“We must work harder to raise the status of women technologists and promote female role models if we are to attract more women to the industry,” says Lovejoy. In 2018 EY launched EY Women in Technology (WiT) to promote a steady increase in female leaders in technology. “WiT is the articulation and demonstration of EY’s commitment to achieving a greater level of gender equality in a technology-enabled world,” says Lovejoy. Because the gender disparity in STEM fields is a global issue, EY’s global scale, coupled with the efforts of the WiT movement, positions the company well to make an impactful difference. EY is also a member of the Global Innovation Coalition for Change (GICC), a UN Women initiative that brings together private sector companies, academic institutions and nonprofit organizations to improve women’s access to and participation in STEM education.

STEM disparity goes beyond gender

From an economic standpoint, access to STEM opportunities decreases in line with a student’s socioeconomic status. STEM fields often require access to technical tools or technologies to adequately learn the basic skills. Lovejoy highlights the EY STEM Tribe Platform, which was created in collaboration with Tribal Planet to engage people globally on social impact priorities. This platform enables students worldwide to engage in STEM learning activities on their mobile device, in an entertaining and game-like manner, with modules on everything from climate change and space exploration to 3D printing and AI. “The global platform was previously piloted in India to 6,000 girls, and then EY launched this pilot in two U.S. cities, Seattle and Atlanta,” Lovejoy explains.

Look to and learn from the pockets of success

While there is still a long way to go in reducing access barriers to STEM resources and increasing the number of women in STEM fields, there have been successes we can celebrate and learn from. For example, Lovejoy states that EY’s cybersecurity team in Saudi Arabia is made up of 46% women. While still technically the minority, this is a massive and surprising win in a region where it is often believed that women are given very little opportunity to thrive.

As we look to these successes and try and replicate them on a global scale, Lovejoy leaves us with one final piece of advice, “Find people that you work with — male or female, doesn’t matter — people willing to speak on your behalf and coach you when you need it.”

Secureworks: A force for good in an unsafe world

Taking a holistic fight to the enemy

Over the two-day Secureworks Analyst Event, multiple Secureworks (Nasdaq: SCWX) executives emphasized the company’s broad vision of belonging to, and leading, a larger cybersecurity community dedicated to helping customers, in the words of Secureworks CEO Mike Cote, “outpace adversaries.” Through a strategic shift toward providing platforms and software, Secureworks has begun repositioning itself within that larger community, becoming a more holistic provider of security offerings for its clients. In TBR’s view, this new emphasis on enabling “the right response rapidly,” as Cote said, and bringing the cybersecurity community together around shared challenges may set Secureworks apart in 2021.

Security at scale to meet customer needs  

Framing Secureworks’ place in the cybersecurity ecosystem, President of Customer Success Wendy Thomas said the company’s new cloud-native security software platform, boosted by embedded machine learning and workflow automation, has positioned Secureworks to be the security platform of choice. With 20-plus years of security operations experience, a global security brand, a scalable network effect, and market-leading threat intelligence, the company is, in Thomas’ estimation, “uniquely positioned to democratize access to security at scale” and meet its mission of securing “human progress by outpacing and outmaneuvering ever-evolving adversaries.” Thomas substantiated the assertions, noting that Secureworks’ experience and expertise enabled the company to bring significant cybersecurity-specific research to its shift into platforms and software. Secureworks, Thomas said, had embedded threat researchers into its software development teams, ensuring that the company’s software was purposefully built by security experts and security operators. To address customer needs, Thomas said Secureworks had begun transitioning existing customers to a cloud-based platform, starting with a standard consulting approach that focuses on building a journey map to demonstrate how well Secureworks knows the customer and its security environment. According to Thomas, Secureworks then develops a solution as “turnkey as possible,” while creating the feeling, for the client, of “an upgrade to first class,” with optimal security coverage and hygiene. In TBR’s view, Secureworks’ understanding of its own role in the cybersecurity ecosystem and evolving appreciation of its customers’ needs underpin the company’s pivot from a standard MSSP to a consulting-led platform and software provider, which could help Secureworks become a leading vendor across the cybersecurity market.  

Over two days of virtual sessions, Secureworks executives, partners and customers presented to analysts the company’s pivot toward a platform and products company, detailing changes to Secureworks’ offerings, go-to-market strategy and sales structure. The event included extensive interaction with the broad Secureworks team and individual sessions for TBR with the company’s leadership. The following includes TBR’s assessment of the event and perspectives from ongoing analysis of Secureworks; the cybersecurity space; and Secureworks’ primary shareholder, Dell Technologies.  

EY 2021: Hybrid and omnipresent

TBR perspective

A few years ago in a wide-ranging discussion, TBR analysts and EY executives considered the future consulting business model, noting how most industries had been fundamentally disrupted by technology while consulting had seemingly remained unchanged. Fast forward to the current pandemic, and EY clearly anticipated where consulting was headed: hybrid engagements, delivered in-person and virtually, substantially aided by technologies, including big bets EY made on AI, blockchain and cybersecurity. In addition, EY has understood a significant shift in the IT services and consulting ecosystem, in which technology vendors’ needs have been supplanted by clients’ needs, making partnerships less about sales and marketing and more about delivery.

During the opening session of the Technology Analyst Summit, Dan Higgins, the firm’s Global Technology Consulting Leader, said clearly and definitively EY intends to become “the transformation consulting leader,” an ambition that requires best-in-class and scaled capabilities around technology, data, platforms, products and ecosystems. In Higgins’ view, one of EY’s strengths in tackling that ambition came from being able to bring the entire firm to bear at a client, from all aspects of consulting, as well as tax and strategy & transactions. The September Technology Analyst Summit and the one-on-one discussions with EY executives in the following weeks confirmed TBR’s assessment that EY’s evolution continues, undeterred by COVID-19.

In an expansive and informal discussion with TBR after the event, EY’s Global Vice Chair for Consulting Errol Gardner said the firm’s performance in the Asia Pacific region has returned to close to 2019 levels, adjusting more rapidly to the COVID-19 era than other regions. He predicted massive opportunities to consult with the government sector in Europe in the coming year as well as sustained uncertainty in North America (specifically the United States), all while noting that the current market does not favor new entrants or substantial account turnover, with most clients unwilling to take on additional risks associated with onboarding new consultants.

Gardner’s comments extended his Technology Analyst Summit opening remarks and provided some assurance that the radically changed business model for consulting would not lead to a radically changed EY, except in certain areas, such as remote working, diversity and inclusion, and resilience. Gardner also reinforced one of the overarching themes TBR took away from the entire event: The future is hybrid, which includes not just delivery but also how EY structures itself and continues to build its business. Beyond recruiting talent, building solutions and acquiring assets, Gardner reiterated the firm would be relying on ecosystem partners and expanding beyond traditional alliance structures to meet clients’ evolving demands. In TBR’s view, this approach to ecosystems has developed over the last few years as the firm has shifted from selective and limited alliances to a more expansive partnering model.

In a follow-up discussion after the Technology Analyst Summit, EY’s Global Business Consulting Leader Amy Brachio described an evolution of clients’ consulting needs and how EY tackles those changes. According to Brachio, clients previously brought EY problems that required a specific skill set or clearly defined capabilities to solve. As emerging technologies have forced changes to clients’ business models, EY has responded to more complex and transformational problems by bringing to bear the entire firm.

Frictions within the global firm that previously prevented more holistic responses have been minimized through resetting how EY looks at clients’ problems and how EY measures its own success. Rather than focusing on global total engagement revenue by competency (such as supply chain), EY has shifted to evaluating performance based on the buyer’s agenda and understanding which skills and capabilities the entire firm needs to bring to solve more complex problems. In TBR’s view, shifting from a traditional mindset around revenue metrics based on competencies to a client-centric, holistic understanding of EY’s role within a client’s ecosystem reflects the firm’s overall culture around purpose.  

Sticking to strategies and building alliances around security, AI and blockchain

Ever-expanding alliances with key technology partners have underpinned EY’s technology evolution over the past few years. Building on comments made during the Technology Analyst Summit, Global Alliance and Ecosystem Leader Greg Sarafin explained to TBR that the firm’s alliance remained grounded in joint solutions, integrated platforms and shared clients, not joint ventures or business groups. In contrast to other leading consultancies and global SIs, EY’s approach to partnering with technology vendors, particularly companies such as SAP (NYSE: SAP), IBM (NYSE: IBM) and Microsoft (Nasdaq: MSFT), revolves around definitive opportunities centered on EY-built platforms and solutions. For example, the firm has partnered with IBM Watson to create Diligence Edge, a due diligence platform that, according to Sarafin, substantially reduces the hours needed to “find the worms and the pearls … [to] accelerate the time to find issues and accelerate the time to value” for clients examining acquisition targets. Sarafin added that EY will “lean in on solutions” and “solve big problems” with EY-built solutions and platforms.

While EY may deliver some of these products as managed services, the firm’s primary business model will continue to revolve around the consulting, process re-engineering, integration and change management work necessary for clients to continue with their digital transformations. On that last element, Sarafin noted that COVID-19 brought religion to boards about the importance of digital transformation, ending the indecisive start-and-stop nature of many engagements and convincing EY’s clients they need to move to the cloud. As part of EY’s story on digital transformation, Sarafin shared with TBR that EY’s wavespaces would continue to evolve, becoming more tightly aligned with technology partners, such as Microsoft, or more industry-centric, such as around manufacturing in a to-be-opened wavespace in Ohio. (Note: TBR has written extensively on wavespaces and on innovation and transformation centers generally.)

EY Virtual Technology Analyst Summit: On Sept. 28 and 29, EY hosted analysts for a global EY Virtual Technology Analyst Summit, which showcased the firm’s technology-centric offerings and capabilities and included breakout sessions on functional areas, such as blockchain, security and analytics, as well as client success stories. The following includes information gathered during the event and in subsequent one-on-one discussions with EY executives.  

Vendors pursue opportunities in cloud and cybersecurity to alleviate revenue pressures related to COVID-19

Vendors pursue opportunities in cloud and cybersecurity to alleviate revenue pressures related to COVID-19

IT services trailing 12-month (TTM) revenue growth, at 1.5% in U.S. dollars (USD), was down 20 basis points sequentially and 170 basis points year-to-year in 1Q20 as the COVID-19 pandemic began to negatively affect vendors’ revenue growth during March. At every level of every organization, the pandemic forced massive changes in human resources management, pushing vendors to quickly reorganize service delivery to work-from-home models and proactively pursue similar activities with clients as they strive to keep operations running. While vendors are strengthening relationships with existing clients, the pandemic disrupted traditional sales motions, making attracting and landing new logos more difficult in an all-virtual environment, and challenging IT services vendors to develop novel ways to promote new offerings to clients. The pandemic substantially boosted demand for cloud and cybersecurity as all-remote working and delivery necessitated massive changes and brought in new risks.

The IT Services Vendor Benchmark details and compares the initiatives of and track the revenue and performance of the largest global IT services vendors. The report includes information on market leaders, vendor positioning, the IT services market outlook, key deals, acquisitions, alliances, new services and solutions, and personnel developments.

Benchmark security revenue continues to increase, driven primarily by rising demand and acquisitions in 2H19

Key 2H19 benchmark takeaways

Total benchmarked revenue

Double-digit growth among covered vendors was due to steady industry acquisitions and strong performance from many of the vendors, including IBM (NYSE: IBM), F5 Networks (Nasdaq: FFIV), CyberArk (Nasdaq: CYBR), Fortinet (Nasdaq: FTNT) and Splunk (Nasdaq: SPLK). TBR believes security demand continues to rapidly accelerate as companies execute digital transformation projects and cyber threats continue to increase. The COVID-19 pandemic is resulting in an increase in cyberattacks aimed at multiple verticals such as healthcare and financial services, as institutions are forced to operate online in a greater capacity than prior to the outbreak.

Application security and mobile security segments

Higher demand for email- and web-related security as well as application vulnerability scanning led to an increase in application security segment revenue. The mobile security segment is seeing high revenue growth as the number of mobile devices continues to rise and the need to provide endpoint detection to all mobile and IoT connected devices increases.

TBR’s Security Benchmark provides clients a deep dive into the enterprise security market, highlighting the financial performance of public and private, multiline, and pure play vendors within the industry.