This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/24/2018

Overview

The Australian Information and Communications Technology (ICT) market is valued at approximately USD100 billion. The information technology (IT) services industry accounts for approximately one third of the total IT market and is valued at nearly USD18 billion. The Australian ICT market is mature with a large number of multinational technology companies active in the local market.

The Australian cybersecurity market according to analyst group Gartner will reach USD3.2 billion in 2018. USD100 million100 will be spent on hardware-related purchases, USD600 million on software and USD2.5 billion on services. The cyber market is growing at over 7% annually. Much of the growth can be attributed to emerging digital threats, increased exposure to cyber risk, corporates reaction to increased regulation of cyber risk, and business’ evolution to consolidate a digital business strategy. A recent report by the Australian Cyber Security Growth Network entitled Cyber Security Sector Competitiveness Plan suggests that over the next decade, the Australian cyber market has the potential to triple in size.

Locally, there is strong demand for cyber security services as many public and private companies lack the internal expertise to adequately and comprehensively secure their IT assets. %%This trend will grow over the next decade as companies will place an even greater reliance on outsourced security vendors to provide digital security solutions on their behalf. This is especially true with small to medium sized companies.

American and Israeli companies make up the majority of the import market for IT security solutions (and the majority of the whole market). 60% of all imported solutions are of US origin and approximately 20% originates from Israel.  US companies are widely recognized as providing industry leading solutions and are well respected in the local market. In addition, Australian and American defense forces have a very strong working relationship, and if a product is approved for use with the US military, typically the approval process for adoption by Australian counterparts is much simpler.

As much of the demand for cyber products and solutions is supplied by foreign vendors, it is no surprise that Australian companies do not feature in the list of the top 15 security software vendors in the local market. Australian companies only feature in a significant way in the supply of services and acting as channel partners for overseas vendors supply specific and niche security service expertise.

As the above graph shows, of  the USD3.2 billion total local spending on cyber security products and solutions, USD1.4 billion is derived from imports from companies that don’t have a core team in Australia, USD2 billion is a combination of local companies and from local subsidiaries of foreign vendors and about USD200 million in solutions and services is exported out of Australia.

In the end-user market, financial service firms – ANZ, NAB, CBA, Westpac, AMP – amongst others, are the largest users of cyber products in the Australian market. Collectively, the segment accounts for one third of Australia’s IT security demand. It appears that they spend more on average than most other financial institutions on a global scale. According to a recent report by industry group IDC, the cyber spend by Australian government agencies, and telecommunications, education, professional services, and transportation companies is also  greater than their world counterparts.

Australian Government’s Cyber Security Posture
The Australian Government’s cyber security capabilities are housed under the umbrella of the Australian Cyber Security Centre (ACSC) – www.acsc.gov.au  The ACSC works with government and business to reduce the cyber security risk to Australian government networks, and networks of national interests. It also acts to enable a more comprehensive understanding of cyber threats and sharing information to both government and private sector alike.

The ACSC houses the cyber security efforts of the Australian Signals Directorate (ASD), Computer Emergency Response Team (CERT) Australia, The Defence Intelligence Organisation (DIO), the Australian Criminal Intelligence Commission (ACIC), the Australian Federal Police (AFP), and the Australian Security Intelligence Organisation (ASIO). More information on these agencies can be found at:
https://acsc.gov.au/publications/ACSC_Threat_Report_2017.pdf

Other government agencies that have responsibility for managing Australia’s cyber policy and implementation include: Department of Prime Minister and Cabinet (governance, structure,  and research),  Attorney General’s Department (increase Australia’s CERT capacity), and the Department of Defense (increase Australian Signals Directorate’s capacity to identify new and emerging cyber threats).
 
 
 2015201620172018 (Estimated)
Total Local Production1,6001,7301,8602,000
Total Exports161173186200
Total Imports1,1251,2091,3001,400
Imports from the US
 		663711762820
Total Market Size2,5642,7722,9803,200
Exchange Rates.75.74.77.77
(total market size = (total local production + imports) - exports)
Unit: USD Thousands

Leading Sub-Sectors

Mobile device penetration is very high in Australia and the banks especially are spending significant amounts of money to enable mobile banking applications. As such, the demand for mobile security solutions will be strong over the next few years, these include threat detection, end-point penetration and authentication tools. The rise of the Internet of Things will ensure that end point security will also be critical. The increase in compliance and regulation around data security will mean that reporting and compliance tools will also be in strong demand.

Opportunities

Overall, the market for cyber services will remain very strong over the next decade as Australian companies outsource the supply of security solutions.
Thanks to the US Australian Free Trade Agreement, there are no tariffs on the importation of software. A goods and service tax (GST) is levied on the landed value of goods imported into Australia. GST is also applicable to services that are carried out in Australia however, not on services that are carried out remotely.

Web Resources

Australian Information Industry Association
Australian Reseller News
CIO

Trade Shows/Events
MILCIS – Military Communication & Information Systems Conference
13-15 November 2018
 

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