Cyber Security Threats: Bad News for IT Organizations, Good News for Vendor Stocks

As cyber security threats increase so do the fortunes of cyber security vendors. That is the dilemma that organizations and the private sector face. The Bessemer Venture Partners' BVP Cyber Index tracked the capital-weighted performance since Jan. 1, 2011, of 29 public companies whose primary business is cybersecurity. Almost half of those companies are valued at more than a billion dollars. The public IT security sector outperformed the stock market by more than two times during that time, and outperformed the market by about five times the month after those breaches were made public. "Since then, it has seen more than twice the gains of the Nasdaq and S&P indexes. The sector spikes in the month after reports of major breaches. Over time, those multiples seem to settle back in line with the overall enterprise technology sector," said Cowan. Does this dynamic always need to result in a lose-lose outcome, or can organizations and the security vendors who build products to keep them save both win? Let's us know your experiences here at the Cloud and Cyber Security Center: http://cloudandcybersecurity.blogspot.com/