Over the course of this year a growing number of large corporations have reported data breaches. Most recently, reports surfaced that hackers targeted several of the largest banking corporations in the US, including Deutsche Bank (DB), Bank of America (BAC) and JP Morgan Chase (JPM). JP Morgan Chase was the only bank which announced their systems had been breached (Fidelity’s also reported a breach in its systems).
As the breaches become more prevalent security firms that are responsible for protecting these corporations will become more necessary. Surprisingly, however, despite the increased demand for system protection and the enhanced priority large corporations are levying on security systems, the sector doesn’t seem to be growing as quickly one might expect. Of the large security corporations (Symantec (SYMC), McAfee (MFE), Fortinet (FTNT), Check Point Security (CHKP), FishNet Systems, FireEye (FEYE), and Palo Alto Networks (PANW)), only Palo Alto Security Systems’ stock has shown growth YTD.
Additionally — Symantec, one of the largest corporations in the industry, announced it would undergo a break up. Last week Symantec said it would split its company into two separate corporations. The break up comes as newer, and leaner corporations such as FireEye and Palo Alto Networks, are increasingly becoming the software of choice.
The combination of continual protection failures, underwhelming growth and break ups of the largest corporation smells like disruption waiting to happen. What will be next for the security software sector? How long will it take? How much risk will we face until the products improve?
What do you think?
Follow the companies mentioned in this blog post on Owler:
Deutsche Bank | Bank of America | JP Morgan Chase | Fidelity | Symantec | McAfee | Fortinet | Check Point Security | FishNet Systems | FireEye | Palo Alto Networks | Home Depot | Target | Sears | Apple | Kmart | HealthCare | UPS