William Blair Thinking

Digital Expansion Creates a New Paradigm for Security

Video transcript

Jonathan Ho: Enterprises large and small are contending with the new reality that hybrid and work from home environments are here to stay. Historically, IT departments focused on securing devices and applications that were primarily located on premises in corporate environments and could deploy many layers of security to protect their networks, devices and applications.

However, with work from home, devices now sit on home consumer networks with little protection at all. In fact, many employees allow their family members to use their work devices to access the internet with little supervision after hours, and at the same time many work devices are also run on unsecured networks with other consumer devices.

We believe the new paradigm for security will have to adapt to the reality of protecting devices across a distributed environment, and in that world we see the adoption of more cloud-based security, and security specifically designed to protect corporate assets regardless of where they reside.

In terms of our second theme, digital transformation we are seeing almost every enterprise shifting their engagements with consumers to include some form of mobile application, web application or even in-store kiosks. Businesses everywhere are facing shortages of workers and looking for better ways to streamline their engagement with consumers, and to improve customer experiences by leveraging technology.

Companies also need to create broad-based digital campaigns to engage with customers and to maintain relevance. In many cases, digital transformation requires consumers to create new identities that can be used across different applications, as well as access via mobile applications, the web, and kiosks. We are seeing a large number of cybersecurity opportunities emerge in order to protect these consumer identities and to protect these identities from being compromised.

Lastly, Russia's invasion of Ukraine has raised the challenges for many enterprises of having to defend themselves from cyber warfare and nation state attacks. Critical infrastructure, financial institutions, energy and government agencies are all primary targets with nearly every sector of the economy responsible for securing their own environments.

We believe nation states are actively looking to compromise enterprises for the purposes of economic espionage, surveillance, leveraging cyber weaknesses, and as a way to obtain intellectual property. We believe companies will only face more challenges to protect themselves from sophisticated nation state attackers over time, and will need to further invest in prevention and detection technologies to stop these attackers from achieving their objectives.

In summary, we believe cybersecurity is an exciting and dynamic area that will only grow in importance over time. As a society we have become much more digitally engaged, and these new challenges will create growth opportunities and new revenue streams as companies public and private emerge to solve these new challenges. We believe investors should look at cybersecurity as an area that will remain relevant for the foreseeable future.

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