Notes from the Floor: Cyber Investing Summit

As all of us are aware, the cybersecurity industry has dramatically increased in size and scope in recent years, as high profile cyber attacks have pushed the industry towards the mainstream. However, despite this move towards the limelight, the sector has maintained much of its diversity.
From Homeland Security and major corporations, to small business owners and personal victims of cyber fraud, the industry is complex composite that reflects the breadth of cyber attacks. The first ever Cyber Investing Summit reflected the sophistication of this industry. The conference, held at the New York Stock Exchange, outlined the top investing opportunities, macro trends, and technological advances in the rapidly growing field of cybersecurity. From hardware and software to people and places, this one day event covered it all.
The Investing News Network was there to glean the latest insights from the top experts in this industry. Stay tuned for exclusive interviews and detailed analysis of the market in the coming weeks. But for know, here’s a teaser of the top cyber issues addressed at last week’s cyber conference.

1. Major opportunities for investment

A key theme of the conference was the significant opportunities for investment in the cybersecurity space. The day opened up with a welcome address from the founder and editor-in-chief at Cybersecurity Ventures and Forbes contributor Steve Morgan. Morgan threw around a lot of statistics (that we’ll take a closer look at next week), but for now, the message was crystal clear: the cyber industry is growing. The main question for investors, then, is not if to invest in the cyber market – it’s how.

2. Top areas for growth

It’s near impossible to distill such a complex market into specific subsectors that are expected to grow or fail. Instead, in the cybersecurity market, it’s a much smarter question to ask what niche the technology is fulfilling and how effective it might be. For instance, Oppenheimer analyst Shaul Eyal identified the un-glamorous area of automation as one of the key areas to watch. What this means is that cybersecurity professionals are currently warding off attacks from all different directions, and a large part of this process is decision making about what to prioritize. If the process could be automated, this would eliminate a lot of the guesswork and make IT teams much more productive and successful at warding off attacks.
Anne Barron-DiCamillo and Tom Kellermann of Strategic Cyber Ventures, an investment vehicle focused on supporting the strongest new companies in the cybersecurity space, echoed this concern. For them, it’s all about finding cyber solutions that can seamlessly work together, so that cyber professionals and companies can get the most out of their technology with the highest efficiency.
However, if these categories seem too broad for investors to really cling to, Andrew Chanin offered up the innovative option of a cybersecurity ETF HACK. This ETF allows investors to follow the market as a whole, without becoming bogged down by the specific challenges of choosing a specific niche or company in an ever evolving market.
3. Specialized personnel crisis
Finally, a major takeaway from the conference was the massive need for qualified cyber professionals. The sector needs very bright, highly trained individuals to bring their talents to the field, but right now, there’s a dearth in the sector. For any young college graduate or mid-career individual looking to enter a new field, cybersecurity may be your best bet.
For her part, keynote speaker Suzanne E. Spaulding, the Under Secretary of the National Protection and Programs Directorate at the Department of Homeland Security articulated the challenge of maintaining bright and ambitious talent on the government side of things, as the salaries just aren’t as competitive as the private sector. For Spaulding, the solution lies in deepening the ties between government and private sector, to generate more fluidity in personnel between the two sectors.
The event closed with afternoon keynote speaker Dick Grasser, the former chief of the NYSE who notably lead the stock exchange through 9/11, returning to this familiar about people. For all of the innovative technology in the cyber market, people lie at the heart of the industry. Therefore, the future of the market looks like it will be a close integration of people and technology, as more and more bright young individuals and sage investors turn towards cybersecurity as the home for their capital, talent and innovative ideas.
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Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.