Here’s what happens when companies pivot to cybersecurity

As the cybersecurity industry grows in importance for businesses, some managed service providers (MSPs), startups, and IT firms are taking the hint and pivoting, focusing more intently on getting further into the industry as other sources of revenue grow less reliable.

Spirit Technology Solutions, an MSP headquartered in South Melbourne, Australia, experienced a 15% decline in revenue for the first half-year ending December 31, 2023—but its recent acquisition of cybersecurity company InfoTrust may help “expand and bolster” the MSP’s services in the cybersec industry.

After struggling financially, WiJungle, a startup in Jaipur, India, entered the cybersecurity scene in 2017 and found success with the move. Shifting from Wi-Fi to security, the startup was named Entrepreneur India’s Tech Startup of the Year in the security category for 2023.

The pivot to cybersec is becoming more and more prevalent, “especially among MSPs,” according to James Campbell, the CEO and co-founder of London, England-based cloud forensics and incident response platform Cado Security.

“At the moment, I think it’s a bit of a no-brainer,” Campbell told IT Brew. “When the industry has wobbles, cybersecurity tends to be…one of the stronger ones to ride the waves of the markets and industries.”

Noting that the industry is not “immune,” Campbell—who previously worked in Australia’s Department of Defence in cybersecurity operations—said there’s a couple of reasons organizations migrate to cybersec, adding that he personally began seeing this shift over the last year or two.

“One is that mid-market kind of growth, but also, many service providers, as well as consulting firms are looking at new revenue streams,” he said.

As the threat landscape evolves, many companies are jumping into “what is perceived as a lucrative market,” according to Caroline Wong, the chief strategy officer for Cobalt, a company that offers penetration testing as a service.

“I think a pivot we’re seeing pretty consistently across the board is companies shifting from primarily defensive security measures to incorporating more offensive security measures,” Wong told IT Brew in an email. “Tech like generative AI is changing the cybersecurity landscape and businesses are realizing they have to take a more proactive approach to protecting themselves and their customers.”

Zooming out, Wong said businesses and startups entering any new industry need to have “differentiated offerings that provide clear value for customers and competitive pricing…Because of this, the fastest route may be to partner with an existing cybersecurity firm as a means to cut down on the time it takes to ramp up,” she said.

Campbell remembers when he moved from Australia to the UK to help expand PwC’s cybersecurity practice.

“I think we started with a practice for like eight people—and then by the time I left, it was kind of 300-odd in the UK. So, quite a significant amount of growth in that period,” he said. “And there’s a number of other consulting firms out there who tried to do similar things, but with varying degrees of success. Some have done really well, and they’ve got a great brand in cybersecurity.”

For companies making the leap into security, Campbell noted that firms should identify their strengths instead of “trying to be an all-encompassing cybersecurity kind of practice.”

Echoing Campbell, Wong says the security industry isn’t “immune to challenges like burnout and layoffs” or other obstacles like “talent shortage” and “demand.”

“Ultimately, a pivot is a risky move for any company to make,” she said. “Cybersecurity is a rapidly growing industry but also one that is facing a lot of crucial challenges right now and has a host of established players.”

IT Brew reached out to Spirit and WiJungle for comment.