The Wall Street Journal reports that private cyber security companies received a record amount of investments – $1.77 billion – as venture capitalists looked to get a slice this growing sector.
Why the rush to invest in cyber? Consider this:
- Given the number of high-profile data breaches, investors anticipate that cyber security will be a growing industry over the next few years.
- Trends predict significant growth in cyber security as many companies currently underinvest in their security.
Let's look at what IT consultants should know if they want to offer more InfoSec services.
How IT Consultants Can Get in on Security
You're more likely to come across clients who want to invest in cyber security, so it may be time to build up your expertise in InfoSec and market these skills.
As we reported in "Cyber Security Now an Executive Concern," after Target, Home Depot, and other companies were hacked, many boards are instructing their companies to increase their focus on security. To connect with these new clients, you'll have to market your security expertise as value you can add to the project – a value that other IT contractors don't necessarily have.
But let's say you're far from a security expert – how do you tap into this market? One strategy is to network with security professionals. If you can pair up with a security professional and offer complementary services, you might be able to get a piece of the pie and build up your InfoSec résumé.
Adapting Your Risk Management Strategy to a New Market
When your business expands into new markets, it's good news. You're diversifying your client base and potentially finding new and stable sources of income. But these expansions come with risk.
We suggest reviewing your risk management strategy to make sure it's up to the task. IT consultants should look into Errors and Omissions Insurance to protect their small tech business. Even if you already have a policy, you'll need to:
- Ensure your E&O Insurance can still cover your liabilities if you're adding services or shifting into new markets.
- Check to see if your E&O includes third-party cyber liability coverage in case you're sued over a data breach or security incident.
If a client's data is hacked, you could be liable for the data breach. Disgruntled clients may pin the blame on you if the software you installed fails to stop a breach. While that may seem unfair, it doesn't change the fact that you'll need to be prepared for the financial risk that can come with a lawsuit.
Be Ready for Growth, Be Ready for Risks
You've probably had to respond to your clients' renewed concerns about their security. To be prepared as the industry shifts toward security, keep these things in mind:
- InfoSecurity is poised to grow steadily over the next few years.
- IT consultants should expand their repertoire to include these services and market their expertise.
- This new sector introduces new financial risks.
If you have any questions about your IT risk management, talk with a TechInsurance agent.