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Have you experienced ‘Tool Sprawl’ in Cybersecurity?We recognise we have a diverse array of readers, probably some individual business owners, some employees of large companies, some employees of smaller companies and possibly even some people who are retired or between jobs. Whatever your situation—how many different cybersecurity tools are you aware of that you interact with? A password manager? A single-sign-on interface? A specialist tool focused on email? Another specialist tool focused on accessing a cloud computing infrastructure? The fact of the matter is that the more you learn about cybersecurity, the more you are awakened to a large number of providers that each specialise in different types of protection. We saw the term ‘tool sprawl’ used to describe the 2022 cybersecurity landscape—we thought it painted an informative picture1. How many tools are customers using? Enterprise customers may be managing portfolios of 60-80 tools, with those on the extreme higher end of the spectrum possibly managing up to 1402. Imagine managing all of these tools over the course of a normal business operation. One reason why the current environment is characterised by so many tools could relate to the progression of the Chief Information Security Office (CISO) role. 10 years ago, the way a ‘good CISO’ was defined largely had to do with buying and deploying tools. The CISO in 2022 is now much more a top priority for a company’s board and C-suite, and now a ‘good CISO’ is evaluated based on outcomes rather than deploying tools3. A survey conducted by Gartner found that 88% of Boards of Directors view cybersecurity as a ‘business risk’ rather than a ‘technology risk4.’ Of course, the attack surface in 2022 has also massively expanded, and frequently companies may be launched around new types of artificial intelligence and machine learning techniques, to use one example that could also lead to the proliferation of companies. Dealmaking is already taking off in 2022 Through 18 August 2022, private equity sponsors and their portfolio companies have backed 162 cybersecurity deals worldwide, valued at $34.9 billion. If this pace continues, it could surpass 2021’s tally of $36.4 billion across 308 transactions5. One driver—valuations. 2020 and much of 2021 saw the most newly public cybersecurity companies, many of which were focused on the cloud, experience massive multiple expansion and therefore premium valuations. The growth was strong, but the prices were not inexpensive in an environment where the cost of capital had been very low for a very long time. With the rise of inflation and then the shift in policy of many central banks going from expansionary support of growth, many of these companies experienced dramatic multiple compression. This allows private equity players focused on building consolidated product offerings to pick up interesting companies at much lower prices. Thoma Bravo is one such player that has been quite active. Just in the identity space, Thoma has done deals to acquire Ping Identity for $2.8 billion and SailPoint for $6.9 billion6. Consolidation is a big desire from customers—possibly a response to the ‘tool sprawl’ that we mentioned earlier. There is a feeling in the market that there might already be too many companies, so it’s not just about more innovation but also building integrated platforms so customers can go to one place and get more services. Option3 is an example of a firm that has shifted from funding new firms to acquiring late-stage middle-market companies for buy-and-build strategies. They are planning to raise a $250 million buyout fund dedicated to a platform acquisition strategy7. Private equity firms are attracted to cybersecurity companies for many reasons, but it is noted that they have exhibited lower churn rates than other Software-as-a-Service (SaaS) businesses. They also have tended to generate high margins. What about the slowing economic environment? As is the case with many things, historical comparisons can only take us so far. If we think about the state of cybersecurity in 2007-2009, encompassing the ‘Great Recession’, it was totally different. Cybersecurity budgets are much different in 2022 than they were in 2007 heading into that significant slowdown8. One doesn’t need to look too far to see quotes from experts indicating that even if cybersecurity spending could be impacted by a slower economic environment, it most likely wouldn’t be as impacted as other areas. There are many things that are regulatory requirements or viewed as ‘table stakes’ to the ongoing operation of companies, which make them that much more difficult to cut. Regulators are also upping the ante. The Securities and Exchange Commission in the US has explored a rule that would require disclosure of a ‘material cybersecurity incident’ in a public filing. Disclosure would also have to be quite quick after the event—possibly a response to certain types of attacks and breaches like SolarWinds, where months after the fact the scope of potential damage was growing and growing9. Even if regulators do not mandate spending more on cybersecurity, their pursuit of certain types of rules would be likely to have that impact. Conclusion: a megatrend for all seasons? Norges Bank Investment Management, the world’s largest sovereign wealth fund at $1.2 trillion, recently indicated that cybersecurity is their biggest current concern, citing that it faces an average of three serious attacks each day. The fund sees roughly 100,000 attacks per year, and they classify about 1,000 of them as serious10. Firms operating in the financial industry have been increasingly targeted, and firms operating in the Nordic region feel the proximity to Russia during the Ukraine conflict quite tangibly. While many investment themes might be a bit discretionary or susceptible to delays in a slowing economic environment, cybersecurity is not one of them. We may not know the exact companies or services that will grow the fastest but backing away from focusing on security is not an option. Sources 1 Source: Alspach, Kyle. “Thanks to the economy, cybersecurity consolidation is coming. CISOs are more than ready.” Protocol. 17 June 2022 2 Source: Alspach, 17 June 2022. 3 Source: Alspach, 17 June 2022. 4 Source: “Gartner Survey Finds 88% of Boards of Directors View Cybersecurity as a Business Risk.” Gartner. Press Release. 18 November 2021. 5 Source: Shi, Madeline. “PE dealmaking thrives in cybersecurity sector.” Pitchbook. 23 August 2022. 6 Source: Shi, 23 August 2022. 7 Source: Shi, 23 August 2022. 8 Source: Alspach, Kyle. “Cybersecurity spending isn’t recession-proof. But it’s pretty close.” Protocol. 6 June 2022. 9 Source: Alspach, Kyle. “’Game-changer’: SEC rules on cyber disclosure would boost security planning, spending.” VentureBeat. 10 March 2022. 10 Source: Klasa, Adrienne & Robin Wigglesworth.” Financial Times. 22 August 2022.
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by aneekaguptaWTE
Missiles attack, plane crash, earthquake and ADP dataYesterday was oversaturated and accordingly super volatile. Although it is worth noting that the strength of the counter-movements significantly exceeded our expectations. On days like yesterday, traders either make a fortune or (which happens much more often) lose their deposits. Often the reason for the loss of the deposit is excessive greed on the one hand and disbelief in their own positions on the other. For us, yesterday’s events mean that even better entry points have appeared on the market. And that means opportunities for even greater earnings. But first things first. Yesterday began with news of Iran’s missile attacks on US military bases in Iraq. Gold and oil on such news naturally rushed up. The markets were preparing for an immediate US response: Trump's 52 goals - that’s all. But no action followed. Trump tweeted “keep calm,” and then also made a public statement in which he made it clear that the United States was not going to further escalate the conflict, at least militarily. As a result, investors rushed to lock profits. True, they were obviously carried away, since the fixation clearly turned into the opening of counter-positions. As a result, gold after the 1610 test fell to the key support area of 1550. Although it looked strange, it was only a great opportunity to buy cheaper. Actually, we wrote about this in our review yesterday. That is, gold could theoretically reach 1550 and it reached. Yes, it looked almost unbelievable, but in terms of the logic of key levels, it was generally logical. So, we repeat, while gold is above 1550 - only purchases, only forward. In general, most of the news yesterday had Iranian roots. The crash with many casualties on take-off from Tehran immediately after attacks on US military bases unwittingly suggests that a passenger plane could become a victim of either an Iranian air defense or a terrorist attack. Too converge events in time and place. Add to this a rather strong earthquake in same Iran, and even near the nuclear power plant, and we get such a jackpot. In general, we strongly recommend that you refuse to buy the Iranian real or the Iranian stock market. But back to the economy. US employment data from ADP presented a gift to buyers of the US dollar and the US stock market: +202K with a forecast of +160K inspire serious optimism on the eve of the publication of official statistics on Friday. However, the correlation between ADP and official data is very weak, albeit positive, so for now we continue to see in the growth of the dollar is not a threat, but an opportunity. The opportunity for its sales is more expensive. So today we will continue to look for points to open short positions on the dollar. First of all, against the Japanese yen. Everything that is happening in the world plays into the hands of only safe havens. It is hard to imagine that such a positive and relaxing thing should happen in the world so that the level of anxiety and tension would drop sharply. This means that we will continue to buy gold today. In terms of macroeconomic statistics, today will be a day of respite before Friday and data on the US labor market, so no surprises should be expected in this regard.
FOREXCOM:XAUUSDLong
by Trade24Fx
Attack on tankers, game of thrones of Britain & trading ideaAccording to media reports an oil tanker turned into a fireball after a suspected torpedo attack off the coast of Iran. A second tanker was said to have been targeted by a magnetic mine in a series of explosions. Oil rushed up as we expected. However, we consider this growth an opportunity for sales at a higher price. Considering that this week oil reserves in the United States have risen to its maximum value amounted 485.47 million barrels since July 2017. In general, over the past 3 months, oil reserves in the United States have shown a weekly growth rate of 10 times. The race to be the next British prime minister stared yesterday. Conservative MPs will now take part in a series of votes to whittle the candidates down to the final two. Any candidate who fails to secure at least 17 MPs' votes will be eliminated from the contest. Further ballots will be held next week, with the two most popular MPs moving to a run-off of Tory party members. Boris Johnson topped the ballot in the first round of voting (received more than 100 votes). His closest competitors, Jeremy Hunt(Secretary of State for Foreign and Commonwealth Affairs, and Michael Gove( Secretary of State for Environment, Food and Rural Affairs), received 43 and 37 votes. As you can see, the most likely winner is Boris Johnson. His position is more than tough - Brexit at any price. So, the pressure on the pound is likely to increase. In this regard, we will focus on finding points for selling pounds. Friday will be quite a busy day in terms of macroeconomic statistics. First of all, we are talking about the data on retail sales and industrial production in the United States, as well as the University of Michigan Consumer Confidence Index. In addition, attention should be paid to similar statistics from China. If the economy shows signs of a worsening economic halt (which is very likely), the forecast from Paul Tudor Jones is at least a step closer to its implementation. In a recent interview with the investment fund founder“Tudor Investment Corporation” and one of the best investors of our time Paul Tudor Jones. Gold is his favorite pick in the next 12 to 24 months. If it hits $1,400, it will quickly move to $1,700, he said. Motivation - US rates are likely to return to zero values again, and the trade war will slow down the development of the world economy. Our trading preferences for today are as follows: we will continue to look for points for the sales of the US dollar primarily against the Japanese yen, as well as the euro, sales of oil and the Russian ruble, as well as buying of gold and sales of GBPUSD.
Short
by Trade24Fx
EURUSD Brussels Attack Caution - H4 bullish divergence RSIEURUSD Brussels Attack Caution Just a short technical assessment: I see maximum downside risk for the EURUSD-0.31% at around 1.1150, which is 0.38 fib support, upper ichimoku cloud and bottom of march uptrend channel despite a strong H4 bullish divergence in the RSI On the upper end we could see a move to go through 1.13 levels and finally knock out 1.14. Be cautious! This is a grandchess day. Whenever this happens, the major players on this planet make their moves! Don't trust the media! Cheers, SinatraFX
Long
by SinatraFX
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