Market Overview

Cybersecurity Firms Are Ready To Fight For Government Contracts

Cybersecurity Firms Are Ready To Fight For Government Contracts

Cyber attacks have become one of the largest threats to U.S. security, as more of the nation's infrastructure has become dependent on the Internet. High profile hacking attacks against major companies and government agencies have been on the rise this year, leading the Pentagon to look for ways to prevent major security breaches moving forward.

This week, the Defense Department announced that is planning to focus heavily on cybersecurity measures designed to prevent attacks on U.S. weapons systems.

At The Federal Level

Assistant Secretary of Defense Katrina McFarland told Reuters that the Pentagon is working on a guidebook that will help program managers weigh out the costs and risks associated with the security of new weapons programs.

Related Link: Hacking Fears Boost Cybersecurity Shares

The Defense Department is also planning to announce new rules regarding acquisitions in order to promote data sharing and reduce the risk of being infected by malicious software.

Good News For Cybersecurity Firms

Increased focus on cybersecurity is likely to give big names that already have contracts with the Pentagon a boost this year. Lockheed Martin Corporation (NYSE: LMT) and General Dynamics Corporation (NYSE: GD) are already on the payroll as cybersecurity providers and will probably rush to meet this need.

More Bang For Your Buck

However, there is a lot of talk in Washington about ensuring the government gets what it is paying for. Many worry that big companies don't have the specialized experience necessary to protect against the growing array of cyberthreats.

Raytheon Company (NYSE: RTN) has been preparing for the shifting focus toward cybersecurity since 2007. In 2008, it acquired smaller cybersecurity firms Oakley Networks and SI Government Solutions to give it a better foothold in the online security field.

Consultants Name Drop

Consulting firms are also bidding for a piece of the government's cybersecurity spending pie. Booz Allen Hamilton Holding Corporation (NYSE: BAH) has a great deal of experience in this space and boasts a senior executive, Mike McConnell, who serves on President Obama's Intelligence Advisory Board.

Deloitte Consulting is also making a play for government contracts by adding some big names in the cybersecurity community to its payroll.

Image credit: Colin, Wikimedia


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