Penetration Testing Market

Penetration testing, also known as pen testing, is a process used to evaluate the security of a computer system or network by simulating an attack from a malicious hacker. The objective of a penetration test is to identify vulnerabilities and weaknesses in the system that could be exploited by attackers to gain unauthorized access, steal sensitive data, or cause other types of damage.

Penetration testing is an essential part of any comprehensive security program. It helps organizations identify potential security risks before they are exploited by attackers. This, in turn, helps organizations take proactive steps to mitigate those risks and improve their overall security posture.

The process of penetration testing typically involves several stages. The first stage is reconnaissance, which involves gathering information about the target system or network. This information can include IP addresses, domain names, and other publicly available information that can be used to identify potential vulnerabilities.

Once the reconnaissance phase is complete, the penetration tester will attempt to gain access to the target system or network using a variety of techniques, such as brute force attacks, social engineering, or exploiting known vulnerabilities in software or hardware. The goal of this phase is to identify any weaknesses or vulnerabilities that could be exploited by attackers.

Once vulnerabilities are identified, the penetration tester will attempt to exploit them in order to gain unauthorized access to the system or network. This may involve stealing sensitive data, planting malware, or causing other types of damage.

Finally, the penetration tester will provide a detailed report that outlines the vulnerabilities that were identified, the methods used to exploit them, and recommendations for remediation. This report can be used by organizations to prioritize security improvements and make informed decisions about their security investments.

Penetration Testing Market Dynamics

Drivers in Penetration Testing Market

The Penetration Testing Market is driven by various factors, including the increasing sophistication of cyberattacks that result in financial and reputational losses for organizations. The number of cyberattacks has grown dramatically, with hackers exploiting technologies such as AI, ML, and analytics to increase the sophistication of cyberattacks. Sophisticated cyberattacks often go undetected, and even if detected, they take more time to remediate, leading to significant financial losses. Organizations lack cyber preparedness, creating ways for cyberattacks to be successful, and cybercrime is moving toward becoming a profit-driven industry. State-sponsored actors and various hacking groups execute financially or politically motivated cyberattacks, leading to the cost of a data breach increasing. Prevention of cyberattacks is vital, driving the need for penetration testing across organizations of all sizes.

The COVID-19 pandemic has also led to an increasing threat of cyberattacks, with the surge in demand for advanced digital infrastructures during the pandemic leading to employees using their personal devices to access company networks and data, creating exploitable vulnerabilities for cyberattacks. The trend of Work From Home (WFH) has increased the need for penetration testing, and the adoption of digital transformation by businesses has led to opportunities for cyberattacks. The demand for penetration testing has surged during the forecast period, and the adoption of hybrid working models could further increase the need for penetration testing in the future.

The high adoption of cloud computing solutions and services and an increasing number of data centers are boosting the growth of the global penetration testing market. Stringent government regulations to increase the adoption of penetration testing solutions and services positively impact the growth of the penetration testing market. However, the lack of skilled security professionals and high implementation costs are hampering the growth of the penetration testing market. Nevertheless, the increasing popularity of PTaaS and security assessment for remote workers is expected to offer remunerative opportunities for the expansion of the penetration testing market during the forecast period.

Restraints in Penetration Testing Market

High Costs Associated with Penetration Testing

The charges for top-quality penetration testing can vary widely depending on factors such as the size of the organization, the complexity of the testing required, the expertise of the testers, and the cost of remedial measures. Many businesses, particularly small and medium-sized enterprises (SMEs) with limited cybersecurity resources, may not be able to afford these fees and may end up conducting penetration testing less frequently than necessary. For instance, an SME may conduct penetration testing only once every two years, even if regulations require it to be done annually. This cost of conducting penetration testing may therefore act as a limiting factor for market expansion.

Opportunities in Penetration Testing Market

Increasing Popularity of PTaaS and Security Assessment for Remote Workers

The shift towards penetration testing-as-a-service (PTaaS) is gaining popularity in the cybersecurity sector. With PTaaS, IT specialists can conduct ongoing penetration testing and respond to any vulnerabilities that are detected. This cyclical process of testing and remediation helps to counter the changing security posture of the organization. Moreover, PTaaS providers offer continuous security management, regular vulnerability scanning, and automated track change functionality to ensure traceability of application security enhancements.

Following the COVID-19 pandemic, many companies around the world have adopted a paradigm of cloud-based remote work. This has created opportunities for remote security assessments to safeguard the increasingly popular remote working environments. Industry insiders predict that even after the pandemic has passed, many organizations will continue to embrace the work-from-home approach, thereby creating numerous opportunities for PTaaS and remote working security assessments.

The data center sector is also experiencing growth opportunities due to the increasing volume of data being consumed and digitized operations of many companies. This has resulted in a need for data centers to collect and secure large amounts of data during the pandemic, thereby driving the growth of the penetration testing market.

Challenges in Penetration Testing Market

The biggest challenge faced by businesses today is the shortage of skilled security professionals who can conduct effective penetration testing to meet the constantly evolving cybersecurity demands. Many companies hire individuals to scan and identify potential cyber threats, but these employees often lack the necessary expertise to prevent attacks. The cost of conducting proper penetration testing is high, and if it is not done accurately, it can lead to financial losses for service providers and their clients.

According to a report by (ISC)²'s Cyber Workforce in 2021, the global cybersecurity workforce needs to increase by 65% to effectively defend critical assets of organizations. While the number of professionals needed to bridge this gap has decreased, the shortage still leaves organizations exposed and vulnerable to cyber attacks.

To address this shortage of skilled security professionals, there is a need for proper and improved training programs that can provide the necessary expertise for identifying and analyzing cyber attacks. This will help fill the gap and ensure that organizations are better equipped to defend themselves against potential security threats. By investing in the development and training of skilled security professionals, businesses can enhance their overall cybersecurity posture and mitigate the risks associated with cyber-attacks.

The penetration testing market is divided into two main segments based on offerings: software and services. Penetration testing services involve professionals monitoring or examining a system and providing a proof of concept for each finding in detail, along with a remediation plan. This service segment offers advantages such as cost-effectiveness, scalability, and the assistance of security experts, which have fueled the demand for pen testing services across businesses of all sizes. The services segment is predicted to experience the highest Compound Annual Growth Rate (CAGR) during the forecast period, mainly due to the outsourcing of professional services to emerging markets and globalization.

The penetration testing market is also segmented based on deployment mode into on-premises and cloud-based. The on-premises deployment mode offers control and flexibility to organizations, which is why large enterprises in various verticals prefer this mode. On-premises deployment is suitable for large organizations that are highly regulated and contain more sensitive information than Small and Medium Enterprises (SMEs). Furthermore, with the increased volume of data transfer among business parties, there is a higher risk of cyberattacks and data losses, and on-premises deployment of penetration testing software and services reduces such risks. Thus, the on-premises deployment mode has the highest market size during the forecast period.

The healthcare sector is anticipated to experience the highest compound annual growth rate (CAGR) during the projected period, as per recent market research. The increased reliance on technology in the healthcare sector has led to a rise in cyberattacks. Healthcare institutions often store thousands of patients' protected health information records, making them vulnerable to cyberattacks. Furthermore, the traditional culture of healthcare institutions that neglects cybersecurity solutions for infrastructure exacerbates the situation. Due to multiple attack channels, it may be difficult to assess risks to a specific environment. The healthcare industry is heavily regulated, and healthcare organizations incur significant penalties for violating regulations. These rules and guidelines are critical in the healthcare industry's adoption of penetration testing solutions and services, which aid in the prevention of such cyberattacks.

North America is one of the regions that strictly adheres to numerous laws and compliances such as the Federal Energy Regulatory Commission, HIPAA, PCI DSS, and SOX. The North American region dominated the penetration testing market size in 2021 and is expected to maintain its position in the forecast period. The rise in adoption of advanced technologies such as cloud technology, big data, artificial intelligence, and machine learning for automation across industries contributes to this growth. However, the Asia-Pacific region is expected to witness a substantial growth rate during the forecast period, with increased awareness of penetration testing and the adoption of cloud-based security testing by SMEs in the region.

Dominating Companies in Penetration Testing Market

• RAPID7
• SECUREWORKS
• SYNOPSYS
• CROWDSTRIKE
• IBM
• COALFIRE LABS
• INDIUM SOFTWARE
• CIGNITI TECHNOLOGIES
• TRUSTWAVE
• CISCO SYSTEMS
• FORTINET
• BUGCROWD
• INVICTI
• HACKERONE
• RAXIS
• RSI SECURITY
• RHINO SECURITY LABS
• SCIENCESOFT
• PORTSWIGGER
• NETRAGARD
• SOFTWARE SECURED
• VUMETRIC CYBERSECURITY
• NETTITUDE
• ZIMPERIUM
• NOWSECURE
• SECURITYMETRICS
• NETSPI LLC
• COVERTSWARM
• HOLM SECURITY
• INTRUDER SYSTEMS
• BREACHLOCK
• ISECURION
• REDBOT SECURITY
• Astra Security
• Vairav Technology

Recent Developments in Penetration Testing Market

• In 2021, SecureLayer7, an Indian cybersecurity firm that specializes in penetration testing, was acquired by Cognizant. The acquisition was aimed at enhancing Cognizant's cybersecurity capabilities and expanding its global reach.
• In 2020, the UK-based cybersecurity company, NCC Group, acquired the US-based software security firm, Intrepidus Group. The acquisition was intended to bolster NCC Group's penetration testing and application security services.
• In 2019, the cybersecurity firm, FireEye, acquired Verodin, a provider of security instrumentation services. The acquisition was aimed at expanding FireEye's penetration testing capabilities and enhancing its ability to validate the effectiveness of security controls.
• In 2019, the UK-based cybersecurity company, Positive Technologies, announced a partnership with NRI Secure Technologies, a leading provider of cybersecurity services in Japan. The partnership was aimed at providing Japanese businesses with access to Positive Technologies' advanced penetration testing services.
• In 2018, Accenture acquired Redcore, an Australia-based cybersecurity company that specializes in penetration testing and vulnerability management. The acquisition was aimed at expanding Accenture's cybersecurity capabilities in the Asia-Pacific region.
• In 2021, Rapid7, a cybersecurity company that offers vulnerability management and penetration testing services, announced its acquisition of IntSights, a provider of threat intelligence and external threat protection solutions. The acquisition was intended to strengthen Rapid7's capabilities in the area of threat intelligence and enhance its ability to identify and respond to emerging threats.
• In 2020, Palo Alto Networks, a leading provider of cybersecurity solutions, acquired Expanse, a provider of internet asset discovery and management services. The acquisition was aimed at enhancing Palo Alto Networks' ability to identify and mitigate risks associated with external-facing assets, including vulnerabilities that could be exploited through penetration testing.
• In 2019, SecureLink, a European provider of managed cybersecurity services, acquired Nebulas, a UK-based provider of cybersecurity solutions including penetration testing. The acquisition was aimed at expanding SecureLink's presence in the UK and strengthening its capabilities in the area of penetration testing and vulnerability management.
• In 2019, Cognizant acquired Advanced Technology Group (ATG), a US-based provider of customer and revenue management consulting services. ATG also offered a range of cybersecurity services including penetration testing and vulnerability assessments. The acquisition was aimed at expanding Cognizant's capabilities in the area of digital transformation and enhancing its ability to help clients manage and mitigate cybersecurity risks.
• In 2018, Telos Corporation, a US-based provider of cybersecurity solutions, acquired Diamond Fortress Technologies, a provider of mobile app security and penetration testing services. The acquisition was aimed at enhancing Telos' capabilities in the area of mobile app security and helping its clients to address the growing risks associated with mobile devices and applications.

Overall, penetration testing is a critical tool for ensuring the security of computer systems and networks. By simulating attacks and identifying vulnerabilities, organizations can proactively improve their security posture and reduce the risk of successful attacks by malicious hackers.