Tech Track 100: Emerging trends lead to the growth of a new risk
September 9th, 2014
The 2014 Sunday Times Hiscox Tech Track 100 sees high growth for a number of cyber security firms. This trend affects businesses big and small.
One of the more fascinating aspects of the annual Sunday Times Hiscox Tech Track 100 list is spotting the trends: identifying which sub-industries are performing particularly well, following the progress of those businesses who’ve outgrown the list and mapping both against wider developments in the tech and business world.
One type of business that has long featured on this league table are computer programmers, who protect individuals and businesses from the more unsavoury side of the internet.
The likes of MessageLabs, Sophos, and Kaspersky Lab all recorded rapid growth as their services were adopted by consumers, companies, and governments to fight-off security threats.
These three former Tech Track 100 stars have now grown into substantial businesses – Sophos with £247m in sales, Kaspersky Lab at £376m, while MessageLabs was acquired by US giant Symantec in 2008 for around £400m.
The cyber risk to businesses big and small
But what does that trend mean for smaller business? In basic terms, that growth will continue as cyber crime is a growing threat. A recent report by the US Center for Strategic and International Studies estimated that cyber crime takes as much as 20% of the estimated £1.5 trillion generated by the internet economy globally each year.
Closer to home, the facts are starker. The government-backed, business-led Cyber Security Information Sharing Partnership shares details on 215,000 abused IP addresses every day. In addition, our latest annual DNA of an Entrepreneur study of 3,500 small businesses across six countries, published last week, showed concern about cyber crime among those studied has doubled in just a year. In Britain alone, 17% of those surveyed expressed concern, up from 5% last year.
As a specialist insurer, we’re now seeing firsthand that companies are increasingly recognising the threat they face and are looking for ways to reduce this risk, while the British government has said the protection of computer networks is a national security priority, ranking alongside the threat posed by terrorism, and is increasing funding to tackle it.
Whether it’s the government, a tech giant or a business with just a handful of employees, they are right to be concerned. “The world of cybercrime is incredibly fast paced and becoming more sophisticated by the day”, says Mark Austin, co-founder and CEO of Avecto, which is ranked at No. 100 in the Tech Track list this year. The Cheshire firm provides software to its 500 customers around the world designed to protect data, restrict downloads of harmful software and provide secure internet connections for staff working remotely.
Firms should prepare for the unknown, Austin says. “To overcome modern threats, the challenge for enterprises is to prioritise those technologies and behaviours that are most effective at preventing unknown attacks, rather than relying purely on blocking known viruses and malware.”
Preparing for the future
The embarrassing nature of the crime means it often goes unreported. One unidentified London company incurred losses of £800m in an attack, the UK security services revealed a few years ago. Victims don’t just suffer lost revenues. They face damaged reputations, legal costs and business disruption.
Regulators around the world take a dim view of companies that lose sensitive data. Our Head of Technology and Data, Matthew Webb, has already highlighted the case of Wembley-based loans firm Jala Transport on this blog, for example.
Clearly innovative responses are needed, and we as insurers have a commitment to support the burgeoning tech sector. For us, part of that support comes from our involvement in Tech Track 100 – celebrating companies that have contributed to pulling the economy out of recession and into a period of growth.
The listing should give us and the next generation of companies confidence that Britain’s tech scene is in rude health and will produce more substantial companies like MessageLabs, Sophos and Kaspersky Lab in the future.
Read more stories and analysis from Hiscox’s Head of Technology and Data Risks Matthew Webb and previous Tech Track companies here.