Census season in Australia has begun with the Federal Government and Australian Bureau of Statistics keen to avoid a repeat of Australia’s first online census in 2016 dubbed “Censusfail” after being hit by numerous cybersecurity attacks.

On the much-anticipated Census night of August 9, 2016, millions of Australians were locked out of the Census website with the online form crashing after a series of Distributed Denial-of-Service (DDoS) attacks, compounded by a hardware failure.

For security reasons the site was shut down for almost two days, with concerns data entered may have been compromised and the attack making headlines worldwide.

A Senate committee review placed blame on IBM for not meeting its contractual obligations in keeping the site up, and the ABS for putting too much trust in IBM.

Following the review vast resources, including $38.3 million in the Federal 2019 budget, have been thrown at rebuilding the system from the “ground-up” to avoid a repeat of “Censusfail” in 2021.

The site has been up since July 28 with official Census night on August 10. Households Australia-wide can complete the Census as soon as receiving a letter with their unique login ID in the mail.
 

Silver lining in 2016 Censusfail as investment fosters cybersecurity growth

However, it wasn’t just the ABS that received money to fix its cybersecurity woes. The Australian government also invested heavily to support the local cybersecurity sector to expand and promote their capabilities to the global market.

More money was put into research and development that responded to the needs of industry and government to ensure national security. Since 2016, the Federal Government has invested more than $230 million into cybersecurity initiatives with Australia’s Cybersecurity Strategy 2020 forecasting a spend of $1.67 billion over the next decade.

Among initiatives was establishment of the Australian Cyber Security Growth Network, AustCyber and the Cyber Security Cooperative Research Centre, along with increasing cyber skills and education investments.
 

Cybersecurity sector experiences rapid growth, outperforms other sectors

Australia’s cybersecurity sector is experiencing rapid growth and according to AustCyber, revenue is up $800 million since 2017 to $3.6 billion.

Sector revenue grew by an average of 8% annually between 2017 and 2020. In comparison, the information, media and telecommunications (IMT) sector’s revenue grew by 3% annually over the same period.

Australians spent approximately $5.6 billion on cyber security in 2020, from both local and international providers, with the figure expected to rise to $7.6 billion by 2024.

Around 350 providers now make up the domestic sector with the average age of companies 8.5 years. More than 40% of them have been founded in the past five years.

The workforce has grown by 4,000 since 2016, reaching approximately 26,500 people who either work for providers or staff internal security teams in businesses and government.

If Censusfail achieved anything, it’s helped us learn to take our digital privacy seriously.
 

Pandemic fuels further growth

ASX cybersecurity stocks were up 90% on average in 2020 as companies worked to rapidly increase their cybersecurity due to the COVID-19 pandemic and remote working. Businesses engaged various providers both listed and private to sort out their cybersecurity needs.

Here’s a list of all the ASX cybersecurity stocks and their performance:


 

Cybersecurity stocks to watch

Barclay Pearce’s Head of Trading Trent Primmer flagged defence and cybersecurity stocks as ones to watch, citing federal government spending plans in the sector and an enforced move to digital and remote working due to the pandemic.

There are plenty of small and mid-cap cybersecurity ASX-listed stocks worth watching.

Canberra-based archTIS (ASX:AR9), which designs and develops products, solutions and services for secure information sharing and collaboration continues to experience impressive growth.

The company, established in 2006, made headlines in February following an impressive 358pc revenue jump in H1 FY21. Since then archTIS’s strong growth has continued along with a steady rise in its share price as it becomes one of the leading cybersecurity software development firms on the ASX.

Founded in 2014, Family Zone Cyber Safety (ASX:FZO) has found traction in the US with its target market of schools and parents.

In June the internet safety company closed a $23m share placement to fund the acquisition of US company Net Ref and set it up with a capital buffer to pursue further deals.

Family Zone Cyber Safety continues to achieve steady growth with the share price up 44% in the past year.

As demand continues to rise for their product Tesserent Limited (ASX:TNT) stocks have risen 48% in the past year and look set to be on the upward trajectory for some time yet.

Established in 2015, Tesserent is a pure-play cyber-security stock, providing “Internet Security-as-a-Service” for a customer’s computer infrastructure.

The company is the largest provider of cybersecurity services to the Australian Federal Government, providing a one-stop shop for a full, end-to-end cybersecurity solution which includes cyber strategy consulting and digital forensics.

Senetas Corporation (ASX:SEN) is another cybersecurity company standing out from the crowd with Votiro, its subsidiary owning the software tools that protect against malware and ransomware attacks.

Founded in Israel, Votiro has developed technology that claims to have the ability to proactively eliminate all known and unknown threats hidden in files.

According to Senetas, Votiro’s secure file gateway is the only SaaS-based file security solution that ensures all files coming into an enterprise are safe from malware threats and particularly ransomware.

While its share price has taken a bit of a hit of late, WhiteHawk (ASX:WHK) has been a strong performer in the cybersecurity stocks over the past 12 months, returning around 114% to shareholders.

Founded in 2015, WhiteHawk is the first global online cyber security exchange marketplace and offers an online tool that enables small and midsize businesses to take immediate action against cybercrime, fraud, and disruption.

The US government, manufacturing and defence companies are among its impressive client base, with its Cyber Risk Scorecards also now up for sale on Amazon Web Services.
 

Outlook for cybersecurity sector growth strong

RMIT University cybersecurity expert Professor Matt Warren told Stockhead while the 2016 Census was a disaster, a lot has changed in five years and while time will only tell what happens with this year’s Census, future growth for Australia’s cybersecurity sector is looking strong.

“We are going to see development of a more established cybersecurity ecosystem where you have start-ups growing larger or being bought out like we’ve seen of recent times with SecureWorx who got bought out by EY (Ernst and Young),” Warren said.

“Unfortunately, we still have a skill shortage in cybersecurity, but the Federal Government and industry is investing to fix that problem.

“Australia is facing new geo-political issues and new cybersecurity challenges so there will continue to be a need and heavy investment in the sector.”