Tesserent welcomes Aussie cyber security strategy overhaul, says $7 billion market is only going to grow

Labor Government is overhauling SchMo’s 2020 Cyber Security Strategy
Cyber security stock Tesserent says the Aussie market is worth $7bn and shows no signs of slowing down
The new strategy is likely to focus on addressing the skills shortage in the sector

The Albanese government has announced plans to overhaul Scott Morrison’s $1.7 billion 10-year cyber security strategy, which kicked off in July 2020, barely months after the pandemic started.

Now, two and a half years in, the situation has changed – more employees are working from home than ever before, and more companies are exposed to cyber-attacks.

In fact, the Australian Cyber Security Centre (ACSC) says in the last financial year it received more than 67,500 cybercrime reports, or one incident every eight minutes.

And since Russia’s invasion of Ukraine and Chinese military drills off Taiwan, there has been an uptick in malicious cyber activity.

So, it makes sense there’s a new cyber security strategy in the works that aims to boost sovereign capability and build a frontline cyber workforce.

Tesserent (ASX:TNT) is one of the largest cyber consultants to federal government and CEO Kurt Hansen says improving the sovereign capabilities of our cyber defence and offensive activities is only a good thing.

“This isn’t just about politics with a new government coming in, if this was a normal business, refreshing of that strategy would be the right thing to do.

“At the start of the pandemic I don’t think we realised the full impact of how working from home was going to impact business.

“We used to have to evangelise cyber security to boards and businesses, raise awareness and convince companies to set some budget aside, and all of a sudden, we don’t have to anymore.

“The culmination of that was seeing outgoing Telstra chief Andy Penn talk about that we need to be embedding cybersecurity in every facet of our business, in finance, in HR, in technology development.

“We don’t know exactly what the refreshed strategy will be yet, but I think it’s only going to be positive for not just us, but the whole industry.”

Cyber security a $7 billion market

Hansen also flagged that cyber is a massive market for Australia, and growth isn’t expected to slow down anytime soon.

“Cyber is $139 billion market globally, and it’s touching $7 billion here in Australia,” he said.

“We’ve reported in our 4C that our turnovers are about $163 million, so we’ve got a sizeable chunk now of it, but that market is growing at two Tesserents a year, just in Australia.”

While he didn’t want to use the term recession-proof, Hansen did say he doesn’t think there’s any government or commercial organisation in the world that’s going to spend less on cyber next year, “irrespective of what the economic situation is”.

“I think cloud and cybersecurity and IT are probably assured that they’re going to keep growing,” he said.

Cyber security has never been more critical. Last year, there were more than 67,500 reports in Australia – that’s one incident reported nearly every eight minutes.

That’s why our Government has made keeping Australians safe online a national priority.

— Clare O’Neil MP (@ClareONeilMP) August 30, 2022

Addressing skill shortages will be key

The original strategy predates quite a few changes in the last few years, with people working from home, and the skill shortage which has become even more acute with the lack of immigration.

Hansen said the plan was to add 1900 people to the Australian Signals Directorate (ASD) which is all well and good, but like any cyber business they have churn (staff turnover). So where are these staff going to come from?

“That’s something we’d like to see in the strategy around how to execute that,” he said.

The government is looking to focus on educating school-age children to improve pathways for younger Australians to enter the cyber workforce, as well as introducing new apprenticeships and re-skilling mature-aged workers to encourage tech career transitions.

“Minister for Home Affairs and Cyber Security Clare O’Neil said she wants to weave cyber security into the core national capability, which goes back to I think what Andy was also saying around skills, that we want more cyber education in all disciplines of education,” Hansen says.

“And [the Government] has actually gone to industry and individuals to gain capability, whereas previously, that would be the people sitting inside the concrete walls in Canberra doing offensive cyber stuff.

“As the leading fully sovereign cyber security organisation in Australia and New Zealand, Tesserent is well placed to be part of any ramp up by the new Federal Government of cyber capability.”