Measurement & Instrumentation

Lockheed Martin to acquire Industrial Defender - Industrial Cyber-security market heats up

by Muthuraman Ramasamy 14 Mar 2014
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Cyber-security was an unknown business driver a few years back. The recent attacks and the possibility of a 'cascading failure' due to cyber-attacks on networks and industrial control systems has made cyber-security a 'must-have' solution for systems security purposes. The market initially had niche and pure-play solution providers like Industrial Defender, Wurldtech, Waterfall Security Systems, etc. Progressively, the market observed the entry of enterprise solution providers like Intel (post acquisition of McAfee and NitroSecurity), IBM (post acquisition of Q1 Labs), Belden/Hirschmann's acquisition of Tofino Security and such others. 

As Homeland Security released the Presidential Policy Directive 21 (PPD-21): Critical Infrastructure Security and Resilience, 16 critical infrastructure sectors were identified. Out of the 16, the process and discrete manufacturing related industries were:

1. Chemicals

2. Critical Manufacturing Sectors (Primary metal manufacturing, Machinery manufacturing, Transportation equipment manufacturing)

3. Energy

4. Food and Agriculture

5. Nuclear Reactors

6. Water and wastewater

The framework signed into order by President Obama requires monitoring agencies to publicly report threats to companies and facilities in the US. Also, the framework provides a guidance to audit current facilities and implementation best-practices. However, at this juncture - there is no prescriptive approach of technology usage. This means, end-users can prefer their own use of technologies and implement it. Hence, it clearly opens up the market of opportunities for cyber-security solution providers. Of all the infrastructure security market constituents, cyber-security market is expected to offer the highest growth and the best-possible opportunity in the short-medium time frame.

What this means to the industry?

As Lockheed Martin intends to acquire Industrial Defender and finalize it over the next 30 days, many other defense firms like would likely enter this market with innovative solutions and services. However, the current product capabilities may be over-robust in features and functionality, that it may not meet the cost-point's of industrial-grade end-users. So, there needs to be definitive strategy in entering the market.

Issues with Partners of Industrial Defender

Currently, the listed partners are ABB, Schneider Electric Corporation, Itron and Elster. Only, time would tell on how these relationship's would turn out to be. As there would be a clear conflict of interest, these relationships may not be maintained or maybe maintained to continue the robust go-to-market channels for Industrial Defender. 


Clearly, this market is of intense interest to several solution providers in the market. As cyber-security mandates cement its footing in the industry, value-consulting services could be the inital strategy to pull through products, solutions and value-added services.

As the cyber-security creates opportunities for industrial facilities, there needs to be a clear understanding of the following:

1. How is the market landscape evolving and what are the industry drivers and motivation?

2. What are the current competitive differentiations of the present solution providers?

3. How do customer's buy cyber-security solutions currently?

4. What are industries current best-practices and future next-gen practices?

Frost & Sullivan is taking a pioneering role in this by organizing (subject to change) an IdeaXchange which is an online panel discussion to discuss these pertinent issues with industry end-users. Please watch out for our notificiations and press releases regarding this.


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