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Smart grid industrial control systems (ICS) remain in a state of flux. Security is still viewed as a cost-limitation exercise by many utilities, and advances toward meaningful regulations remain halting, says Pike Research. Nonetheless, the utility industry as a whole appears better informed of cyber risks to grids and substations, likely portending more cybersecurity deployments in the next one to two years. According to a new report from the research firm, a part of Navigant's Energy Practice, the market for smart grid ICS cybersecurity will reach $369 million in 2012 and grow to $608 million by 2020.

"The shallow growth curve for ICS cybersecurity through the remainder of the decade reflects utilities’ historically measured approach to technology upgrades - the focus on reliability trumps any abrupt shift to the next great thing,” says senior research analyst Bob Lockhart. “Despite the improved awareness of potential threats and risks, many utilities remain reluctant to allocate security funding beyond that needed for compliance minimums. That will change as the technology improves, prices go down and the cost of complacency becomes more apparent.”

Technological innovation in this market is stagnant, according to the report, and security vendors do not share a consistent view of this market. While many general-purpose security vendors have not yet seen the growth they had expected, vendors that specialize in control systems security are receiving more requests for proposals than ever.

Vendor approaches to the market also vary: Some strategically propose a full cybersecurity solution for an entire control network, while others take a more tactical approach and propose only solving specific problems. Whether taking a strategic or a tactical approach, Pike Research says vendors must orient their discussions with utilities around solving operational and business problems, not technical concepts.


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