Startups and their investors are always searching for a blue ocean market where there’s little competition in an emerging industry that stands to experience significant growth. These opportunities are few and far between and typically arise when a market is relatively new or has a high entry barrier to overcome.
A blue ocean scenario could be unfolding cyber security in maritime industry, which is currently underserved because of its complexity and high entry barrier for competitors. The sector is critical, though, because the cost of a significant maritime cyberattack would be catastrophic for everyone involved.
Investors should be searching for well-equipped startups looking to tackle this immense cyber security problem due to the significant growth opportunities throughout the market. This guide discusses some reasons cyber security in the maritime industry is a growing concern and analyzes the traits to look for when examining industry startups.
What Is Maritime Cyber Security?
Maritime cyber security refers to the tools, concepts, guidelines, policies, and technologies protecting marine organizations, vessels, IT infrastructure, and operational technology (OT). It applies to ships, ports, and the systems they use to keep the entire logistical chain moving.
About 90,000 commercial marine vessels are in operation, and these ships are responsible for over 90% of world trade. A cyber attack hitting multiple shipping organizations at once would have a major impact on global trade, bringing much of it to a standstill.
Cybercriminals understand the importance of maritime shipping and are targeting shipping companies with increasing frequency. A 2017 attack on Danish shipping company Maersk cost the company an estimated $300 million, and attacks on maritime systems have increased by 900% in recent years.
The cyber security marine industry aims to protect the critical systems that keep global trade afloat. The main issue is that no startups offering a catchall solution have emerged, providing major opportunities.
Reasons Cyber Security in the Maritime Industry Offers Significant Opportunity
The maritime industry has increasingly become a target for cybercriminals. With increasing digitization, ships have become vulnerable to cyber attacks, which can put critical systems at risk, including navigation, propulsion, and communication. The consequences of such an attack can be catastrophic, resulting in lost cargo, environmental damage, and risks to the safety of crew members.
Thankfully, the market conditions in the maritime industry are ripe for improvement in cybersecurity measures. Maritime companies are beginning to recognize the severity of cyber threats and are investing in strategies to protect their assets against attacks. In addition, regulatory bodies such as the International Maritime Organization (IMO) have introduced guidelines and regulations to encourage companies to implement cybersecurity measures.
However, cyber threats in the maritime industry are constantly evolving, and the measures taken to address them must evolve as well. Maritime companies can mitigate these risks by conducting regular cybersecurity audits, implementing strong authentication and access controls, and providing regular training for crew members to stay aware of the latest threats.
With the right approach to cybersecurity, the maritime industry can embrace digital transformation confidently and securely, unlocking new levels of efficiency, safety, and customer satisfaction. Some reasons this industry is poised for growth include the following:
Increasing Threats
The shipping industry is quickly undergoing a digital transformation where competition is driving a new reliance on technology. Logistics and shipping firms are looking for any advantage they can uncover, leading them to use technologies like ECDIS, VDR, AIS, CTS, and EPIRB in their day-to-day operations. Criminals can exploit these innovations if they don’t have adequate protections in place, which is the scenario we’re seeing play out today.
New Regulations
The International Maritime Organization implemented new regulations on Jan. 1, 2021, stating that every safety management system must include cyber risk management. The White House also released its National Maritime Cybersecurity Plan in late 2020, identifying some of the most significant risks shippers could encounter. These new regulations mean maritime organizations must address their cyber security needs, especially if the requirements tighten even further.
Lack of Solutions
There simply aren’t enough cyber security solutions in the maritime industry. Only 42% of organizations in this market currently protect their vessels from operational infrastructure threats despite 77% of maritime firms recognizing cyber attacks as a high or medium risk to their operations. The lack of available cyber security in maritime industry solutions creates an incredibly risky environment for these companies.
The maritime cyber security environment is perfect for startups to enter, assuming their founders have the necessary backgrounds. Creating solutions for this industry’s needs could be highly lucrative for those with the expertise to address them.
Four Traits Successful Maritime Cyber Security Startups Should Possess
Investing in startups can be a risky business, and the cyber security shipping industry is no exception. Since it is a relatively new field, founders may not have significant experience in this domain. However, investors can still evaluate certain criteria to improve their chances of success.
One of the essential requirements is the founder’s expertise in the cybersecurity or shipping industry. Founders who understand the technical and operational aspects of the industry can better identify potential challenges and opportunities. Moreover, they are more likely to develop innovative solutions that resonate with customers and create a competitive advantage.
Another crucial factor to consider is the founder’s ability to build a strong team. Great leaders can attract talented individuals and create a culture of innovation and excellence. They set clear goals and inspire their team members to achieve them, leading to higher productivity and better outcomes.
Additionally, investors should look for founders who have a track record of resilience, adaptability, and problem-solving skills. Founders who have tackled and overcome significant challenges in the past are more likely to succeed in the long run.
While there are no guarantees in the startup world, investors can improve their odds of success by carefully evaluating the criteria mentioned above. Ultimately, investing in the right founders can help fuel the growth of the cyber security shipping industry and create new opportunities for innovation and prosperity. Some traits to look for include the following:
1. A Naval Background
Any all-in-one cyber security marine industry solution would have to protect operational technology infrastructure like ECDIS, VDR, AIS, CTS, and EPIRB systems. Working knowledge of these systems is necessary because a programmer likely won’t understand the intricacies of these designs enough to develop a solution. Having a founder with a background in the Navy onboard would immediately provide credibility for the cyber security firm.
2. An Understanding of International Regulations
Any cyber security expert working on a solution would need an understanding of what international regulators require. The solution would travel with the vessel into numerous jurisdictions every month, so it must meet the requirements of regulators worldwide to be helpful. A founder with significant experience working with international regulators is vital.
3. Experience Securing Ship Software and Hardware
A full-service cyber security solution for maritime organizations should protect the vessel’s IT and OT infrastructure. Securing the ship’s computer and communication systems is critical, but hackers also target operational controls, allowing them to alter the boat’s course and do untold damage. An all-in-one service would guard both systems, offering peace of mind in the process.
4. Diverse Sales Skills
Marketing and generating sales could prove challenging, even if a cyber security firm meets the first three requirements. The company will sell these products in countless global markets, so experience dealing with different cultures and understanding the sales process in those countries is vital
Finding a cyber security startup with these four traits might be next to impossible, but investors can still look for companies that check some of these boxes. This blue ocean market has immense growth potential, so researching the possibilities is advisable.
Investing in the Industry’s Future
The problem of maritime cyber security isn’t going anywhere, and, in fact, it will likely become more prominent in the coming years. Investors should be looking for startups with the expertise to address the most prevalent issues because the industry as a whole is looking for a solution.
Option3 brings cyber security startups and knowledgeable investors together. We can provide the information you need on cyber security in the maritime industry, so you can make an informed decision. Contact Option3 to learn more about this growing market.
