Defense Cyber Spending Set to Double

Defense organizations are being squeezed from two directions at once: networks that are increasingly under attack, and command systems that depend on cloud platforms and connected devices to function. A new forecast from the management consulting firm MarketsandMarkets puts a number on what that pressure is likely to cost, projecting that the cyber warfare market will double in the next five years.

The report, published on September 14, estimates the market will grow from $14.99bn in 2026 to $28.75bn by 2031. That projection rests on a specific set of drivers the firm lays out in the analysis: rising attacks on military networks, the spread of connected platforms into defense operations, and a deliberate push by Western governments to build offensive cyber capabilities.

What's Driving the Forecast

MarketsandMarkets attributes the expected growth to defense organizations being forced to invest in stronger cybersecurity as attacks on military networks and mission systems increase. That pressure isn't abstract — it reflects a shift in how militaries operate, with more of their critical functions running on systems that can be reached over networks.

The firm also points to the growing reliance on connected platforms, cloud systems and digital command and control networks, which it says is creating more cyber risks that defense organizations need to address. Each of those dependencies widens the attack surface that a military has to defend.

A separate factor in the projection is offensive capability. According to the report, Western governments have placed greater emphasis on developing offensive cyber capabilities to tackle threat actors based in jurisdictions outside the reach of law enforcement — a recognition that some adversaries can't be pursued through traditional legal channels.

“Defense organizations are investing in threat detection, cyber intelligence, network security, and offensive cyber tools, along with cyber training. Rising defense budgets and the development of national cyber warfare programs are expected to support further investment in the market.”

— MarketsandMarkets, in its report on the cyber warfare market

The Offensive Cyber Shift

The report ties part of the expected spending growth to a policy change rather than a purely technical one. It cites an August 2026 memorandum signed by US President Donald Trump that authorized federal law enforcement agencies to collaborate with private firms in conducting offensive cyber strikes on foreign threat actors targeting the US.

That kind of authorization matters for the market because it converts a government posture into procurement. If agencies are permitted to work with private firms on offensive operations, that creates demand for tools and services those firms provide — a different category of spending than purely defensive network protection.

The report frames this as one of several factors feeding into the forecast, alongside rising defense budgets and the development of national cyber warfare programs. Together, MarketsandMarkets expects those forces to support further investment across the market.

Europe's Expected Lead

The forecast projects Europe to hold the largest share of the cyber warfare market during the forecast period. The firm attributes that to governments in the region increasing their efforts to strengthen military cyber capabilities.

NATO has made a series of announcements in recent years about developing shared cyber capabilities and running joint cyber exercises, which the report says is encouraging further demand for cyber warfare solutions in Europe. Shared capabilities and joint exercises both imply spending on interoperability — tools and systems that work across member nations rather than within a single country's silo.

The regional projection is notable because it places the largest share of growth in a region where collective defense arrangements shape procurement, rather than in a single national market.

Cloud Security Leads Growth

Within the market, MarketsandMarkets identifies cloud-based security as the segment that will see the highest growth in the five years up to 2031. The firm ties that to increasing use of cloud platforms for military data and applications, as well as for cyber operations themselves.

It also points to the shift toward hybrid and multi-cloud environments, which the report says is increasing the need for security tools that can operate across different military networks and military platforms. That's a practical problem for defense organizations: security controls that work in one cloud environment may not extend cleanly to another, and military platforms don't all run on the same infrastructure.

The cloud segment's projected growth fits with the broader drivers in the report. If more military data and applications move to cloud platforms, and those platforms are spread across hybrid and multi-cloud setups, the tools needed to secure them have to span those environments.

Where the Money Goes

The report lists several categories where it expects defense organizations to direct spending: threat detection, cyber intelligence, network security, offensive cyber tools, and cyber training. Each represents a different part of the problem, from identifying intrusions to understanding adversary activity to building the skills needed to operate in this environment.

The inclusion of training alongside tools is a reminder that capability isn't only about procurement. Defense organizations need people who can operate the systems, and the report treats cyber training as one of the investment areas supporting the market.

• $14.99bn — projected cyber warfare market size in 2026
• $28.75bn — projected market size by 2031
• Five years — forecast period covered by the report
• August 2026 — when the US memorandum on offensive cyber collaboration was signed

The Broader Defense Context

The forecast arrives amid ongoing scrutiny of how well military and defense systems are protected. The report's central claim — that attacks on military networks and mission systems are rising — is the premise behind much of the projected spending.

MarketsandMarkets frames the growth as a response to conditions defense organizations are already facing, not a speculative bet on future threats. The reliance on connected platforms and digital command and control networks is described as a present source of risk, not a hypothetical one.

The firm's projection also reflects a shift in how governments think about cyber operations. Developing offensive capabilities is presented alongside defensive investment as part of the same market, which suggests defense organizations are buying for both purposes.

What the Forecast Assumes

Projections of this kind rest on assumptions about budgets, policy and threat levels holding steady or intensifying over the forecast period. The report ties its numbers to rising defense budgets and the development of national cyber warfare programs, both of which it expects to support further investment.

The Europe projection depends on continued movement toward shared cyber capabilities and joint exercises among NATO members. The cloud segment projection depends on military data and applications continuing to migrate to cloud platforms, including hybrid and multi-cloud setups.

Each of those assumptions is stated in the report rather than treated as certain. The forecast describes what MarketsandMarkets expects to happen based on the factors it identifies, not a guaranteed outcome.