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ANALYSIS: As Zoom Slowed, Silicon Valley Cyber Firms Grew Faster

May 19, 2022, 9:00 AM

This year’s Fenwick–Bloomberg Law SV 150 List confirms that the phenomenal growth of cybersecurity companies in 2020 was about much more than a pandemic-driven pivot to remote work. Throughout 2021, as workers returned to the office—and videoconferencing king Zoom’s meteoric ascent stalled—Silicon Valley cybersecurity firms grew even faster.

Steady Gains in Uncertain Times

Amidst an ever-expanding regulatory landscape and constant warnings of cyberattacks, business leaders across industries are recognizing that information security should be a top priority. And with over half a million US private-sector cybersecurity positions reportedly unfilled, third-party cybersecurity providers should have no shortage of work.

This cross-sector focus on safeguarding IT systems is reflected in SV 150 List data showing increased year-over-year growth among Silicon Valley cybersecurity firms.

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This year’s list also presents a less-crowded playing field of Silicon Valley-based public cybersecurity companies, helping the remaining firms stand out more. In 2021, CrowdStrike moved to Texas, Proofpoint was purchased by private equity firm Thoma Bravo, and FireEye was rolled up by private equity firm Symphony Technology Group to form Trellix.

Back to the (Hybrid) Office

While cybersecurity companies are seeing accelerated gains, annual growth rates among unified-communication-as-a-service (UCaaS) providers have been mixed. Although RingCentral’s (SV 150 #71) year-over-year growth of 35% marks a 4% improvement over its 2020 gains, growth of its UCaaS peers either slowed or stayed flat.

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In my analysis of last year’s SV 150 List, I asked whether the extraordinary rise of pandemic super stock Zoom Video Communications (SV 150 #41) would stall as offices reopened. One year later, that’s turned out to be the case.

But it’s not all bad news for Zoom. The 11-year-old company displaced enterprise communications giant Avaya (SV 150 #49) to become the list’s top-ranked UCaaS provider. And Bloomberg Intelligence reported that demand for cloud-based communications platforms should remain stable, as hybrid work culture will likely be around long-term.

Bloomberg Law subscribers can find guidance on drafting security incident reporting clauses, data breach indemnification provisions, and other cybersecurity-related contract language on our Practical Guidance: Information Technology Agreements page.

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