ISRAEL CYBERSECURITY MARKET SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS (2025 - 2030)

Israel Cybersecurity Market Trends and Insights

National Cyber Directorate Compliance Mandates

The National Cyber Directorate introduced sector-wide rules that require real-time threat sharing, standardized incident reporting, and continuous monitoring across government, BFSI, and critical-infrastructure operators, forcing organizations to modernize SIEM, SOAR, and identity platforms in compressed timeframes. Since October 2023, coordinated defenses have neutralized roughly 800 major attacks, validating the centrally managed “cyber dome” strategy and anchoring near-term spending surges.

Vibrant start-up and venture funding environment

Cybersecurity startups raised USD 4 billion in 2024 across 75 deals, more than doubling 2023 totals and equal to 38% of overall tech funding, with headline rounds for Wiz and Cyera. Serial entrepreneurs recycle know-how into fresh ventures, compressing go-to-market cycles and spawning niche products in CNAPP, API security, and industrial IoT defense.

Rapid Enterprise Adoption of Cloud and IoT Platforms

Cloud deployments already account for over half of national security spend and are climbing at double-digit CAGR as enterprises pivot toward SaaS, edge computing, and connected-device ecosystems. Check Point’s Infinity platform posted double-digit growth in these domains, reflecting an appetite for elastic, centrally managed defenses.

Geopolitical Tensions Driving Advanced Threat Activity

Regional conflict elevates Israel to a front-line laboratory where sophisticated, state-linked threat actors stress-test local defenses. Check Point recorded a 44% YoY jump in global attacks during 2024, and many vectors specifically targeted Israeli government and commercial assets ^{[1]Grace McDougal, “Check Point Announces New CEO & Reports Strong Q2 2024,” checkpoint.com}. This accelerates customer interest in automated response, air-gapped OT protections, and AI-driven anomaly detection.

Severe cyber-talent shortage and wage inflation

Roughly 15% of local cybersecurity positions remain open; premium salaries run two-three times national tech averages, pressuring start-ups to expand offshore engineering hubs in Eastern Europe and Latin America. Distributed teams prolong release cycles and elevate operational risk, dampening sector growth prospects.

Tool sprawl and integration complexity

The average Israeli enterprise now manages more than 75 distinct security tools, complicating policy management and widening attack-surface blind spots. Vendors are pursuing acquisitions and platform roll-ups to streamline controls, but migration projects add near-term friction.

Segment Analysis

By Offering: Solutions Hold Lead, Services Accelerate

Solutions captured 52% of 2024 revenue, as enterprises continued refreshing firewalls, endpoint detection, and data-protection suites. Spending emphasizes zero-trust network access, CNAPP, and advanced EDR where Israeli code heritage shines. Services, however, are projected to outpace solutions with an 11.8% CAGR through 2030, reflecting rising demand for managed detection, incident response, and continuous compliance monitoring.

Platform vendors now embed advisory and implementation services directly within subscription bundles, pushing hybrid revenue models. Incident-response retainer uptake increased sharply after the October 2023 attacks, as boards accepted the inevitability of compromise. Israeli consultancies leverage proximity to elite military units to offer red-team and threat-hunting engagements that global corporations seek for adversary simulation. This mix ensures services will gradually erode solution-only dominance while preserving vendor stickiness across the Israel cybersecurity market.

By Deployment Mode: Cloud Momentum Builds

On-premise deployment retained 61.2% share in 2024, driven by defense, energy, and payments workloads requiring deterministic latency and sovereignty controls. Yet cloud environments clock a 15.2% CAGR, adding the most absolute dollars through 2030. Large enterprises are increasingly adopting secure access service edge (SASE) and micro-segmentation to extend policy enforcement across multicloud estates.

Check Point’s CloudGuard Network Security reports 58% of its deployments among Fortune 1000 clients seeking consistent posture across AWS, Azure, and GCP. For Israeli SMEs, cloud-first security enables enterprise-grade defenses without hardware procurement, making OPEX-driven models attractive amid funding constraints. Consequently, hybrid orchestration layers—capable of toggling controls between data center and public cloud—have become a primary evaluation metric within vendor shortlists throughout the Israel cybersecurity market.

By End-user Industry: BFSI Leads, Healthcare Emerges

BFSI held 28.4% of 2024 revenue, retaining top spot due to stringent Bank-of-Israel guidance and evolving PSD2-style regulations. Fraud analytics, transaction monitoring, and machine-identity governance remain hot procurement areas. Healthcare, growing at an 8.6% CAGR, benefits from telemedicine adoption and new data-privacy obligations that compel encryption, asset-management, and PACS-security investments.

Industrial firms that manage critical infrastructure have also accelerated spending as the National Cyber Directorate enforces OT hardening standards. Vendors like Claroty leverage Israeli ICS research heritage to penetrate energy and water utilities. This sectoral diversification, underpinned by mandatory compliance and threat realism, sustains broad-based demand across the Israel cybersecurity market.

Note: Segment shares of all individual segments available upon report purchase

By End-user Enterprise Size: Large Enterprises Dominate, SMEs Gain Velocity

Large enterprises command 71.2% of 2024 spend, reflecting complex attack surfaces, regulatory audits, and budgetary heft. These organizations orchestrate multi-platform architectures spanning SIEM, SOAR, EDR, and threat-intel feeds, and increasingly pilot AI-assisted SOC automation. Yet SMEs record a 10.9% CAGR thanks to subscription bundles that disguise advanced detection under predictable monthly fees.

Israeli start-ups target this cohort with lightweight agents, automated policy templates, and outcome-based service-level agreements. For example, identity-security vendor CyberArk’s SaaS tier packages privileged session recording into an OpEx-friendly bundle, lowering entry barriers for mid-market finance and healthcare operators ^{[2]CyberArk Software Ltd., “CYBR Q3 2024 Earnings Presentation,” cyberark.com}. This democratization broadens the customer base and supports long-term scale across the Israel cybersecurity market.

Geography Analysis

Tel Aviv continues to anchor roughly 70% of cybersecurity companies, benefitting from dense venture-capital networks, shared workspaces, and immediate adjacency to global banks’ innovation arms. The clustering enables rapid talent circulation and fosters informal knowledge exchange, propelling accelerated proof-of-concept cycles. Many multinationals locate regional R&D centers here, further enriching the talent pool and providing domestic start-ups with high-value acquisition pathways.

Beersheba, home to the CyberSpark campus, has become Israel’s industrial-cyber nexus. Military intelligence relocation to the Negev city seeded a crossover community where academic researchers, industrial-control vendors, and elite Unit 8200 veterans collaborate on OT anomaly detection. The government incentivizes southern expansion through tax breaks and grants, distributing economic activity and enhancing national resilience against concentrated physical attacks.

Jerusalem and Herzliya act as complementary micro-clusters. Jerusalem hosts encryption and quantum-security labs linked to Hebrew University, while Herzliya houses many early-stage SaaS start-ups targeting API and supply-chain security. Combined, these nodes create a geographically diversified innovation lattice that underwrites sustained export growth; Israeli vendors now direct more than 70% of revenue overseas, primarily to North America and Europe where regulatory similarity accelerates market entry.