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How companies can achieve AI ROI

Companies realize AI for security is crucial to mitigate today's threats and think ROI from such investments is achievable. The investment community is also bullish on the future of AI ROI.

As the world continues to react to both COVID and geopolitics, investments in AI for security are likely to benefit from these shifts.

Successful AI investments generate ROI by first addressing concrete problems and then expanding to establish more cohesive security frameworks and partnerships. Therefore, IT security is a natural place for these investments.

Returns on investment for AI

Calculating ROI for AI is like calculating it in other areas. There are generally two areas for ROI: direct investment returns, or hard dollars, and indirect investment returns, or soft dollars. For a given dollar investment, look at how long it takes for a company to "break even" and supersede that amount in either revenue (hard dollars) or some other added value that would be difficult to quantify financially.

Companies using AI tools can show reports, usually measured in months, that show the time and money they saved in finding and resolving security issues -- therefore proving that these tools add value. Added "soft benefits," such as avoiding downtime and reputation damage, are helpful but usually not the most compelling reasons for investments.

Investors, however, look at AI ROI differently than the enterprise. In their case, they invest capital with a plan to receive a multiple of that investment over a fixed period, typically three to five years. Given the rapid growth of the IT security market, the investment community will likely see AI security investments achieving their ROI targets.

Who is investing in AI for security?

The United States has been the leader in AI investments globally, with China in second place and catching up. Some reports show China leading in the private sector, but most of China's investments remain within Chinese companies. In 2019, the U.S. invested around $40 billion in AI, with the lion's share of that going to U.S.-based companies. That said, most of the investment in AI technology, especially for security-based AI, has been in the private sector.

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AI chipsets and accelerators for edge applications will grow to $51.9 billion by 2025, up from $7.7 billion in 2019, according to research from Omdia. Those apps include mobile phones, drones, security cameras and robots. Such investments will increasingly be funneled to security applications.

Some of the leaders in AI security investments include Secureworks, with the development of its Taegis platform. Larger companies like Google have invested in AI with its TensorFlow platform, but this is used for various types of machine learning applications and is not strictly security-oriented. Visa and Mastercard invest heavily in AI, where their focus tends to be on fraud detection and money laundering prevention.

There are also numerous startups in AI for security and many IT vendors, such as Secureworks, Cisco, Fortinet and Palo Alto Networks, are expected to invest in research and development and acquire startups they feel will enhance their existing AI security capabilities.

Security areas ripe for AI ROI

Cybersecurity is a tremendous opportunity for AI growth. Many of the expanding areas of security include: threat identification, threat containment, zero trust, extended detection and response (XDR), security incident and event management (SIEM), and security orchestration, automation and response (SOAR). Of these, XDR and SOAR offer the most promise for AI ROI. XDR blends threat identification with threat containment while SOAR enhances SIEM by coordinating automation actions in an environment gathered by SIEM tools.

While each of these security elements offer some advances via AI, the largest gains are likely to be in AI's ability to coordinate analyses and actions across a range of IT domains. When companies can show concrete ROI examples, they are more likely to get attention from the investment community.

While the economy continues to show resilience, there will be continued investments in and acquisitions of AI startups by larger IT companies that want to expand their security capabilities.

AI ROI examples

In today's world, AI is pragmatic in solving new problems. Conglomerates that manage restaurant chains, for example, are affected by COVID-19, which has dramatically changed customer patterns. Customer orders are done via mobile apps and can reach kitchens directly, with AI being a critical technology not only in this effort, but also in order prioritization. The ROI is measured in the amount of time saved when circumventing pandemic-driven slowdowns.

In another example, large banks have to deal with shifts in user behavior as they see sudden increases in home workers who still need access to banking systems. At the same time, they see dramatic increases in security threats to their environments. One way to handle a dramatic change in network traffic, VPN loads and security is to add AI to sort through data to identify critical events they need to act on. SOAR systems are used here, therefore this example proves the promise of SOAR systems for AI ROI.

The future of investments in AI for security

It's safe to say the future of investing in AI for security is very bullish. While the economy continues to show resilience, there will be continued investments in and acquisitions of AI startups by larger IT companies that want to expand their security capabilities. The continued tight labor market will insist on finding ways for companies to make use of scarce resources. This, along with ever-increasing global security threats, means businesses must rely on better AI technology and ultimately invest in AI security.

Finally, increasing instability in geopolitics will drive further uncertainty in global markets. While this might seem to presage capital retrenchment, there is nowhere to retrench. Inflation will erode money markets; therefore, corporate investments continue to look to markets for safety.

These factors lead to AI security as a smart investment. Companies that demonstrate AI ROI should be well-positioned for the future.

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