EU cyber security market up 13% amid AI, regulation push
The European cybersecurity market saw a 13% increase in revenue during the first half of 2025, supported by heightened demand, regulatory requirements, and significant consolidation activity.
Data provided by the global market intelligence firm CONTEXT shows that revenue generated through European IT distribution posted substantial year-over-year growth, highlighting ongoing investment in cyber defences across the region.
Growth was particularly strong in southern Europe, with Italy reporting a 23% increase, Spain growing by 26%, and Germany recording a 14% uptick in cybersecurity revenue. This was attributed to businesses committing to streamlining and strengthening their digital protections. The United Kingdom experienced an 11% downturn; however, this decrease was largely explained by high comparative figures from the same period in 2024, according to CONTEXT analysts.
Cybersecurity is no longer a niche IT investment, it's a core part of business resilience. From compliance to AI-driven fraud, companies across Europe are waking up to the risks and prioritising spend accordingly. The result is strong, broad-based market growth," said Joe Turner, Global Director of Research at CONTEXT.
The period in review also witnessed notable corporate activity, including Palo Alto Networks' proposed USD $25 billion acquisition of CyberArk, one of the biggest deals in cybersecurity sector history. CONTEXT described such consolidation as ushering in a new phase for the industry, with potential impacts on both the structure of the market and the availability of integrated security solutions.
Regulation remains a central aspect of the sector's evolution. The European Union has introduced a new cyber security framework aimed at improving crisis response among member states. The blueprint sets out a common approach to large-scale threats and aims to simplify cross-border compliance, something vendors have welcomed due to prospects for reduced operational complexity.
CONTEXT's recent SalesWatch report identified that concerns around generative artificial intelligence (AI) and its misuse have intensified. The deployment of deepfakes, realistic phishing attempts, and automated attacks linked to generative AI have become more prevalent, stretching the capabilities of traditional security infrastructure and further encouraging investment in new technologies.
We're at a tipping point," added Joe Turner. "While AI supercharges productivity, it's also arming threat actors with tools that are harder to detect, faster to deploy, and increasingly convincing. That's fuelling security investment across all layers, from endpoint to cloud.
The strongest gains by security segment were observed in network security, which grew 21% year-over-year. Italy led in this segment, soaring by 56%, followed by Germany at 27% and Spain at 44%. Other segments, including cloud security, endpoint security, and infrastructure protection, all contributed to the positive trajectory, reflecting a widespread need for multi-layered defences throughout the industry.
Although UK revenues declined during the reporting period, CONTEXT explained this reduction was not indicative of structural weakness in the market but rather was attributed to the extraordinarily high growth seen in the first half of 2024. This created a high base for year-on-year comparison, affecting the apparent change for 2025.
Regional and regulatory factors are adding to the urgency for businesses to shore up security. New requirements under frameworks such as NIS2, alongside risks from zero-day exploits such as the ongoing SonicWall VPN vulnerability, are contributing to rising attack volumes and making robust protection a priority across sectors.
The outlook, according to CONTEXT industry tracking, remains positive for the remainder of 2025. As companies contend with advanced threat vectors and compliance obligations, spending on cybersecurity solutions is expected to remain robust as the year progresses.
