The current high level of security threats, the move to cloud services, and the lack of skilled workers are making security a top priority. As a result, chief information security officers (CISOs) are increasing their organizations’ security budgets. Gartner forecasts a 15% rise in cybersecurity expenditures in 2025, growing from USD 183.9 billion to USD 212 billion. The sector will experience the most significant spending growth in security services, followed by security software and network security. So, what are the main reasons contributing to expanding financial plans and security teams requesting a bigger say in where these resources are spent? Read on for a full breakdown.
What’s Fueling the 2025 Cybersecurity Spending Surge
While the reasons for investment decisions and increases may vary, Gartner identifies two primary factors for the anticipated rise.
1. Generative AI: Gartner indicates that organizations must execute more security measures to secure their environments while adopting it. The IBM framework on securing generative AI identifies five critical steps: Securing data, securing the model, protecting usage, securing AI model infrastructures, and building strong AI governance. As generative AI usage increases, many organizations must purchase additional software in future years, such as application security, data protection, and infrastructure defense.
2. The global skills shortage: Many organizations are facing a scarcity of proficient personnel who could help fulfill their risk mitigation needs. As such, many seek outside help to avoid pitfalls, including consulting, security professionals, and managed security services. Gartner notes that the cost of these services is a key reason why it expects to see doubled spending in the future. This means that these services are quickly becoming one of the fastest-growing areas in cybersecurity.
As businesses adopt AI and face a constant shortage of skilled workers, their security strategies and budgets need to change as well. Understanding these drivers helps organizations plan smarter, invest wisely, and avoid emerging risks.
Key Categories Every Cybersecurity Budget Should Cover
Instead of consolidating your organization’s expenses into a single line item, effective resource allocation involves detailing all the elements of a comprehensive cybersecurity program. To get started, consider the following in your budget:
Labor costs: Besides the salaries of full-time employees, account for any extra services you might need to purchase. For instance, outsourcing penetration testing falls under this category. Additionally, consider whether you need to employ managed services for cybersecurity.
Technology: Consider the different types of software you need, including antivirus programs, encryption tools, and firewalls. Decide if you will use generative AI for security and consider any extra solutions needed to protect your organization from attacks on the tools you use in daily operations. Don’t forget to factor in hardware expenses, such as any infrastructure updates required to support new technological tools, particularly generative AI.
Training: Most organizations only budget for cybersecurity training and certifications for certain staff. However, it’s important to set aside money for intrusion awareness programs for all employees. Cyberattacks that occur as a result of employee mistakes could be minimized if one employs creative thinking and allocates sufficient resources.
Incident Response: After a breach or a cyberattack, companies must organize their spending on the costs of containing the violation and responding to it. Standard expenses are legal fees, PR agency pay, overtime, data breach notifications, identity theft protection, lost revenue, etc.
A well-structured cybersecurity budget isn’t just a financial plan—it’s a proactive defense strategy. By breaking down costs across people, technology, training, and incident response, organizations can build resilience and reduce vulnerabilities before threats strike.
Underfunded and Overwhelmed
While some organizations consider business disruption and potential risks when devising their security plans, many fail to account for the impact that cost controls have on the cybersecurity team.
The ISACA State of Cybersecurity 2024 and Beyond revealed that 66% of threat analysts reported their roles have become more stressful. Unsurprisingly, the primary reason (81%) was that the threat landscape is growing more complex. However, a low budget (45%) was tied for second place, followed by challenges in hiring, retention, and a lack of skilled/trained staff.
The report also indicated that over half (51%) believe their projects are underfunded, an increase from the 47% who felt that way in 2023. Additionally, only 37% anticipate an increase in their budgets for 2025. Compounding the stress, merely 40% expressed high confidence in their team’s readiness to manage a cyberattack, while 47% expect it to occur within their organizations.
Reducing Employee Stress While Budgeting For 2025 and Beyond
As organizational leaders prepare their budgets, here are several strategies to alleviate employee stress around financial planning:
Involve your cybersecurity team members in these conversations. When employees feel their viewpoints and suggestions are valued, they are less likely to harbor resentment. Furthermore, they can directly witness the trade-offs involved in expense tracking and the effects of each choice on other budget items.
Encourage employees to articulate their existing challenges. By beginning with an understanding of their issues, you can leverage these concerns to inform financial decisions. If team members rush to propose technology solutions, guide them back to initially discussing the problems.
Request your cybersecurity team to conduct research and obtain estimates. Once you shift to the solution phase, ask team members to investigate tools and gather price estimates. Since they will use these tools daily, securing their support for particular solutions can enhance satisfaction and improve expenditure accuracy.
Present the draft budget to team members. By sharing the draft of the financial planning with the team and soliciting their feedback, they feel acknowledged and can also recognize the necessary trade-offs in the process.
Final Thoughts
Organizations must look beyond the numbers as funds for digital protection climb in response to escalating threats, AI adoption, and persistent talent shortages. A bigger budget alone won’t secure a business—how that investment is devised, allocated, and managed determines resilience. Involving cybersecurity teams in spending decisions, prioritizing operational needs, and addressing employee stress are crucial to ensuring those funds deliver lasting protection. By combining thoughtful financial planning with a people-first approach, businesses can build stronger defenses and a healthier, more motivated security workforce in 2025 and beyond.
