The Year Systems Broke and Why 2026 Demands Action

If you assumed your security controls were working in 2025, you weren’t alone. So did 99% of defense contractors who failed CMMC compliance. So did organizations running on AWS when a 15-hour DNS error took down their operations. So did the 200+ U.S. companies that discovered Chinese state actors had been in their systems for years.

The question for 2026 isn’t whether you have security tools. It’s whether you can prove they’re working when your board, regulator, or insurer asks.

When Compliance Became Consequence: The CMMC Wake-Up Call

In November, the U.S. Department of Defense stopped awarding contracts to firms that couldn’t demonstrate Cybersecurity Maturity Model Certification (CMMC) compliance. No warnings. No extensions. Just enforcement.

Despite years of advance notice, 99% of defense contractors were unprepared. Nearly 40% hadn’t even completed required self-assessments.

Here’s what matters: These organizations had security systems. They had tools, firewalls, backups, and policies. What they didn’t have was proof their controls were actually working.

The leadership lesson: If your organization is subject to NCUA, FFIEC, HIPAA, or PCI audits, examiners are adopting the same mindset. They’re no longer asking “Do you have security?” They’re asking “Can you prove it’s working?”

The difference between having controls and demonstrating continuous compliance just became the difference between passing and failing.

When Nation-States Logged In: Salt Typhoon and the Credential Problem

2025 also reminded us that cyber threats aren’t just criminal; they’re geopolitical.

The FBI disclosed Salt Typhoon, a Chinese state-sponsored campaign active since at least 2019. The operation compromised telecommunications networks in over 80 countries and pivoted into critical infrastructure including energy, water, and transportation. More than 200 U.S. organizations discovered state actors had accessed their systems using valid credentials.

Here’s the uncomfortable truth: They didn’t break in. They logged in.

What your board will ask in 2026:

“Could this happen to us?” and “How would we know?”

The answer requires continuous monitoring, not periodic assessments. It requires real-time detection of compromised credentials and abnormal access patterns. And it requires leaders who can provide clear, confident answers instead of hopeful assumptions.

Because in 2026, “we have MFA” isn’t a sufficient answer anymore.

When Coordination Failed: The 43-Day Blind Spot

The 2025 federal government shutdown lasted 43 days and furloughed roughly 65% of CISA staff. With only 889 employees to coordinate federal cyber defense, information-sharing laws lapsed and attackers exploited the chaos.

Adversaries don’t pause during coordination gaps. They accelerate.

The speed question for leadership:

When something breaks or an alert fires at 2 AM on Saturday, how fast does your team actually respond, and who is accountable?

Most organizations discover their response time assumptions are wrong during an actual incident. By then, the damage is done.

Do you know your actual response time, or only what you’ve been told?

When “The Cloud Will Handle It” Didn’t: AWS and Azure Go Dark

AWS and Azure are world-class providers. They’re also not immune to failure.

In October, a 15-hour AWS outage triggered by a DNS error impacted over 1,000 companies. More than 4 million users couldn’t access applications. Payment services, social media platforms, and business-critical tools simply stopped working.

Later that month, an Azure network configuration error caused a global outage affecting Entra, Purview, Defender, and other Microsoft 365 servicesThe false confidence problem:

Organizations that assumed “it’s handled” discovered they had no backup plan when operations stopped for 15 hours.

This is the gap leaders know too well: the difference between what you’re told works and what actually works when it matters.

In 2026, leadership needs answers to: “If our primary systems fail, what’s our backup?” and “How quickly can we restore operations?”

These aren’t IT questions. They’re operational continuity questions that affect revenue, client trust, and competitive position.

When AI Changed the Game: Phishing That Fools Everyone

Artificial intelligence cut both ways in 2025.

AI helped defenders triage alerts and identify patterns. But it also enabled automated phishing, reconnaissance, and password-breach campaigns at scale. Generative tools powered deepfakes and emotionally persuasive scams that evaded traditional red flags.

Even vigilant employees fell victim to AI-generated phishing because the quality exceeded human detection capability. Traditional security awareness training assumed humans could spot red flags. AI eliminated those signals.

The leadership implication:

You can no longer rely solely on employee awareness. Technology must validate identity and intent because human judgment cannot keep pace with machine-generated deception.

What’s Coming in 2026: Five Predictions That Matter

1. Agentic AI Becomes the Insider Risk No One Expected

AI agents lack human judgment. They can misinterpret prompts, become vulnerable to indirect prompt injection, and leak data or execute unauthorized actions. The first major prompt-injection breach against a company using AI agents is expected in 2026.

2. The Attacker Bottleneck Disappears

A shortage of human hacker capacity currently limits breaches. AI and automation will widen that bottleneck, allowing attackers to target more victims. Smaller businesses can no longer assume obscurity protects them.

3. SaaS Platforms Become the Supply-Chain Target

Attackers will increasingly exploit trusted SaaS providers using valid credentials or misconfigurations. Because these platforms are deeply integrated into business processes, breaches will have significant downstream impact.

4. Speed Becomes the Only Defense

Cybercriminals exploit the speed gap between machine-driven attacks and human decision-making. Automated provenance checks, cryptographic signatures, and dual-channel verification are becoming necessary because training alone cannot close the gap.

5. Cybercrime Gets Productized

Dark-web marketplaces now sell cybercrime prompt playbooks and copy-and-paste frameworks showing attackers how to jailbreak AI models. Techniques that lowered the barrier to entry in 2025 will become scalable and repeatable in 2026.

What Leadership Must Do Differently

The thread connecting CMMC failures, Salt Typhoon, government shutdown chaos, and cloud outages is the same: organizations assumed their protections were working without continuous validation.

Leadership teams in 2026 face three non-negotiable expectations:

Boards expect clear answers to “Are we protected?” and “How do we know?”

Regulators and insurers expect proof, not promises

Operations can’t afford downtime, delays, or vendor finger-pointing

At TorchLight, we built our entire model to address what broke in 2025. Here’s how we’re helping organizations move from assumption to proof:

We Provide Continuous Proof, Not Just Periodic Assessments

Annual audits aren’t enough. CMMC proved that. Organizations that “passed” assessments still failed when enforcement arrived because their controls had degraded between reviews.

What we do: Our clients receive quarterly board-ready reporting that shows exactly what’s working, what’s at risk, and what’s been improved. The reports use leadership language, not IT jargon, so executives can walk into board meetings and answer “Are we protected?” with documented proof, not hopeful assumptions.

We Unified Accountability Under One Roof

When AWS went down, organizations with fragmented vendors had no single point of accountability. One vendor for IT, another for security, a third for compliance, consultants for strategy. When something broke, no one owned the outcome.

What we do: TorchLight integrates IT, cybersecurity, compliance, and advisory into a single unified service. One partner. One solution. One invoice. When something needs attention, there’s no question about who’s responsible. Our clients recover an average of 300+ hours annually by eliminating vendor coordination overhead and IT firefighting.

We Monitor Identity Threats in Real Time

Salt Typhoon exploited valid credentials across 200+ U.S. organizations. Traditional MFA wasn’t enough because attackers weren’t breaking in; they were logging in with stolen or compromised sessions.

What we do: Our Identity Threat Detection & Response (ITDR) monitors for compromised sessions and account takeovers in real time. It catches what MFA alone cannot: abnormal access patterns, after-hours logins from unusual locations, and session hijacking attempts. Compromised credentials are detected and blocked before attackers move laterally or access sensitive data.

We Close the Speed Gap With Automated Response

AI-driven attacks moved faster than human response in 2025. By the time security teams identified and responded to threats, attackers had already moved laterally, exfiltrated data, or deployed ransomware.

What we do: Our Endpoint Detection & Response (EDR) provides continuous monitoring and automated response across all devices. When a threat is detected, the system isolates the endpoint, kills malicious processes, and alerts the security team in seconds, not hours. The gap between detection and response shrinks from hours to seconds, stopping attacks before they cause damage.

We Eliminate the Hidden Costs

Most organizations pay twice: once for IT and security services, and again for inefficiencies in insurance premiums, compliance gaps, operational leakage, and vendor redundancy.

What we do: TorchLight’s integrated model eliminates these inefficiencies. Our clients typically achieve 30-35% reductions in annual cyber insurance premiums by demonstrating validated controls that carriers trust. They eliminate duplicate vendor costs and recover 300+ hours of executive time annually. The total often offsets 50-70% of TorchLight’s cost while delivering dramatically superior outcomes.

This is what we call the Zero-Cost IT Model: you’re not adding an expense; you’re eliminating waste and converting it into an advantage.

The Question That Defines 2026

2025 proved that assumptions fail. Organizations that assumed CMMC compliance, trusted cloud reliability, or believed “we have MFA” all faced consequences.

The question isn’t whether your organization has security tools.

The question is: Can you prove they’re working when your board, regulator, or insurer asks?

If that answer isn’t immediate and confident, let’s chat. Because in 2026, assumptions don’t just fail. They create breaches, complicate insurance renewals, and erode leadership confidence.