Report: Security Spending Soars
The report -- “User Plans for Security Products and Services, US/Canada 2002” -- states that end-user spending on security products, services, and public key infrastructure (PKI) will increase 154 percent by 2006, jumping to $9.5 billion from $3.8 billion this year.
On a global scale, security spending will increase even more, according to the report. Worldwide, end-user spending on managed firewalls is expected to see a 158 percent hike, while spending on auditing and vulnerability testing services will soar 616 percent during the period.
The report is based on in-depth, hour-long interviews with 240 network managers making the purchasing decisions at organizations of all sizes. All the organizations in question are already using major security products or services, according to Infonetics. Firewalls, authentication, encryption, vulnerability testing, VPNs, intrusion detection, virus scanning, denial of service (DOS) attack prevention, and PKI are among the products being bought, according to the report.
The interviews showed that most organizations are planning large security investments over the coming years. More than half of the respondents indicated they will purchase integrated security appliances by 2004, and 75 percent said they will have implemented some form of intrusion detection by that time. As for the newer security technology needed to protect wireless networks, only two respondents said they aren’t planning to do anything to protect their wireless LANs by 2004.
In these uncertain time, there are several elements driving the security spending surge, says Infonetics analyst and author of the report, Jeff Wilson. “There’s the increased paranoia,” he says. In addition, he points out, the federal government is continuing to invest heavily in security, and homeland security initiatives have led to new regulatory requirements in the health and finance sectors, and continued spending for critical infrastructure like power and electricity. There is also a lot of pressure on organizations of all kinds and sizes to increase their levels of security -- “as an act of patriotism... Sure, it’s propaganda, but [the industry] needs some bright spots.”
Cisco Systems Inc. (Nasdaq: CSCO) seems to be the vendor benefitting most from the growing security trend. 37 percent of all respondents said that they currently use Cisco security equipment, Wilson says, emphasizing that survey responses are not representative of market share. “Cisco’s done a lot of hard work in [the security] area and it’s paying off."
Following Cisco was Symantec Corp. (Nasdaq: SYMC), with 26 percent of respondents using its products.
The survey also reveals that companies are investing more and more in hardware-based, integrated security products, Wilson says. “There’s definitely a drive towards hardware. Obviously, it’s moving in that direction with firewalls, but also with just about [all other security products]. Even with virus scanning, we’re seeing a push towards putting it on hardware.”
Wilson says the drive towards hardware-based solutions is much stronger in North America than in Europe, where Infonetics did a similar study earlier this year. “There’s a stronger tendency towards managed services in Europe,” he says, pointing out that in the U.S. there are more large organizations, which tend to prefer doing their own security. In addition, “Europeans tend to be more trusting of their service providers. In North America, you just don’t take the carrier’s word -- especially now. The incumbents have much more influence in Europe.”
— Eugénie Larson, Reporter, Light Reading