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You cant sell security in a recession can you?

Stephen Hopkins | Nov. 12, 2009
Surprising insight into security spending

Credit crunching, stock markets crashing, economies imploding, employment tumbling. All clichés of our times. Unsurprisingly, the resulting squeeze on company profits has led to corporate budgets being slashed in a bid to save the bottom line. IT budgets, a significant business cost in any modern organisation, have been hit hard with many of our customers telling of double-digit percentage cuts in funding.

You could be forgiven for thinking that IT security (often seen as a significant cost-centre) has been suitably impacted by recent budgeting rounds.  You could… but you might be in for a surprise.

Before the slump (2007), IDC was predicting that the managed security services market in the Asia Pacific would be worth US$1.1 billion by 2012, with managed firewall services taking the lions share at around US$250 million.

In a more recent update, they are still bullish about the security market and claim a compound annual growth rate (CAGR) of 17 per cent to 2012 for the market globally. Forrester makes similar claims, stating as recently as April that the security market is growing despite the recession.

Recent conversations with Gartners lead security analyst for the Asia Pacific offer similar insights. Spending to keep the house in order continues, while more ambitious security technology projects are re-evaluated or mothballed until an upturn.

Keeping the house in orderthe security stuff that companies have to do to satisfy their shareholders, regulators and customersmust continue and drives a significant portion of IT security spending.

Perhaps more so in these troubled times.

Reducing business risk

Companies are looking at all means available to them to reduce business risk. In troubled economic times, its a certainty that there are more people who want to steal your money, so you cant just let your guard down.

If the Gambinos moved in down your street, youd most likely re-consider whether it was worth fixing those dodgy locks on your doors and windows. Increases in online crime are forcing companies to take the same approach.

Customers in Asia tell us that if their security budgets are being cut, its at a lesser rate than other areas of IT spending. Many tell us that the budgets have simply been frozen compared with last year. Mandatory spending continues, but with considerable increases in oversight over discretionary spending. Costs have to be controlled.

Sadly for the corporate defenders, the IT security landscape has been likened to a perpetual arms race. This means that IT security teams are being challenged to deliver more with the same.

Whos buying

So who is buying, and what are they spending money on? The picture isnt uniform and is too complex to go into detail here, but generally governments continue to spend on IT security-related projects. This is very true of India and Singapore, although Australia has been hit by wide-ranging cost controls within government (although defence is still spending).

 

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