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Tuesday, June 20, 2006

Research Predicts Security Spending Slowdown

Even as high-profile data leaks grab headlines and compliance auditors begin making their rounds, many chief information security officers are preparing to trim their budgets.  According to a new survey of North American CISOs released by New York-based investment bankers Merrill Lynch & Co., enterprises are hoping to throttle down their spending on new IT security technologies over the second half of 2006.  On average, the IT security executives interviewed by Merrill Lynch said they only plan to increase spending by 2.9 percent over the next 12-18 months, whereas CISOs had indicated plans to increase spending by 11.4 percent when the survey was last conducted in March 2006.  Among the trends driving the reduced spending on IT security is the growing inclusion of defensive features built into technologies such as network equipment and Microsoft’s next-generation Windows Vista operating system.

However, while 7 percent of those surveyed for the report said they hope to eliminate the need for stand-alone security products altogether by using on such tools, only 16 percent said they actually plan to buy fewer products, with 22 percent holding out for price concessions from vendors before making additional purchases.

“[The] key will be for vendors to anticipate new security needs with extended or newer offerings.”

However, the report said some types of security applications, such as anti-virus software, firewalls and VPNs, will become increasingly commoditized, putting pressure on stand-alone vendors of the technologies as demand decreases.  Bob Egner, vice president of product management at Pointsec Mobile Technologies, which markets software used to encrypt data on desktops, laptops and mobile devices, said demand for the company’s applications is not slowing, but rather becoming more consistent.,1759,1979225,00.asp?kc=EWRSS03119TX1K0000594

Posted on 06/20