The Sept. 11 attacks and continued fear of cyberterrorism are driving companies to pump one out of every 10 dollars of their 2002 IT budgets into security spending, according to results of new research conducted by Computerworld and J.P. Morgan Securities Inc. in New York.
Of the 174 IT managers polled online during the last two weeks of October, 53 percent said they expect to devote a higher proportion of their total IT budgets to security compared with spending in 2001. Only 5 percent said they expect their security spending to decline.
Overall, corporate security spending across a range of industries will surge 43 percent next year, with virtual private networks, antivirus and intrusion-detection software, and Secure Sockets Layer products topping the list of technologies companies will deploy over the next 12 months.
Companies with annual revenues of more than US$500 million will spend the most on security, which will account for 11.2 percent of their total IT budgets, up slightly over the average of 10.3 percent for all companies. In comparison, security spending across all companies accounts for an average of 7.4 percent of this year's IT budgets.
In the weeks since Sept. 11, various IT managers have commented that getting money budgeted for security is far easier than it has been in years past.
"Right now, I don't have to justify any expenditure effort on IT security," said Ralph Menzano, CIO at the Southeastern Pennsylvania Transportation Authority in Philadelphia. Menzano told colleagues at a recent CIO roundtable discussion on the topic of return on investment in IT that among other measures, the regional transportation system is considering implementing a biometric security system to verify employee identities.
In New York, Paul Raines, global head of information risk management at London-based Barclay's Capital, said the investment house is "revisiting" its 2002 computer security budget with an eye toward bolstering the company's contingency planning and disaster recovery capabilities.
What's particularly notable is that most companies are beefing up security spending while their total IT budgets are either decreasing or staying flat. More than half -- 59 percent -- of companies said they expect their 2002 IT budgets to decline or stay the same their 2001 budgets.
But curiously absent from a top spot on the list of technologies they plan to invest in most heavily next year is authentication. Smart cards and public-key infrastructure products ranked sixth and eighth on the list, with just 21 percent of respondents naming smart cards as a technology they plan to deploy over the next 12 months.
According to security analysts at J.P. Morgan, one reason may be that authentication systems typically start at more than $100,000, with full implementations requiring even more spending. In today's increasingly slowing economy, such projects are likely to be among the first that are curtailed, analysts said.