Security Fears Not Enough To Overcome Budget Limits

Although many solution providers expected security spending to take off after the Sept. 11 terrorist attacks, companies remained frugal as they weathered the continued sluggish economy,a scenario that likely won't change in 2003, they said.

"We see very, very tight budgets going forward," said Jonathan Gossels, president of SystemExperts, a security consulting firm based in Sudbury, Mass.

Companies that did spend invested in basic security technologies such as antivirus and intrusion detection rather than big-ticket items, he said. Gossels expects those products to remain popular in 2003, along with configuration monitoring software.

Tom Malkus, president of Data Processing Sciences, a Cincinnati-based integrator, said he isn't expecting a big surge in security spending. Federal regulations such as HIPAA are too vague to spur sales, he said.

"It's a healthy market.

It's going to be a growing market, but we're not going to see any huge increases," Malkus said. "We'll just see consistent, steady growth as the market evolves and matures."

Because companies held back on IT spending in 2002 and instead performed patches to their networks, there is a lot of pent-up demand for security projects, said Tom Gobeille, president and CEO of Network Computing Architects, a Bellevue, Wash.-based integrator.

"I think we'll see a lot of improvement and increased activity in the second quarter," he said.

While 2002 was disappointing for some security providers, the year beat expectations for others. Denver-based Accuvant opened its doors for business last year and surpassed its goals despite the slow economy, said Scott Walker, the company's vice president. Walker said he expects improvements in security products in 2003.

"We think the next generation of security technologies will be easier to use, they'll be more powerful, and their price points will be in line [with last year's if not better," he said.

Rich Forsen, president of ForSense Solutions, Herndon, Va., said his firm sold more than $500,000 worth of SonicWall security products in 2002,double its 2001 total. He attributed the rise to heightened security awareness and the proliferation of VPNs.

"We're shooting to double it again," Forsen said of his SonicWall-related revenue.

But the fact that few organizations implemented security measures in the wake of the Sept. 11 attacks leaves the nation at risk for cyberterrorism, Gossels said.

"We've just been lucky. There's no effective prevention in place to stop cyberterrorism," he said. "The vast bulk of our nation's critical infrastructure is woefully unprotected."