Survey Finds CIOs Eager To Spend On Security, IT Services

CIOs are opening their wallets to invest heavily in technology to lock down systems that contain critical data, and detect threats and contain them as quickly as possible, according to a new IT spending survey conducted by financial services firm Piper Jaffray.

Security ranked as the highest priority for the second year in a row, according to the company’s fourth annual survey, which reached 112 CIOs. Three-quarters of CIOs surveyed said they expect to increase spending on security in 2015 with network firewall and endpoint security cited as the top two segments expected to see an increase, the survey found.

There is a tremendous growth opportunity for security vendors in 2015, with networking security continuing to gain much of the spending activity, said Andrew Nowinski, a vice president and senior research analyst at Piper Jaffray.

[Related: Top 10 High-Growth Cybersecurity Technologies]

"I think the high-profile breaches alone definitely made CIOs more cognizant of the holes they [need to] patch in their environment," Nowinski told CRN. "The breaches have highlighted the need for an increase in spending, and some of the repercussions that a lot of these breach entities suffered, including the loss of business, has made it clear how damaging a breach can be."

Roughly 88 percent of CIOs cited network security as their top priority for 2015, and 78 percent cited endpoint security as the top priority.

"There's still a big opportunity for next-generation firewalls, and a lot of advanced malware is easily bypassing traditional AV software," Nowinsky said. "It's become clear to organizations that they require more advanced types of technologies that can work cohesively with threat intelligence and endpoint visibility to address sophisticated attacks."

The job market for talented security professionals also continues to be hot. A separate analysis of job postings conducted by Piper Jaffray in December found the security industry posting the strongest hiring trends. FireEye, Fortinet and Symantec -- three companies covered by the financial firm -- showed increased open job postings in December. Meanwhile, the six storage companies that the firm tracks showed job posting declines.

Security vendors are hiring, but the CIO survey found IT budgets for personnel are expected to be down 3 percent, making up 32 percent of the overall IT budget. Nowinski said the funding may be shifted to software, hardware and outsourced services, where spending is projected to grow a modest 2 percent.

A study last June projected the overall costs associated with cybercrime rapidly increasing, estimating the global impact of cybercrime to be as much as $575 billion. Solution providers told CRN that organizations are increasingly turning to their managed services to proactively maintain newly implemented hardware, and mulling over long-term professional services arrangements to address and contain security incidents. Technology is only one part of the equation and, typically, ongoing maintenance is an afterthought, said Jim Matteo, a channel industry veteran and CEO of San Diego-based solution provider Bird Rock Systems.

"You need the people resources to manage the policy, maintain controls and ensure that you are getting the most value out of your investment and not just a false sense of security," Matteo said.

In addition to security, the Piper Jaffray survey, in which 47 percent of the 112 CIOs represented the technology, retail and restaurant sectors in North America, also found that mobile, off-premises enterprise software, storage and servers were areas of anticipated increased spending.

Thirty-eight percent of those surveyed said their IT hardware budgets would increase by more than 5 percent. When asked what area of the data center was in most need of a refresh, respondents indicated networking needed the most attention, followed by servers and PCs.

PUBLISHED JANUARY 8, 2015