New Federal Budget Proposal Raises Government Security Spending, Ups Opportunity For VARs

Cybersecurity made a strong showing in the 2017 budget proposal, with President Barack Obama proposing a $19 billion cybersecurity budget for the federal government in the upcoming year.

The budget proposal would represent a big-time jump in security spending for the federal government, up 35 percent over this year's funds, and could be a big boost to business for federal security VARs, partners and analysts agreed.

The drastic budget increase proposal, called the Cybersecurity National Action Plan (CNAP), comes on the heels of a rough year for the federal government when it comes to information security, most notably around the massive data breach that hit the Office of Personnel Management in June of last year that compromised the information of more than 21.5 million federal employees. CIA Director John Brennan and Department of Homeland Security Secretary Jeh Johnson also had their emails hacked last year.

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More recently, reports emerged from technology news site Motherboard that a hacker had the personal information of 20,000 FBI employees and 9,000 DHS employees. The information included names, job titles, email addresses and phone numbers, the report said, and the hacker planned to publish the information, a threat he later followed through on.

The hacker also has further employee information on Department of Justice employees, the Motherboard report said, though it does not appear that those records have been published yet.

As part of a total $4.1 trillion spending plan for 2017 proposed Tuesday, Obama suggested a series of near-term actions that would help reassess the way the government handles cybersecurity. The boost in the federal cybersecurity budget could be a huge win for security VARs that specialize in the federal market, said John Caucis, senior analyst at Technology Business Research.

"Do I think that [the budget increase will] be felt by the federal IT contractors? Absolutely," Caucis said. "I think it's something they can look forward to in 2017."

Those changes came alongside the creation of two new groups by executive order, one called the Commission on Enhancing National Cybersecurity that will be made up of public and private sector individuals to provide security recommendations, and the other called the Federal Privacy Council to coordinate citizen data collection and deal with associated privacy concerns.

Tom Patterson, vice president and general manager of global security at Blue Bell, Pa.-based Unisys, said these two commissions will help promote public-private information sharing and help get the government in lock step with the rest of the industry.

"These strong cybersecurity moves from the White House mirror what is happening in industry today, with greater focus and resources spent on security, while looking to increase innovation in addressing these issues," Patterson said. "By greatly expanding two-way public-private information sharing with the establishment of the commission, the White House has the opportunity to expand the dialogue between industry and government for the betterment of both."

In his budget proposal, President Obama also proposed the appointment of a federal chief information security officer, who will report to Chief Information Officer Tony Scott. The new CISO will have a proposed $3.1 billion budget dedicated to helping the government modernize its legacy IT technology.

Under the proposed budget, agencies will be required to identify and prioritize their at-risk assets and, from there, take steps to improve their IT. They will also be asked to take advantage of government-wide shared services for IT and security, instead of each having their own siloed technology.

The budget to promote training, security resources, incident response teams, loan forgiveness for technical talent and programs for general security awareness. There will also be a focus put on securing critical infrastructure.

These cybersecurity changes could be felt in the market as more of a ripple effect, TBR's Caucis predicted, as a boost in federal security spending could signal other industries, particularly the health-care sector, to ramp up their own budgets.

"There's some more momentum than we have seen in recent years. They certainly have the opportunity, the federal government does, to set the tone and take the lead and bring the commercial sector along with them," Caucis said.