It's not quite boom time but growth remains a certainty for the IT security channel. From top-end vendors through to savvy channel partners, there is an abundance of forces driving security innovators to continue to invest in solutions that best guard end-users from malicious activities, despite the economic downturn.
And today there's all the more reason for end-users to spend money and time implementing them. Generally, such motives include protection against surging cybercriminal activity, but in these economic times there are a variety of reasons compelling CEOs to spend, such as the protection of sensitive data from spiteful former employees and compliance requirements.
In a recent research report, The State Of Enterprise IT Security: 2008 To 2009, Forrester Research reveals that this year's hot security areas include data security, application security and managed security services, with an additional focus on business continuity, access management and client security.
Another contributing factor is that businesses simply need to cut costs to compensate for reduced revenues and CEOs are on the lookout for innovative measures to help them do just that while their systems remain safe.
Who's spending?
Globally, varying reports highlight the fact that IT security spending is defying the downturn. The buoyant signs appeared just weeks after September's stockmarket meltdown. A report from Forrester Research stated that "the role of the security and risk management professional is never going to be more important than it is right now".
Similar signs appeared as the months went on. Finjan, a vendor of secure web gateway products, conducted an online survey of 200 IT and security professionals in the US in December. It revealed that IT budgets for 2009 were reduced compared to 2008, however the IT security budget outlook was more optimistic. About 38 percent of all respondents stated that they do not expect a change in their 2009 IT budgets, while 34 percent of the respondents indicated that their IT security budgets for 2009 will increase. The survey also found that the upward trend in IT security budget allocation was more pronounced in the financial and governmental sectors than in others.
Similarly, in Australia, the general view is that all verticals, especially government, are continuing to buy security, and only large projects have been put on hold.
In the case of network and gateway security vendor Check Point, government has probably spent more in the past six months across local, state and federal, with proportionally more in local government, says Scott Mckinnel, regional director for Australia and New Zealand at Check Point. "Additionally, we're getting our business out of education, infrastructure utilities, manufacturing and secondary financial institutions."
Allen Male, vice president for open source vendor Sourcefire in Asia Pacific and Latin America, says unfortunately, no vertical is immune to security threats and the bad guys are looking for opportunities across the board. He too sees significant traction in government, as well as financial services, utilities and natural resources and retail industries. "All these verticals continue to purchase but are very focused on total cost of ownership and reducing operational costs," he says.
Dominic Whitehand, manager director of distributor WhiteGold Solutions, agrees that government is still buying but he argues education will also remain strong due to the Digital Education Revolution initiative and associated funding from the Federal Government. Furthermore, he says carrier and ISP businesses will still buy security technologies. The need for security is "driven by the massive increase in content demand and needs to be provided at the gateway level to protect their end-users," Whitehand says.
However, Whitehand's confidence is greeted with caution as other sectors plummet. "The next 12 to 24 months will certainly be an interesting and perhaps nervous ride for everyone in the channel. Retailers who carry clothing and luxury items such as cars are very likely to be stagnant or very poor performers, while food retailers look set to perform very well and will therefore have an increased likelihood of spending on technology," he says.
Local reseller Dimension Data's financial year 2008 ended in September. It exceeded its targets for the year despite the credit crunch and is now six months into its 2009 financial year. It has hit all its financial targets so far, claims Darren O'Loughlin, general manager for security. "Dimension Data is measured on technology, professional services and managed services. In each metric we're clearly seeing growth. Our new financial year targets weren't set flat, they were set with growth in mind, so for us business is increasing."
The reseller's key partners are McAfee, Check Point, Nokia, Crossbeam, RSA, Cisco and Blue Coat. Based on its forecast for security projects, the future still looks really healthy. However, Dimension Data has seen a move towards professional services in sectors in which it previously may have had technology sales, says O'Loughlin. "Across the board we're engaged everywhere," he says. "Some larger projects are postponed or scaled back but from our forecast and pipeline perspective there's more than enough there to show all verticals and client requirements are still there."
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