QUANTOS SaRL - U.S. Small and Medium Business Spending on IT Security will Reach $1.4 Billion in 2002

U.S. Small and Medium Business Spending on IT Security will Reach $1.4 Billion in 2002

Total U.S. small and medium businesses (SMB) spending on IT security will reach $1.4 billion during 2002, spurred in part by the events of September 11. AMI forecasts this spending to increase by 31% annually to reach over $5.3 billion by 2007.

The focus on IT security has increased very significantly since September 11, 2001 and nearly one-sixth of all SMBs with PCs cited September 11 for enhancing/deploying IT security. Yet, almost 2.2 million SBs with PCs still remain without any form of IT security.

The above findings were released by New York-based Access Markets International (AMI) Partners, Inc., a consulting firm specializing in IT, Internet, telecom and business services market intelligence, trends and strategy with a strong focus on global small and medium business (SMB) enterprises. AMI conducts IT industry's most comprehensive annual tracking surveys of small and medium business (SMB) enterprises in several countries including the U.S., France, Germany, U.K., Australia, China, India, Japan, South Korea, Brazil and Mexico.

The survey found that while anti-virus software and firewalls are becoming commonplace among SMBs, they are also increasingly using other security measures like intrusion detection, VPNs, remote data backup, redundant systems, remote network security management, etc.

"U.S. small and medium businesses are realizing that as they increase their use of Internet-based applications that expose their customers' as well as their own business data, IT security would have to become an integral part of their operations" said Anil Miglani, Vice President at AMI. Reflecting this new focus on IT security, many SMBs give high importance to security when purchasing new products, developing new systems and selecting IT service providers. Nearly one-fifth of the US SBs that don't currently sell their products and services via the Internet cited security as the reason for not doing so.

The spending on security is being driven by the increasing utilization of Internet and networking related technologies by SMBs, which increase their risk and vulnerability to various forms of unwanted intrusions by others. AMI estimates that over 5.5 million U.S. SMBs use the Internet, of which nearly 56%, or slightly over 3 million use broadband. In addition, about 93% of all MBs and 40% of SBs use LANs.

The rising inter-connectivity among businesses is also leading many large businesses to influence their customers and suppliers to enhance their IT security. Over half of all MBs and over one-fourth of all SBs sell to large businesses and 87% of MBs and 62% of SBs report purchasing goods and services from large businesses. "Their large purchasing power gives large businesses tremendous ability to influence their SMB business partners," said Andy Bose, CEO and Founder of AMI Partners. Indeed, one-third of all MBs and 13% of all SBs reported that their large customers are influencing them in their use of new technologies.

SMBs are also increasingly relying on VPNs (virtual private networks) to provide secure remote access to their employees (who either sometimes work at home or travel for business purposes) as well as their branch offices and customers & suppliers, who have direct access to the SMBs' information sources. AMI estimates that nearly one-quarter of a million SBs and 40,000 MBs currently use VPNs and projects these numbers to increase to almost 3 million SBs and 91,000 MBs by 2007.

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