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RSA: IT security budgets faring well

Driven by compliance demands and the current threat environment, budgets for IT security have fared better than most other sectors during the economic downturn. This was the consensus from a panel called “Lessons Learned: The State of the Security Business -- The Analyst's View,” at the RSA Conference on Wednesday morning.

“It's tough times,” said moderator Sarah Friar, the lead software analyst at Goldman Sachs. Global spending for IT security is down; CSOs polled by Goldman said budgets were down two percent. But, she said, there were indications that things would get better in 2010.
Though Chris Christiansen, VP, security products/services at IDC, pointed out that nine percent of respondents polled by IDC said IT budgets would be cut, he agreed indications hinted spending on IT security budgets wouldn't be affected significantly.

John Pescatore, research director and VP at Gartner, said that he saw not one security market, but different sectors. Though some have seen slowdowns, others have fared better.

“Innovation is still driving things,” he said, adding that money is beginning to trickle into government agencies.

Top of mind for CIOs is cost controls, Pescatore added. Proving to executive management that IT matters to the business is also vital.

“In 2007, we saw spend on venture. Now people are waiting to see how bad things will get,” said Nick Selby, VP, research operations at The 451 Group. He said he's started to see inklings of the bottom, and is seeing acquisitions as a sign of strength in the security market.

“Mid-size companies with great technology can be picked up for a song,” he pointed out, adding that deal-flow in the security space is not as bad as in other sectors. There have been 83 deals in the past 12 months; down from 95 in the previous 12, he told the large gathering. “It's a great time to be buying.”

Goldman's Friar agreed that the market is seeing the beginning of merger and acquisition activity, and said that the market is no longer on a huge slide. But Pescatore said many deals were like sinking ships joining together in the hopes of creating a solid entity.

The hopeful news, said Christiansen, is that we will see a resurrection of spending in some sectors, with the U.S. leading the rest of the world out of the pit. He singled out China as having done a good job in its economic recovery efforts and he continues to see good growth in Eastern Europe, Germany and Brazil.

What's driving growth, one panelist said, was SaaS and virtualization for SMBs. But there was some disagreement over whether the market is enterprise driven, with some members of the panel arguing that consumers are rational, with limited budgets, and must match spend against risk; others pointed out that enterprises must budget for more protection.




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