SMB Security Spending Neared $2 Billion in 2003

Total U.S. small- and medium-business (SMB) spending on IT security reached $1.8 billion in 2003, according to a new report by AMI-Partners. The report states that spending was spurred in part by the growth of antivirus solutions, content filtering, and firewall technology. AMI forecasts this spending to increase by 29 percent annually in the coming years. Based on AMI's most recent surveys, more than 1.2 million small businesses and 67,000 midsize businesses in the U.S. indicated they want to enhance their IT security. At the same time almost 2.8 million small businesses with PCs remain without any form of IT security, including antivirus protection, which the report says is a great opportunity for security vendors. The survey found that while antivirus software and firewalls are becoming commonplace among SMBs, these businesses are also increasingly using other security measures like intrusion detection, VPNs, remote data backup, redundant systems, and remote network security management. The spending on security is being driven by the increasing use of Internet and networking-related technologies by SMBs, which increase their risk and vulnerability to various forms of unwanted intrusions. AMI estimates that almost 6 million U.S. SMBs access the Internet, of which nearly 3.3 million use broadband. "A principal driver of security solutions is the fact that SMBs are a lot more connected with their customers and suppliers than ever before," says Andy Bose, CEO and founder of AMI. "Increasingly, SMBs are using the Internet a lot more to stay connected with customers, so awareness and need for security is much higher today." Key trends identified by the survey include vendors integrating security features into their hardware or software to make them generally safer. Also, some vendors are offering security solutions via the ASP model, which includes automatic updates of software and virus definitions (minimizing the time and technical skills required by the users to maintain the service). Finally, vendors are also increasingly offering IT security as an outsourced managed service, whereby businesses can outsource their entire IT security operations to an external service provider. "Security is such an intangible, it can slip the mind of SMB IT staff," Bose says, "so vendors are trying through different offerings to not only make it easier for SMBs to upgrade their security systems, but also to add different pieces of a security solution as the business evolves."