Indian SMBs to invest $134 million on security this year: AMI

Small and medium businesses in India are on track to cross
$133.6 million on beefing up their IT security solutions this year, buoyed by
their adoption of sophisticated enterprise applications and advanced storage
solutions. That's a jump of 53 percent over last year, which in turn saw
infotech security spending leap 63 percent over 2004, according to the latest
study by New York-based AMI-Partners.

As India's small and medium businesses (with employee sizes
between 1 and 999) embrace the benefits of Internet access, network connectivity
and increased storage capacity, IT security has become an important focal point
for these businesses. "Many SMBs have seen the loss in productivity and
have experienced the damage that online viruses can inflict," says Neha
Jalan, Kolkata-based Analyst at AMI-Partners. "With the explosive growth of
the Internet, the advent of broadband 'always-on' technology, and the
increased prevalence of viruses and malicious worms, data security has assumed
greater significance."

One of the primary factors hindering the widespread use of security solutions
has been a lack of awareness amongst Indian SMBs. However, the

upsurge in security solutions adoption is the result of pressure from both
internal and external factors. "These include deployment of broadband
connectivity, integration of various business applications, usage of hosted
applications and increased interaction with global business partners," said
Jalan. More than a third of SBs (1-99 employees) and 42 percent of MBs (100-999
employees) rated the need to enhance enterprise IT security as
"important" and "very important."

"India SMBs are gradually progressing from the first
stage of security solutions adoption to deploying sophisticated bundled
offerings," commented Jalan. AMI's latest studies on India's small and
medium businesses show that 83 percent of SMBs have installed anti-virus
software on their PCs and 30 percent of medium businesses also deploy anti-spam
software. Additionally, the majority of LAN small and medium businesses have
deployed a software-based firewall on their PCs or LAN servers.

Given their limited budgets and in-house IT skills and
resources, SMBs need products that are easy to adopt and maintain. Until now,
India SMBs have been focused on deploying stand-alone security solutions.
However, as vendors offer point-based solutions to counter different kinds of
attacks, users face the challenge of integrating these various solutions. This
has led to the emergence of integrated security solutions as one of the
fastest-growing segments in the SMB security market. "India SMBs prefer to
manage their security deployment internally, and as most are still investing in
basic security products, this strategy has been effective," remarks Jalan.

"Nevertheless, as businesses progress towards deploying firewalls, VPNs
and IDS, managed security services offer the twin benefits of convenience and
cost-effectiveness." Less than a tenth of medium businesses currently
invest in managed security services, but this service is anticipated to grow
much faster than other traditional security solutions in the near future.

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