Indian SMBs to invest $134 mn 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 SMBs (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.