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Short Term Federal IT Security Spending to Flatten
Federal government spending on information technology security products and services is projected to increase only slightly in fiscal year 2005, with just a two percent increase over 2004 spending, according to the Federal IT Security MarketView report released today by INPUT, the source for government market intelligence. This relatively modest increase compares to a 10 percent annual increase in 2004, a 50 percent annual increase in 2003, and a 100 percent increase in 2002, compared to each prior year.
According to the report, failing agency compliance to a mandate issued by the U.S. Office of Management and Budgets (OMB) to fix IT security weaknesses is restricting the availability of funding for new security initiatives. For FY 2003, only 73 percent of federal IT systems were reported as having up-to-date security plans. "Annual security reviews by OMB and Congress are prompting agencies to make progress toward securing all existing information systems," said Chris Campbell, senior analyst, federal market analysis at INPUT. "However, these reviews have revealed a number of security lapses, unresolved from previous years, leaving many legacy systems vulnerable to attacks."
There is additional pressure on the entire security implementation process due to OMB's decision to delay funds for some agencies until they meet their security requirements. "Agencies are now being forced to seek approval to re-appropriate funds to fix security lapses in existing systems," explained Campbell. "In the end, the winners will be vendors who are able to help agencies implement security solutions across all programs at a cost that will not break the bank."
"The low spending level increases we're seeing today will be short-lived," said Campbell. "By 2006, we expect IT security spending to return to a growth curve in-line with the overall federal IT budget." Over the next five years, INPUT forecasts federal government IT security spending to increase at a compound annual growth rate of five percent from $5.6 billion in fiscal year 2004 to just over $7 billion in fiscal year 2009. 16.06.2004, INPUT
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