India SMEs To Spend $291Mn On Data Security In 2009: AMI

Small and medium enterprises (SMEs, or companies with up to 999 employees) in India are on track to spend $291 million on security-related investments in 2009—according to a study by New York-based Access Markets International (AMI) Partners.

“Data explosion, electronic threats and increased usage of web-based solutions are some of the triggers for the adoption of security solutions by India SMEs,” says Abhilash DB, analyst at AMI-Partners. Indian SMEs are realising that data security is not just adopting security solutions but that formulating structured policies is also a critical factor.

The AMI study notes that SMEs are the most vulnerable segment in terms of data security. The two main reasons for this are the increasing instances of cyber threats and a lack of expertise among SMEs in handling such threats. Security software accounts for 73 percent of the total SME security expenditure. “The bulk of this amount is spent on anti-virus software. Security for SEs (is confined mainly to the deployment of an anti-virus solution and the majority of them lack proper processes and policies for security management,” says Abhilash.

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The dependence on Web-based enterprise solutions and sharing of critical data on corporate networks is rising rapidly among MEs. As employee size increases, the thrust on information security also rises. Even for basic security solutions, upper segment MEs (500 to 999 employees) lead the way in terms of technology adoption. Adoption of network firewall and IDS/ IPS shows significant growth among businesses in this category. On one hand the growth rate of traditional security solutions such as anti-virus is falling; on the other hand, anti-spyware and anti-spam solutions will record growth rates of nearly 26 percent among Indian SMEs this year.

The AMI study notes that manufacturing is increasingly becoming one of the most data-intensive verticals; security managers of these firms are concerned about the possibility of data leakage of process information, product design, shipping transactions, and inventory and customer details. Information security investments are also increasing in the micro-verticals involved in accounting, auditing and book keeping, advertising and PR, research consulting, computer and data processing and legal services.

Managed security services (MSS) is one of the key trends in the SME security space. The AMI study says that the market for managed security services is expected to grow at approximately 21 percent this year. But the main challenge of service providers will be to convince SMEs to lose their inhibitions in trusting external organisations to handle their internal security. AMI foresees a greater traction in this space once SMEs start realising that security is better managed by MSS providers than the generalists in their IT department. Another trend is the increasing adoption of unified threat management (UTM); traction will increase as more SMEs look for a proactive and unified approach to securing IT infrastructure.