Indian SMBs to spend US$161M on security

An average 43 percent of small and midsize businesses have experienced malware attacks and hard drive failures over past year, says AMI-Partners.

Small and medium-sized businesses (SMBs) in India will spend approximately US$161 million to beef up their data security in 2007, up by 41 percent over last year, according by AMI-Partners.

In its survey released Wednesday, the research house said almost 50 percent of India's medium-sized businesses--with between 100 and 999 employees--and 36 percent of small-sized businesses--with fewer than 99 employees--had experienced malware attacks and hard drive failures over the past 12 months. Faced with this, more SMBs now recognize a greater need for better data protection.

"Electronic attacks are considered to be the single largest threat to data security, and protection from viruses, worms and hackers remains the primary reason behind SMB investments in IT security," Neha Jalan, a Kolkata, India-based analyst at AMI-Partners, said in a statement.

"Increasing awareness of the loss in productivity and the damage that online viruses can inflict has resulted in data security becoming a focal point for Indian SMBs," Jalan added.

"Indian SMBs are interested in reducing the number of different security products and brands they use, [and] this has led to the popularity of integrated security suites which bundle multiple products, such as antivirus, antispam, e-mail protection, firewall and others in one packaged offering."

AMI-Partners noted that SMBs in the country require security products that are easy to adopt and maintain, and until now, have been focused on deploying basic standalone security products.

But while standalone antivirus tools still dominate the SMB security market, secure content management software solutions will account for a greater share of these companies' expenditures, said AMI-Partners.

Jalan said: "Although SMBs are now more open to considering investments in security solutions, their limited in-house IT skills and resources pose a major barrier in their deploying and managing a sophisticated security infrastructure."

The analyst added that the shortage of qualified personnel within SMBs is another limiting factor. In addition, she said, as security is "dynamic", knowledge and software that seem to be currently adequate will soon become obsolete.

Jalan said: "As businesses progress toward deploying firewall, VPNs (virtual private networks) and IDS (intrusion-detection system), managed security services will offer the twin benefits of convenience and cost-effectiveness."

Meanwhile, the AMI-Partners study also noted that medium-sized businesses in India are increasingly influenced by regulatory compliance requirements in making their IT investments. More than half of these businesses surveyed listed regulatory compliance as an important factor driving their IT security deployment, while just under 25 percent of small-sized businesses attributed their investments to regulatory pressures.

In addition, growing competition and partnerships with large organizations have also influenced the IT infrastructure of Indian medium-sized businesses, said AMI-Partners. The study noted that 52 percent of respondents said large customers and suppliers had influenced investments in security products.