Vista Research: Security Spending Continues to Increase But Companies Cannibalize IT Budgets to Pay the Bill

Product Satisfaction Remains Low, Opening Opportunity For

New Sector Leadership

Vista Enlists Harris Interactive for Financially Based Polling Results

Sep 10, 2002, 01:00 ET from Vista Research

    NEW YORK, Sept. 10 /PRNewswire/ -- Information security (IS) spending has
 shown some signs of increasing significantly since September 2001, but
 companies have cannibalized other parts of their information technology (IT)
 budgets to pay for it, according to a new survey released today from Vista
 Research, an independent provider of unbiased financial research and
 reporting. The survey also revealed dissatisfaction with existing
 technologies, and that industry leadership has not been clearly established,
 creating greater opportunities for emerging IS or other established technology
     In August 2002, Vista Research commissioned Harris Interactive(R) to
 survey among 290 decision makers and IT purchasing managers about their IS
 purchasing intentions as well as their perceptions of existing IS technologies
 and leading vendors. The report covered sixteen leading security vendors
 including Checkpoint Software, Cisco, Computer Associates, IBM, Internet
 Security Systems, Microsoft, Network Associates, Symantec, VeriSign and
     "We found the initial results somewhat surprising and definitely
 interesting. The bottom line is that there is room for improvement among the
 established players in the information security space, as well as some
 interesting opportunities for emerging or established technology companies to
 gain a stronger foothold through acquisition or product innovation," said
 Monique Elwell, senior financial analyst at Vista Research and the author of
 the report.
     Forty-eight percent of primary decision makers increased IS budgets since
 September 2001, and of those more than half indicated they made an increase of
 10 percent or more. However, only 21 percent reported a significant increase
 (more than 15%) in IS spending in that time period, with 39 percent of those
 who increased their spending significantly, indicating that they cannibalized
 other parts of their IT budgets to pay for additional security. As for future
 expenditures, 57 percent of respondents indicated a planned increase in IS
 spending over the next 12 months.
     Survey results also showed that anti-virus and access control systems had
 high satisfaction ratings among primary decision makers, but 27 percent of
 these primary decision makers indicated dissatisfaction with existing firewall
 technologies and 36 percent voiced disapproval of intrusion detection systems.
 Other security measures for virtual private networks (25%); encryption
 technologies (22%) and biometrics (20%) also fared poorly, with wireless
 security achieving the highest levels of dissatisfaction (53%).
     "Information security is top of mind among senior IT management,
 purchasers and decision makers, but the burning questions are which vendors
 offer the best, most innovative security solutions, and which ones will still
 be around in the long-term as the IT industry continues its current path of
 consolidation," said Igor Stenmark, senior advisor of research methodology at
 Vista Research.
     According to Stenmark, the sector's leadership position is undefined.
 Based on the survey results, no one company achieved significant market
 penetration. In fact, only a few vendors -- Cisco, Microsoft and VeriSign
 -- are expected to receive a meaningful spending increase (10 percent or
 more). Strong brand recognition for several of the non-traditional IS
 providers, such as Microsoft, IBM and Cisco, give these companies a greater
 perception of IS leadership among primary IT purchasers and decision makers.
     The survey is the first in a series of similar surveys from Vista Research
 and Harris Interactive, and supports Vista's recent report on the IS sector,
 Information Security Overview and Investment Outlook.
     (Methodology:  This survey was conducted by Harris Interactive online
 among 290 key decision makers and IT purchasing managers from July 26 to
 August 2, 2002. They were sampled from the Harris Poll Online database
 consisting of several million individuals who have agreed to participate in
 online research surveys.)
     About Vista Research's Information Security Overview and Investment
 Outlook Report
     Vista's Information Security Overview and Investment Outlook report
 identifies several themes and scenarios including potential consolidation
 among IT security vendors and the effect this consolidation will have on the
 technology rebound. Additionally, the report offers Vista's clients an
 in-depth examination of the investment opportunities that exist in the
 Information Security sector and an overview of the growth potential for the
     About Vista Research
     Vista Research publishes independent, industry-specific financial research
 that offers institutional investors a unique blend of operational expertise
 and forward-looking, industry-specific research and support. Founded in 2001
 by Jack D. Hidary and Murray Hidary, founders of EarthWeb Inc., the privately
 held firm is headquartered in New York City. Vista Research senior management
 also includes Stanton Green, Managing Director, who was previously a Managing
 Director at Epoch Partners, and held positions at Morgan Stanley and Merrill
 Lynch. Vista can be found online at
     About Harris Interactive(R)
     Harris Interactive ( is a worldwide market
 research and consulting firm best known for The Harris Poll(R) and its
 pioneering use of the Internet to conduct scientifically accurate market
 research. We combine the power of unique methodologies and technology with
 international expertise in predictive, custom and strategic research.
 Headquartered in Rochester, NY, with offices across the United States, in the
 United Kingdom, in Japan and a global network of local market and opinion
 research firms, the Company conducts international research with fluency in
 multiple languages. EOE M/F/D/V
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SOURCE Vista Research