Despite tight spending, a complacent economy, and the perceived commoditization of IT, 66 percent of surveyed companies made room in their 2003 IT budgets to dedicate more financial resources to security programs and little else, according to META Group, Inc. This year, companies spent an average of 8.2 percent of their total IT budgets on security, up from 7.6 percent in 2002 and only 3.2 percent in 2001, according to new findings from META Group's 2004 Worldwide IT Benchmark Report.

These security programs primarily emphasized employee education, business continuity and disaster recovery. Security professionals agree that current employees still pose the biggest threat to companies' technology infrastructures, and their biggest concern is malicious attacks from viruses and unauthorized access to systems.

"Aside from security spending, we also saw an increase in development activity," said META Group executive vice president and author of the 2004 Worldwide IT Benchmark Report, Dr. Howard Rubin. "Because of tightened budgets, more emphasis was placed on integrating and extending existing applications rather than implementing new packaged applications."

Surveyed CIOs report the reason spending was so tight in 2003 is due to weak profits and current financial conditions. A substantial number say that IT infrastructure and capacity are currently sufficient, so only limited spending is required. In general, however, there is optimism that investment will increase in 2004, especially in the insurance and manufacturing sectors.

"We expect insurance and manufacturing companies to see significant gains in IT spending," said Rubin. "These are the sectors where we have seen the most efficient and effective cost-cutting measures in the last three years. These companies are positioned to take advantage of new opportunities because they have become more agile during the lean years."

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