In most industries, 2003 will be the first year in history in which more than five percent of the IT budget will be spent on security, according to Gartner, Inc. That spending level means that security spending will have grown at a compound annual growth rate of 28 percent since 2001, while IT budgets have grown at a compound annual growth rate of only six percent over that same time period.

"The focus on critical infrastructure protection means that the government, utilities, transportation and energy sectors will be forced to spend more on security," said John Pescatore, vice president and research fellow at Gartner. "In addition, increased enforcement of copyright laws and liability concerns will force universities to increase security spending. Those vertical industries will be the most attractive targets for security vendors," Pescatore said.

An overall increase in IT spending is occurring, but Gartner analysts said that does not mean security organizations can spend freely. In fact, enterprise security organizations will be pressured to control spending or face across-the-board cuts.

"Security spending can't continue to consume ever-increasing portions of the IT budget. No enterprise can afford to spend more on insurance than on new product development," Pescatore said. "By 2005, security groups that can't demonstrate security effectiveness metrics will experience flat to declining IT security funding."

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