MetricsMetrics: Money allocated to security grows

Published 31 January 2006

Motivational speakers accentuate the positive, but fear is also a great motivator — just see what countries and companies are planning to spend on defense this year

Fear is an effective motivator. U.S. companies are expected to spend more than $10 billion this year on security compliance alone, according to AMR research. In Europe, sales of network security appliances are expected to exceed $1.4 billion in 2009, up from around $625 million in 2004, according to IDC, a market research group. The stakes are sizable. Worldwide economic damage caused by digital attacks — overt and covert — totaled $470 billion to $580 billion in 2005, according to a study by Mi2g, a London-based security research firm. Computer-network attacks last year on U.S. companies surveyed by the Computer Security Institute and the FBI cost those companies an average of $250,000 each. Attacks that resulted in the theft of proprietary information on average cost companies more than $355,000.

The European military industry has annual sales of $30 billion, though less than $5 billion has been allocated to homeland security, according to Frost & Sullivan, a London-based research company. The primary focus in Europe is on border and maritime security. Companies which are active in these areas include EADS, which signed a border control contract with Romania; BAE Systems of Britain; Thales, the French military contractor; and Smith Group.

Businesses busy in the production of vaccines to counter bioterrorism will also benefit from the growing concern with security. The U.S. Congress voted in 2003, in the Homeland Security Appropriation Act, to spend $5.6 billion on vaccines by 2008. Research on vaccines for smallpox, botulism toxin and anthrax are attracting the bulk of funding, at $1.9 billion, $1.8 billion, and $1.4 billion, respectively.

-read more in this report