2010: Enterprise Software Spending to Make a Comeback
Recently I was quoted in an article about software spending predictions for 2010. The focus of Jennifer LeClaire's article surrounded the results of Gartner's recent survey where they polled approximately 1,000 IT professionals worldwide during this past April and May. "Respondents were asked whether they expected their 2010 IT budget to be below, be the same as or exceed the IT budget for 2009. Thirty percent of companies in Asia/Pacific, 28 percent in North America, and 25 percent in Europe, Middle East and Africa (EMEA) said they expected their 2010 IT budget to increase." The survey results were not a surprise to my team and me, especially because we truly believe a good portion of spending will center around security: Mike Logan, president of Axis Technology, a provider of IT and data security offerings used by the likes of Bank of America, Wachovia and Citigroup, said the spending rebound is indicative of a positive turn in the economy and it couldn't have come at a better time. "The area where we are seeing a sharp increase in spending is security-related products," Logan said. "Not only have there been a lot of breaches over the last year that warrant companies making an investment in this area, there is also an unprecedented number of both federal and state data-privacy laws going into effect that carry hefty penalties." Logan pointed to the newest U.S. Department of Health and Human Services regulations, the Federal Trade Commission's Red Flags Rules, and the Massachusetts' MGL 93H Data Privacy Law as examples of stricter requirements. Any company that does business with even one person based in Massachusetts will be held accountable for any data breaches, resulting in penalties of $5,000 per record exposed -- no matter whose fault it was. "These new laws could easily bankrupt companies of all sizes in any industry, so companies would much prefer to make the software investment now rather than risk paying a fatal price later," he said. When you look back on the past couple of years, the number of data breaches and the resulting fallout for each were astounding. It got to the point where the reactions quickly shifted from "oh no, how could this happen?" to "yeah yeah, here's another one..." So in the new year every company should make a resolution to stop trying to save a few measly dollars at the expense of their customers' data. Step up and do the right thing. When you make the investment to safeguard your data, you are preserving not only your customers' private information, you are more than likely saving your company's reputation.