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India is third in terms of internet users. Its internet protocol (IP) traffic would grow sixfold from 2012 to 2017 at a compound annual growth of 44 per cent, said a KPMG report. Due to this, the spend would depend more on the business model rather than size of the company, said some officials.
In 10-15 years, investment in cyber security has remained focused on threat prevention rather than detection and solution. But where the threats are getting more advanced, implementation of a stronger security system has made its way to the priority list of companies.
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Over two years, security spend has risen between 20 per cent and 35 per cent in India, Sanjoy Sen, senior director at Deloitte India, said. "Indian enterprises have looked at technology as well as non-technological holes to address the threat issue."
IT research and advisory company Gartner also sees the Indian market for security infrastructure (software and hardware) and services (consulting, MSS, implementation and support) together growing to $1.4 billion by 2017 from $989 million this year.
"There is no way that you can prevent every threat. In India, most enterprises have predominantly spent towards preventive measures like Firewall in the past," said Ambarish Deshpande, managing director, India, Bluecoat Systems.
“Since the industry has now matured, it (the industry) is expected to focus on spending towards more enhanced tools to tackle advanced cyber threats. Detecting the threat, analysing it and then spend good amount of intelligence to remove it. This is what will drive the IT security spending growth,” Deshpande added.
"It is expected to grow exponentially in coming years," he said.
Attacks like advanced persistent threat or distributed denial-of-service (DDoS) seemed to be among toppers for the last six months, said industry officials. “We are seeing different kinds of threats, which have also been on the rise targeting organisations or businesses with varied intentions," said Sidharth Pisharoti, country sales head of India at security solutions company, Akamai Technologies. "Since most of these are well-planned and targeted attacks, an advance damage control system has to be in place."
Though most industry officials remained unanimous regarding the increase in IT security spend by Indian enterprises, the view on the spending pattern varied.
“The overall spending figure on IT security will vary from vertical-to-vertical and depend on the extent of security implementation," said Sen of Deloitte India. “Most importantly, it will have to be aligned with the risk involved in the business and is seen proportionate to the rise in risk and growth involved in the business," Sen added.
“Spending is expected to increase from top organisations like the Fortune 100 or Fortune 500 companies across all verticals," said Deshpande of security solutions company Bluecoat. “Companies, which have something of their own like intellectual property or money, that can cause heavy damage to their business are being targeted. The intention is to put the organisation out of league," he said.
“Those businesses, which have higher dependency on internet like e-commerce or those with sensitive information such as BFSI, telecom, or the government, will see security spend on high priority," Pisharoti said. “Though the spend might not be as drastic as double in coming years, increase is surely there and will depend on the industry or the individual company as to what is its threat perception,” he added.
With the IT security spend on a gradual rise since the last two years, there have been some sectors that have proactively invested towards implementation of security, while some still need to buck up.
“The banking sector has always been proactive towards IT security spend and will continue to be so, given the sensitivity of information we handle," said a top ICICI Bank official. “Apart from increase in threat perceptions for this sector — internal as well as external — sophistication is also increasing (in the sector) and due to this we see (IT security spend) budgets increasing going ahead,” he added.
The auto segment too is looking at increased spend going ahead.
“There is immense scope for automation in the auto sector and so with flexibility going up, even threat perception will go up. This will take the IT security spend proportionately higher in the sector in coming years,” said Jayant Magar, vice-president, IT & CIO, AMW Motors. “The spend has already been on the rise in this sector by about five per cent every year and going ahead too it might rise by same percentage annually,” Magar added.
“Telecom is a saturated market and competition is high. So security spend is certainly crucial for the sector and is seen only going upwards in coming years,” said Manoj Shahane, senior manager at Vodafone Shared Services.
“In the electrical segment, computerisation is at an initial stage and so security spend, though exists, is at a very nascent stage, less than one per cent of the total revenue,” said G Sowmiyanarayana, general manager (IT-Infrastructure), Bajaj Electricals.
Though various sectors are at different stages of security spend and implementation, e-commerce, which relies heavily on online services is among the reactive segments for cyber security.
“The e-commerce industry could have been a little bit more proactive towards implementing security solutions,” said Sidharth. “Security solutions were always there not that they have come up now.”
On the other hand, the government though a little slow does not compromise on security spend due to the sensitivity of data it has, officials said. “It (the government) makes sure that they invest in the best technology,” added Pisharoti.
Gartner has seen a keen interest from enterprises in India on enhancing their security operations capabilities to protect their organisations from advanced targeted attacks. “Increased security threats from hacktivists and cyber crime syndicates have caused more enterprises to re-look at their monitoring, incident response and forensics abilities,” principal research analyst Sid Deshpande at Gartner said.
All in all, the major sectors in the domestic market are active and no one is reactive in nature anymore. As increased threats are now a reality, companies know they have to act.
