Report: Cybersecurity leads homeland security spending growth

Cybersecurity spending is the fastest-growing category of homeland security spending for 2005 through 2010, according to a new Frost & Sullivan report.

Federal, commercial and civilian budgets expenditures for network and IT security are expected to increase to nearly $22 billion by 2010, up from $7.5 billion currently, according to Matthew Farr, senior homeland security analyst for the Palo Alto, Calif.-based research and consulting firm.

Farr is the author of the report, titled "Total Analysis of Current and Future U.S. Homeland Security Market Opportunities," released today.

The annual growth rate for cybersecurity spending is anticipated to range from 15 percent to 20 percent over the next five years, he said.

The cybersecurity category is expanding faster than other types of spending because it encompasses commercial, civilian and government sectors, Farr said. In contrast, spending on items such as biological-attack detection devices, immigration control and border protection is primarily limited to government agencies, Farr said.

"Every sector has a need to make networks secure," Farr said. "They are designing and implementing secure IT architectures." Most of the IT security activity will be in the commercial sector, he added.

Another fast-growing category is the Homeland Security Department's Science & Technology Directorate, which is expected to grow from about $900 million currently to approximately $2.5 billion by 2010, according to the report.

DHS' Information Analysis and Infrastructure Protection Directorate is expected to nearly double to $1.5 billion, up from about $800 million currently, during the next five years.

Immigration Control & Enforcement is likely to reach $6.5 billion, compared to $3.8 billion now; while the Transportation Security Administration is likely to spend $7.5 billion by 2010, up from $4.5 billion now.

Farr said the predicted budgets for homeland security are likely to increase more than his estimates because of the presumed terrorist attacks on the rail system and buses in London earlier today. The British public transit system shut down as the city mobilized to cope with dozens of deaths and hundreds of injuries caused by the coordinated explosions.

"This will affect us more than the [March 2004] Madrid bombing," Farr said. "We are closer with the English, and as President Bush was sitting with Tony Blair when this happened, this will affect him on a more personal level."

"Complacency was quickly setting in," Farr added. "How do you justify budgets when there are not attacks?"

But that is a trend that will likely be reversed, Farr said.