Survey: Mid-Sized Firms Shape Up for Security

Security outweighs cost reduction as firms' biggest concern

By James Rogers, August 22, 2008, 9:55 AM

Most mid-sized U.S. firms rate information security as a higher priority than reducing business costs, according to research released this week by services specialist Arrow Electronics Inc.

The survey of 200 U.S. companies revealed that almost 80 percent of firms rate security as a top business issue, compared to 69 percent who cited ‘cost reduction,’ and 64 percent who listed improving customer service as their major concern.

Companies surveyed by Arrow had annual revenues ranging from less than $100 million to over $1 billion.

“These findings affirm what we’re hearing from our business partners who are on the front lines with midmarket companies, the fastest growing sector of the economy,” said Mark Taylor, general manager of Arrow’s midmarket group in a statement released yesterday. “Information Security offerings are a top priority.”

These sentiments were echoed by the IT user community.

“I think that when it comes to losing data because of viruses, hackers, or other threats, that definitely is a top concern, and I would agree with the Arrow survey, [security] outweighs cost concern,” wrote David Vellante, co-founder and principal contributor of the Wikibon user group in an email to Byte and Switch. “These are often fast-growing enterprises, and while they’re cost conscious, they often can’t get the leverage a big company can get out of cost-cutting measures.”

Despite the importance of security within mid-sized businesses, only 32 percent of respondents said that they were satisfied with how their company is addressing security concerns.

”I believe that the 32 percent of respondents that are ‘very satisfied’ with how their company is addressing security concerns are deluding themselves -- they should wake up and smell the coffee,” wrote Vellante. “As an industry, since 2000 we’ve spent billions on security in the form of virus protection, network security, firewalls and other infrastructure… do you feel more secure? No way!”

The challenge for many, particularly smaller firms, is linked to the fact that IT is becoming ever more complex, according to Vellante.

”Data growth is more difficult to manage than ever,” he wrote. “The gap between our ability to manage complexity and the rate of complexity growth is widening, not shrinking, making us less secure.”

The research also reveals that some 54 percent of midsized companies feel that they could be on a ‘level playing field’ with Fortune 500-size companies if they had access to the same technology, and a third of respondents acknowledged that their IT systems are not up to date.

”For the midmarket guys I talk to, technology is not the problem,” wrote Vellante. “It’s the skills and best-practice knowledge as to how to apply the technology to create business systems -- that is what is lacking at midmarket firms.”

In addition to outdated systems, IT executives’ top challenges are “integration of technology” and “IT resources to implement functionality,” which were both cited by almost half of the respondents. Other challenges/limitations to technology investments are “user training” (46 percent) and “lack of local talent” (29 percent).

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