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Security on a Shoestring? More Budget Means More Detection

Companies that spend the smallest share of their IT budget on security see fewer threats, but that's not good news.

Ignorance may be bliss, but not in security.

Companies that spend less on security — as a percentage of their information technology budget — saw fewer threats in the previous year, but mainly because reduced visibility and their lack of expertise failed to find existing threats, market intelligence firm Forrester Research states in its "Global Security Budgets in 2021" report, published on March 26.

The report, based on a survey of nearly 3,700 budget decision-makers, found that about half of budgets is allocated to security products and half to services, across all levels of security spending. Among the companies that spent 0% to 10% of their IT budgets on security, however, almost half had not detected a breach in the past 12 months, compared with a quarter to a third of companies that spent more.

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On its face, the data appears to be good news, but the companies are actually failing to detect attacks rather than avoiding them, says Jeff Pollard, vice president and principal analyst at Forrester Research. 

"When you dig into it and talk to organizations of that size, they don't have the situational awareness and visibility that [those companies who spend more] have," he says. "So, for the companies spending 0% to 10% of their budget, the issue is not spend less and get breached less, it's spend less and fail to detect the attacks until much later."

With the pandemic forcing companies to make significant changes to their IT infrastructure, securing increasingly cloud-based and distributed business assets will likely require more budget. Between 2019 and 2020, about 60% of companies increased their security budget, according to the Forrester Research report

Other market researchers have noticed a similar trend. The average company spent 10.9% of their IT budget on security in 2020, about $2,700 per employee on average, according to an August report by consulting firm Deloitte and the Financial Services Information Sharing and Analysis Center (FS-ISAC).

Forrester expects the pandemic to affect security organizations differently, depending on the amount spent on security: 0% to 10%, 11% to 20%, and 21% to 30% of the IT budget. The average company in the lowest tier spent 16% on security staffing, compared with 12% in the highest tier. Meanwhile, the average company in the highest tier spent 16% on cloud security, compared with 13% for companies in the lowest tier.

"For organizations in the lowest-budget tier, headcount remains the largest expense followed by the costs of maintaining and licensing on-premises technology," according to the report. "Organizations with larger budgets tend to focus on expanding cloud security capabilities to secure disrupted business models as they accelerate the use of cloud security technologies due to the pandemic."

The level of security maturity appears to correlate with the level of investments, especially the strategic goals of the companies at each level. The two top priorities for the lowest tier of security budget, for example, focused on establishing security in public clouds and aligning the business and security groups, while the top-two priorities in the highest security tier focused on instilling a culture of security in the company and aligning business and security groups.

Those different goals stand out, says Pollard.

"What really stood out was that, looking at the 21% to 30% bracket and seeing that ... they were really thinking about creating a culture of security throughout the organization," he says. "When you look at the differences between the different investment levels, you see a lot of focus on technologies, but it's that focus on culture that will create a lasting change."

Increased security budget does not necessarily correlate with fewer breaches. Instead, more budget seems to increase detection. Almost half — 49% — of the lowest security-budget tier detected no breaches in the past 12 months, compared with 31% of the highest level of security budget. Conversely, only 20% of the lowest tier detected three or more breaches in the past 12 months, compared with 43% of the companies that spent the most on security.

Yet more spending does not necessarily mean better security, says Pollard. The problem with many companies is that they lose track of security spending and pay for similar products in services in different silos. This "expense in depth" — borrowing a term used by Gartner — means that security programs are not spending efficiently.

"Security leaders are focused on both innovation and making budget more efficient," he says. "Rationalizing budget and making sure that you are spending on the right technologies is incredibly important."

Veteran technology journalist of more than 20 years. Former research engineer. Written for more than two dozen publications, including CNET News.com, Dark Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards for journalism, including Best Deadline ... View Full Bio

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