NEW YORK – Medium-sized businesses – companies with 100-999 employees – in the United States are on track to invest up to $7.8 billion on data storage and security this year, up 12 percent over 2007, according to AMI-Partners Inc.

The IT market research firm’s latest report on the subject, 2007 U.S. Medium Business Overview and Comprehensive Market Opportunity Assessment, stated steady growth is due to the need to consistently update and guard against security breaches and the growing volume of employee/client data. Also noteworthy, MBs tend to go to their trusted channel partners/VARs/IT consultants for storage and security related solutions, the study found.

MBs do tend to go to their trusted channel partners/VAR for storage and security products, acknowledged Nichelle McKenzie, a New York City-based research analyst at AMI. About 20 to 25 percent of MBs prefer purchasing from someone that knows their internal IT needs and over 80 percent are updating their security products based on automatic updates sent out by their channel partners.

“Up to 86 percent of U.S. MBs reported a security breach/data loss in the last 12 months,” she noted. “The cost to these companies is about $7,000 per year. There is always a need to invest in storage and security due to the constant increase in client data and the threats to privacy. Despite the current economic downturn, 30 percent of MBs, those who are currently backing up their data on servers, are planning to invest in DAS (direct attached server) for 2008.”

In terms of security investments patterns for this year, MBs are forging ahead by planning to adopt more sophisticated security products and solutions. Over 10 percent are planning to use some type of software for encryption, identity and access management, security management, intrusion detection/intrusion prevention tool.

“Many MBs are driven to invest in security products based on awareness/marketing ads targeted towards their needs,” she said. “Approximately 81 percent use automatic updates for security solutions based on their vendor recommendations. For the coming year, MBs will seek to invest in new products for storage and security. These are two IT areas that are always changing or that requires upgrading on a regular basis.”

When handling sensitive data, security and storage are top of mind concerns among U.S.-based MBs. The AMI study found that storage and security investments account for 9 percent (about $7.8 billion) of total IT/telecom spending.

“U.S. MBs are primarily investing in software to backup PCs and servers,” she said. “Up to 90 percent of MBs stated they use data backup and data recovery software, and 30 percent are sticking with the familiar by planning to use DAS (direct attached storage) in the next 12 months.”

Preventing hard-drive failures and electronic attacks while having an adequate storage solution are the main goals for U.S. MBs. Deploying in-house or hosted data backup and disaster recovery solutions is seen as a top IT-related issue by almost 70 percent of MBs. And nearly all MBs said they backed up their data on LAN servers. This means MBs are actively competing to remain lead software and hardware IT adopters.

“The preferred on-site server data backup solution is tape-based, according to 89 percent of MBs,” McKenzie said. “An average MB deploys a storage capacity of 988 GB. MBs are looking to also invest in more advanced, greater volume storage products.”

The average spending on SAN (server attached storage) solutions by U.S. MBs is about $4,900 with 20 percent purchasing this technology in the last 12 months.

“MBs need to stay abreast of new and/or advanced software and hardware that will help them to remain competitive and compliant,” she continued. “Almost 33 percent of MBs agree that remaining compliant is the prime reason for them to invest and consistently upgrade to more advanced software and hardware for security and storage.”

Deploying a VPN (virtual private network) is an added measure to ensure that an MB will have a secure IT infrastructure; just over half of MBs polled said they plan to implement this in the coming months. Most MBs said that their data is adequately protected from electronic threats as almost all MBs use antivirus, anti-spam and anti-spyware solutions.

American MB companies use a variety of firewall devices which includes software-based firewalls running on PCs and network servers, firewalls embedded in networking hardware and firewall appliances plugged into the network. Intrusion detection, encryption and security management are top technologies for these MBs to implement in the next 12 months, the study revealed. The most popular brand for security related products was Cisco, and for storage related products Dell is the top manufacturer purchased.

This column was written by Liam Lahey of ConnectIT

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