With viruses and worms popping up in the news more and more often – like the infamous Blaster worm that infested computer networks in August –security incidents seem to be increasing at an epidemic rate. According to a study by the CERT Coordination Center at Carnegie Mellon University, 76,404 incidents were reported globally in the first half of 2003, a number close to the total of 82,094 for all of 2002. Between 2001 and 2002, there was an overall increase of around 56 percent. To attempt to reign in these network-security threats, global security spending will continue to increase rapidly. Security regularly tops the spending priorities cited by chief information officers in surveys. And the research firm IDC projects that by 2006, the global IT security market will reach $45 billion, almost triple the $17 billion spent in 2001. With a compound annual growth rate of 25 percent, security hardware is expected to expand the quickest. Security services will be close behind, at 24 percent, and security software will have growth of 15 percent. Still, competition among security companies is fierce. Companies in the sector were overcapitalized a few years ago and consolidation through acquisitions is common.

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