The Big Spending On IT Security Is Only Going To Get Bigger

March 29, 2023 Timothy Prickett Morgan

Sometimes, numbers seem so big that they are almost meaningless. Depending on how you cut it, there is more than $3.4 trillion to more than $4.5 trillion in global spending on IT hardware, software, and services – not counting the payrolls for the for all of the combine IT departments of the corporate world plus all of those programmers and site recovery engineers who work at the hyperscalers and cloud builders. These are very big numbers indeed, even without those tens of millions of people on the payroll, who by our very rough estimation might account for somewhere around the same amount.

The gross domestic product of the global economy is probably on the order of $100 trillion, so somewhere between $7 trillion to $9 trillion is a pretty big portion, and makes IT about 7 percent to 9 percent of total spending.

We have never done that math before, and it is kind of shocking when you do, isn’t it? But we wanted to take that all into account as we talk about IT security, which is growing many times faster than either global GDP or global IT spending that are going to be growing by maybe 1 percent or 2 percent in 2023 if we are lucky. (Forecasts are already downshifting as the prospects for a recession in 2024 are increasing because an economy is a self-fulfilling prophecy propelled by sentiment that is fueled by economic projections that are driven by sentiment. . . .) Global GDP and IT spending may not grow at all this year, or things could rebound. It is hard to say, really, because sentiment is all over the place because people are skittish because sentiment is all over the place.

All y’alls gotta calm down a bit. Seriously. Economies never go to zero, and they very rarely drop more than 30 percent. . . . (OK, that was meant to be funny when I wrote it, but it is kinda terrifying. We’re going to be OK.)

The security of our global IT systems – now there is something to worry about as phishing and ransomware and hacking are a global pandemic. Hence, spending on IT security stuff is going through the roof.

According to a recent report from IDC, worldwide spending on IT security is forecast to be $219 billion this year, up 12.1 percent from 2022’s spending levels, and are projected to kiss $300 billion by 2026.

“Spend on security products and services will continue to outperform growth in overall IT spending,” said Serena Da Rold, associate research director of data and analytics at IDC said in a statement accompanying the forecast. “Almost all industries and company size segments will see low double-digit growth through 2026, driven by the expansion of cloud and container deployments, the need to secure remote access to resources, and the compliance requirements of privacy and data protection legislation. The more mature industries, and largest spenders, will grow faster than average as they continue to invest in cutting edge security solutions to prevent and fend off ransomware attacks on their distributed workforce and to protect critical infrastructure, which is increasingly connected to the IT network.”

Security software in one form or another represents nearly half of the $219 billion in spending in 2023, according to IDC, and has a compound annual growth rate between 2022 and 2026 (five years, inclusive) of 13.7 percent. IDC is sometimes stingy with the numbers, which is understandable since it has to make a living selling data, but that should put security software spending at somewhere around $175 billion by 2026. Managed security services – which we think are going to be a cornerstone in the IBM i security market – are expected to account for $42 billion in spending this year; IDC did not provide a CAGR, but said that IT security services will grow at 11 percent over the five year forecast.

The interesting bit, we think, is not just the amount of spending, but the relative spending across different security options.

Map your own security spending against that. See how to measure up. And if security is not kissing somewhere close to 10 percent of your IT budget, then maybe you ain’t spending enough.

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