Lack of IT Spending Attributed to High Cost of Security Breaches
More than half of businesses around the world allocate 5 percent or less of their IT budget for network security, while security breaches cost more than $15 billion annually. Datamonitor expects security spending to increase over time, however, with more than $30 billion to be spent on security issues in 2005. Many e-businesses are still ignorant about the risk they are exposing themselves to," explained a Datamonitor analyst. "Despite the fact that a significant number of companies have already
suffered problems with unauthorized access, over 30 percent have yet to implement adequate security."
More about Security Issues
Most American small business owners are concerned that their websites could fall prey to unwanted intrusion, according to a recent survey of 700 business owners. Eight out of 10 respondents gave website security issues top billing, yet less than half of those business owners have actually invested in Web server security. Respondents' greatest concerns included the possibility of data access and damage (71 percent), followed by the possibility of website attack or hacker intervention (60 percent) and potential viruses (64 percent). "Web security is a serious issue in the online IT marketplace today," one security specialist explained. "Small businesses now need to be proactive in their approach to security. Hacker attacks and website intrusions can come unexpectedly at any time, and can cause irreparable damage to a business."
Profits Come Later
After seven years of research, ActivMedia analysts have found that Internet companies that have been around three or more years are more likely to be profitable than those companies in the early stages of website development. The older, more established and profitable companies usually only spend $40,000 a month on their websites, as compared to newer companies that are still launching and fine-tuning their Web presence. The newer companies typically spend about $107,000 a month on their websites. In addition,
about one-third of profitable sites engaged in paid promotional activities, which last year had a $52,000 promotional budget. Promotional budgets for unprofitable sites, meanwhile, were three times that amount.
B2B Sites Activating Faster Than Expected
Industry-sponsored business-to-business marketplace sites are going live faster than expected, Jupiter researchers say. More than 41 percent of the top 58 industry-sponsored marketplaces (ISMs) founded this year can now conduct transactions online, while another 33 percent are expected to launch this month. This busy-beaver activity has made ISMs one of the fastest growing of all online markets, most likely because of their ability to leverage inherent advantages of money, talent, transaction liquidity and gains of their market participants. "From this vantage point, ISMs stand out as a bright spot in a disappointing digital landscape," a Jupiter spokesman said. "However the real test will be for these businesses to create real value and functionality for marketplace users."
Keep Adding the Gewgaws for True Online Success
IDC researchers have found that companies are now scrambling to include ever more complex capabilities in their Internet sites to increase their overall value. In turn, this is fueling enormous opportunities in the Internet services market. "No longer is relatively simple front-end Web development the project de jour. In its place is a more complex project involving creating e-commerce sites that need to be incorporated with back-end systems," an IDC analyst said. "The increased requirements of these projects are causing more companies to seek the assistance of outside service providers. This trend is creating huge opportunities for service firms to offer consulting, implementation, and operations services in the Internet services market." IDC examines the issue in depth as part of its "Internet and eCommerce Services Market: A Competitive Segmentation and Analysis for the Year 2000" report.