Feds' Security Spending On a Roll: Over 8 Percent Growth Over Next Five Years

The U.S. federal government's IT security spending will jump from $7.9 million to $11.7 billion in 2014 thanks to tightening federal security regulations, a 300 percent jump in attacks on feds' networks and systems during the past five years, and the Obama administration's emphasis on security, according to new data from research firm Input.

"We see this as a bright spot in federal spending," says John Slye, principal analyst at Input, which expects a compound annual growth rate of 8.1 percent for security from 2009 to 2014. "[Security] seems fairly immune to some of the economic pressures we're seeing...factors like the huge risk of exposure to the government and that security has taken front and center in the Obama administration" are some of the reasons for this spending, he says.

Input says the top 10 executive branch departments -- the Office of the Secretary of Defense, U.S. Air Force, Homeland Security, Army, Navy, Department of Energy, Health and Human Services, Justice Department, Treasury Department, and Commerce Department -- account for 65 percent of all federal IT spending.

Not surprisingly, intelligence agencies and the Defense Department lead overall federal IT spending growth, with an annual growth rate for spending of 8.4 percent and 8.2 percent, respectively, followed by civilian agencies at 7.9 percent. Intelligence spending will jump from $1.9 billion this year to $2.8 billion in 2014; Defense, from $3.8 billion to $5.6 billion; and civilian, from $2.3 billion to $3.4 billion.

Security services represents the biggest chunk of the federal security spending budget, with $4.4 billion today versus $2.7 billion for software, and less than $1 billion for equipment. According to Input, the services sector will hit $6.6 billion in 2014; software, $3.9 billion; and equipment, $1.2 billion.

"We expect security to keep this rate of growth through the foreseeable future," Slye says.

Slye says legislation or a federal directive can create a market. "We've seen that with the identity and access management market that FISMA and HSPD12 created," he says.

Input last year forecast a 7.7 percent compounded annual growth rate for federal security spending through 2013.

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