BANGALORE, INDIA: Small and medium businesses (SMBs, or companies with up to 999 employees) in India are on track to spend US$289 million on security related investments this year, up a robust 32 percent over last year.

Medium businesses (MBs or companies with 100 to 999 employees) are generating the majority of this increased demand accounting for 54 percent of the country’s total SMB security expenditure. Small businesses (SBs or companies with up to 99 employees) are also expected to have an almost equal share in the total India SMB security spending pie. These facts are evidenced in studies by New York based Access Markets International (AMI) Partners, Inc.

“Protection from ever increasing electronic threats is the biggest driver for adoption of security solutions by India SMBs,” says Abhilash DB, Analyst at AMI-Partners. “India SMBs are realizing that having an effective security policy will boost their chances securing a link within global supply chains. That’s because web-enabled activities in day to day business makes an organization highly prone to security threats.”

The evolution of the paperless office has given a new impetus to the need for effective information security, as have regulatory laws that require archiving and protection of confidential consumer data. “MBs are no longer finding solace in stand-alone anti-virus solutions,” Abhilash says. “They want capabilities such as anti-spam, firewall and intrusion detection, both on the client (desktop/notebook) and at the gateway. Vulnerability assessment tools are becoming important as the larger MBs are becoming increasingly more proactive towards information security management.”

The AMI studies note that SMBs are the most vulnerable segment of all businesses in terms of data security. “Security software accounts for 74 percent of the total SMB security expenditure,” Abhilash says. “The majority of this spending is on antivirus software. Security in SBs is limited mainly to the deployment of an antivirus solution and they lack proper security management.”

Dependence on the Internet and on corporate networks is rising rapidly among MBs. As the employee size increases, the focus on information security also rises. Even for basic technologies, the largest MBs (500 to 999 employees) lead the way in terms of penetration. The adoption of network firewall and intrusion detection is showing significant leaps among businesses of this size.

On the other hand, traditional security solutions such as anti-virus are experiencing slower growth rates, while emerging solutions such as anti-spyware and anti-spam have exhibited the highest growth compared to previous years. Anti-spyware and anti-spam solutions will record growth rates of nearly 40 percent among Indian SMBs this year. The market for managed security is also expected to grow at approximately 40 percent this year.

The top three key trends among India SMBs are UTM (Unified Threat Management), BCS (Business Continuity Solutions) and MSS (Managed Security Services). As SMBs are more focused in simplifying their infrastructure management, they are looking for an all-in-one security appliance, which UTM will provide. As such the India SMB segment offers a huge untapped opportunity for third-party security solution providers that can monitor the network in real-time for virus attacks and unauthorized network intrusions.