NEW YORK, USA: Home-based businesses (HBBs) in the United States are on track to invest a sizeable US$1.3 billion on IT security and storage-related solutions this year. HBB owners are focusing on areas such as data security, data backup and disaster recovery, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc.

The bulk of the spending last year was on security software, storage hardware and security services. These comprised nearly 87 percent of all security and storage spending. By 2009, spending in just these three areas will exceed US$1.1 billion among US HBBs.

"Many factors are fueling this increased spending," says Jacqueline Atkinson, New York-based analyst at AMI. "One of the biggest is the expanded use of the Internet to extend business reach and administer online applications. HBB owners have to be better equipped to safeguard sensitive customer and personal information and adequately store and manage documentation."

Alarmingly, 40 percent of HBBs in the U.S. experienced loss of company data in the past year as a result of an electronic attack, while over 33 percent suffered a loss due to hard-drive failure. And while 79 percent of PC-owning HBBs report having some form of IT security in place, this still leaves close to three million vulnerable to data loss, steep recovery costs or business downtime.

"Nonetheless, this is an attractive market for security and storage vendors focused on home-based businesses—we see robust plans from new buyers this year," says Ms. Atkinson. "New security investments are likely to go toward anti-virus, anti-spam and firewall, as these solutions have gained the most acceptance in the HBB space."

With regard to IT storage, U.S. HBB owners rely more heavily on compact disks (CDs) and external PC drives to backup data files. However, backing up data over the Internet is emerging as a significant trend. HBBs are opting for offsite storage solutions, and reveal the strongest adoption plans for online storage and backup this year.

"The online marketplace is increasingly becoming a main resource for HBBs," says Ms. Atkinson. "They want easy to access technology that they can fit-and-forget." Vendors such as McAfee and Symantec who offer across-the-board solutions with simple online administrative tools have the strongest presence in the HBB market. This is a key opportunity as the majority of HBBs report re-investing in software and services on an annual basis.

Nearly 15 million HBBs in the U.S. access the Internet. The sheer size of the market presents new opportunities for vendors to capitalize on as HBBs invest more and more in a wide spectrum of security and storage software applications, hardware, and support services—installed in-house and increasingly deployed over the web.