December 01, 2001

Article at Ziff Davis Smart Business

Make way for the security economy

Everything changed on September 11, 2001. The giddy hype of the Net revolution, all but dead when 9/11 came calling, now seems naive. Today, once "revolutionary" technologies face a bleak future. Some, however, have been transformed by our newfound insecurity. The New Economy is over, but the Security Economy is just taking off. Sadly, it may have more staying power.


Wi-Fi is still hot, but the reported 802.11b security leaks, in tandem with post-9/11 paranoia, have left many IT managers on edge. "People didn't implement the security features to begin with," says John Bucher, a VP and wireless data specialist at research investment bank Gerard Klauer Mattison & Co. "Companies rolling out wireless data services for business will have to do some education with the customers, and bundle security VPN solutions." With a Virtual Private Network, even if someone intercepts your radio transmission, all they'll get is gobbledygook.


You say you wanna 3G revolution? Go to Japan. Spectrum woes in the US will likely get worse post-9/11, says Gartner analyst Dan Miklovic. His outlook: 3G will hit a brick wall as the Department of Defense uses the events to forestall any loss of spectrum. Meanwhile, however, cell phone sales have picked up; people are recognizing the value of keeping in touch with loved ones, especially in emergencies. From fear, the US may finally achieve the critical mass that makes a market.


Post-9/11, says Gartner's Miklovic, the government is less likely to hinder XML standards bodies. "Where industry consortia present the case that collaboration will improve efficiency without specifically violating anti-trust law, the government will be more willing to take a hands-off approach," he says. "The Justice Department will be focused more on terrorism issues and less on hypothetical cases of creating the potential for abuse." That B2B e-commerce revolution just might happen, after all. But, notes an Ovum report, "Growth of B2B marketplaces may slow down in the short- and medium term, as encryption and security fears grow."


For enterprises, the tightening economy of the post-9/11 era will "heighten the appeal of solutions that remove onerous licensing conditions," says Gartner's Miklovic. Linux fits the bill, and gives Bill fits, but winning cash-strapped converts won't displace Windows from the desktop. "Its biggest problem is lack of software," says Kevin Krewell, senior analyst at Cahners In-Stat/MDR, citing the ubiquity of Office. Quixotic or not, open source developers continue tilting the Windows windmill.


Windows XP is a dramatic improvement, not least because of its true multi-tasking core, says Cahner's Krewell. But he worries that Microsoft, in trying to control too much (through Passport, .NET, and the registration process) will bog people down. "One of the reasons people originally bought PCs," he notes, "was for the freedom." With tightening restrictions on physical and intellectual property, the market may come to resent Microsoft's benevolent dictatorship.


Accelerated growth can be expected in this area, says Gartner analyst William Malik. Post-9/11, he says, "Companies are beginning to confront the risks they have been running by shipping valuable information over insecure links." Of course, terrorists can use encryption, too. Should the government constrain the export of encryption technology? "Any bad guys already have the technology," says Malik. "Making it illegal will not deter them."


Market opportunities will grow for storage, backup, and security vendors, according to a Cahners In-Stat/MDR report. With less air travel, look for a greater dependence on virtual meeting and online collaboration technologies, and with more companies spooked about disasters, expect data center services to pick up. Authentication technology -- facial, retinal, voice, and fingerprint -- should also see a boost, says the firm.