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Cybersecurity could be a bright spot in otherwise flat IT budgets

Cybersecurity spending is expected to accelerate during the next five years at the Defense Department and civilian agencies, despite overall flat information technology budgets, according to a new industry forecast.

The increasing severity of computer network breaches likely will influence funding levels, with Defensewide cyber spending starting at more than $8 billion in fiscal 2012 and reaching more than $13 billion by fiscal 2016 if the country suffers a cyberattack resembling what Defense Secretary Leon Panetta often refers to as the next Pearl Harbor. Officials from TechAmerica Foundation, a nonprofit research affiliate of the industry association TechAmerica, briefed reporters on Monday about the predictions.

"I think a lot of this is going to be needs driven," rather than fueled by cyber policy reforms pending in Congress, said Dan Heinemeier, TechAmerica's chief administrative officer.

In fiscal 2012, the Army and Air Force each are projected to spend $1.1 billion on cybersecurity, the Marines and Navy likely will expend a combined $900 million and the rest of the military services and agencies should disburse a total of $5.1 billion, the forecast indicated.

The breakdowns are based on the assumption that Congress will reach a deal by Dec. 23 on achieving $1.2 trillion in deficit reductions on top of nearly $1 trillion already cut through discretionary spending caps. The research, which was conducted by experts from member companies, was partly derived from more than 300 interviews with federal government executives, congressional staff and think tank analysts.

A Pearl Harbor-scale intrusion in 2012 that knocks out, for instance, financial systems or power grids could pump up military information security spending to $9 billion, according to the study. President Obama has asked lawmakers to appropriate only $3.2 billion for overall Defense cybersecurity.

If hackers unleash increasingly successful exploits during the next five years, the Pentagon's cyber budget could near $10.5 billion by fiscal 2016, the researchers predicted. Even no change in cyberstrike intensity could put spending at more than $8.5 billion that year.

The foundation anticipates the governmentwide IT budget to stay flat at $81.2 billion over the forecast period, with Defense and civilian IT budgets remaining steady at $38.4 billion and $42.7, respectively.

In fiscal 2012, civilian agencies will consume a minor slice of the cyber pie with a total budget of $2.1 billion, according to the findings. Obama's fiscal 2012 budget requests $936 million for cyber operations at the Homeland Security Department, the civilian agency responsible for protecting nondefense computer networks in the public and private sectors.

Foundation officials said they expect cyber spending to rise at nondefense agencies but could not provide specific figures.

Agencies are fortifying security to minimize the risks of deploying new cost-saving technologies, such as mobile devices and pay-per-use cloud applications delivered online, said Robert Haas, a foundation spokesman.

"We do see cyber security as one potential bright spot, as there may be some growth in that arena," Heinemeier said. "I wouldn't go as far as to say we're going to see sharp increases."

Still, funding levels across government probably will remain in flux through the 2012 election, as debt reduction politics sway spending decisions, foundation officials said.

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