Security concerns are causing network executives to accelerate some technology deployment plans and put the brakes on others, according to the ninth annual Network World 500 survey.

Not surprisingly, security spending is on the rise, fueled by an increase in blended threats and hybrid worms. Among survey respondents, 50% report their companies are increasing security spending. Firewalls, VPN software and antivirus software will top respondents' security purchase lists over the next 12 months.

At the same time, respondents said security vulnerabilities are roadblocks to certain technology deployments. Forty-two percent said security concerns are slowing down implementation of wireless technology, as well as remote or teleworker applications and e-business applications.

As for whether technology spending in general is on the rebound, the message is mixed from the 500 companies interviewed (all of which have multiple sites with internetworked LANs and WANs and annual network-related expenditures of more than $10 million). Nearly 40% of respondents plan to spend more in 2003 than they did last year. Meanwhile, about 30% face budget decreases and 32% expect budgets to remain flat, according to the survey, conducted jointly by Network World and Research Concepts in February and March.

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Jefferson County, Colo., won't have to cut its IT budget, says Dave Gallaher, director of IT development. Its IT budget has been stable for years - it didn't go up significantly in the boom years, so Gallaher avoided having to make drastic cuts - and it will stay that way for now. "We never went nuts when the good times were going on. We've always had to be extremely pragmatic and very frugal," he says. "And we've been able to do pretty much anything we wanted to do because we have been frugal."

The need for greater storage capacity appears fairly universal: On average, respondents expect to increase storage capacity by 74% in the next 12 months and 120% in the next two years.

The most common reason companies expect to need greater storage capacity is for consolidation of storage resources, which 65% of respondents cited. Other drivers include implementation of specific enterprise applications such as CRM (64%), virtualization of storage resources (62%), Web and e-business applications (58%) and e-mail attachments (57%).

The Pennsylvania State University invested in IBM's high-end Enterprise Storage Server - known as Shark - this year to consolidate its mainframe and open systems storage. "Stand-alone storage pools are being phased out," says Robert O'Connor, IS manager at the university in State College. The result is better storage management and improved performance, he says.

A little security

On the security front, Penn State will spend money this year to improve its network monitoring, firewall and security filtering capabilities, O'Connor says. The university also is rolling out voice over IP (VoIP) campuswide - an initiative Penn State shares with many NW500 survey respondents.

Technology developments over the last year are fueling greater interest in VoIP, according to 61% of respondents. Some users (44%) are interested in the long-term cost-saving benefits of VoIP, but most are not yet impressed by new VoIP applications - only 17% cited the promise of applications such as unified messaging as a compelling reason to implement VoIP. Even fewer cited reduction in toll charges (14%) and ease of managing a single network (13%).

Concern over quality-of-service guarantees (71%) and voice quality over the IP network (70%) topped respondents perceived drawbacks. Hardware and software costs are the sixth-most-common VoIP drawback, cited by 49%.

Waterbury Hospital has experimented with VoIP in a wireless environment, but the trial didn't convince Jim Olson, CIO at the Connecticut medical facility. "Considering the quality of service, this project has a lot of maturing to do before we would replicate the experiment," Olson says.

Jefferson County's Gallaher has looked at VoIP for some time, but so far hasn't been able to justify the equipment investment. Each time the county has explored the cost savings potential, it has been able to negotiate more favorable terms with its local dial-tone provider, he says. "Are we ready to give up our dial tones yet with our Baby Bell? Not quite, although it's getting mighty tempting," Gallaher says. He expects the county will begin deploying VoIP within two years.

Wireless technology also is attracting interest. More than half of respondents (56%) say wireless technology will be a top priority for their IT group over the next 12 months. The desire to increase productivity of mobile workers is driving wireless implementations.