Asian companies squeezing their information technology budgets because of the global economic slowdown are belatedly realizing they can't cut too many corners in the new security-conscious world.
Despite spending restraints, firms around the region are preparing to boost expenditure on secure networks, crisis-proof communications and fraud management following the Sept. 11 attacks on the US, technology suppliers say.
"The interest is rippling out across the board in Asia, particularly Taiwan, Japan, China, Hong Kong and Singapore," said Mack Leathurby, director of solutions for US communications equipment maker Avaya Inc, whose customers include Singapore Airlines and Hong Kong telecoms carrier Pacific Century CyberWorks.
Leathurby said Avaya's Asia-Pacific customers are paying increased attention to technology that provides secure Internet connections for communicating with clients and suppliers -- so-called virtual private networks (VPNs).
"Some of the smaller enterprises are more cautious because budgets are very tight given the slow economy but they're also afraid if they do not get these systems, cyberterrorism will catch up with them."
US telecommunications giant AT&T Corp said it expects a similar shift in demand in Asia.
"With Sept. 11, customers are more conscious of the need for stable networks that can function reliably through a crisis," said Choo Hock Lye, AT&T's regional general manager.
"Once the physical world becomes more unstable, the ability to communicate becomes critical."
With budgets tight because of the global slowdown, analysts say Asian tech spending is expected to focus on specific, mission-critical infrastructure, at the expense of general IT services.
IT spending in the Asia Pacific region ex-Japan is forecast to rise just 1.3 percent this year, according to analysts at International Data Corp (IDC), rebounding 13.5 percent next year, when the US economy is expected to lead a global recovery.
With many companies grounding employees after the attacks on New York and Washington, Avaya's video conferencing software has also been in demand, Leathurby said.
"People are talking about leveraging the Internet to do more video conferencing," he said, adding that one of Avaya's healthcare clients was planning to implement distance training for doctors via high-resolution video.
Disaster recovery plans and the ability to work from home or a hotel have also taken on a new sense of urgency.
"We've seen a lot of interest in wireless local area networks [LANs] in Asia as it allows a rapid set-up of temporary networks, allowing companies to re-establish systems and communications quickly in the event of a disaster," Leathurby said.
Hotels in Asia have also shown interest in wireless LANs.
"They have been hit because people travel less now, so they're looking at ways to attract business by catering to employees who need to connect back to their home networks," he said.
Few of these technologies are new. But their take-up in Asia has not been widespread, said IDC Asia Pacific senior analyst Robin Giang.
"It's largely infrastructure constraints in the region that have prevented wide scale adoption," he said.
With Washington blaming Osama bin Laden and his well-financed network for the attacks, the spotlight has fallen on technology that helps stem the flow of dirty money into the global financial system.
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