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.
Marc van Teeseling, regional business development director at British IT services and software group Logica Plc, said he expected Asian financial houses to show increased awareness of money laundering -- disguising the origin and ownership of illicit funds by moving cash through a series of bank accounts.
"Previously, Asian banks were not pressed by regulators to focus on money laundering or freeze payments to parties involved, but after Sept. 11, the OFAC blacklist expanded to include more Asian organizations," he said, referring to the US Treasury Office of Foreign Asset Control, the money-laundering regulator.
Some Asian banks have already installed the company's HotScan product, which offers automated transaction scanning against a blacklist and audit trails, he said.
Current HotScan customers include the US Federal Reserve, Merrill Lynch, Thailand's Bangkok Bank and Japan's Bank of Tokyo Mitsubishi.
"We expect every major financial institution in Asia -- including banks, broker dealers and fund management companies -- to want to have this technology in place within the next one to two years," said van Teeseling.
"Most Asian banks currently do not realize the seriousness of this issue and that they need to solve it. But there will be a new interest in applying such controls soon."
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
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