"Almost certainly people are experiencing cuts," says Pete Lindstrom, an analyst with the research firm Spire Security. "If you think of security as a cost center within a cost center [IT], ... then security is a great place to start," he adds. "There are companies that are discounting their security in order to drive bottom line," says Charlie Meister, executive director of the University of Southern California's Institute for Critical Information Infrastructure Protection. "I've seen a pretty significant cutback over the past six months," says Rich Cummings, CTO at HBGary, a security company that has clients in the financial services industry.

The risk of cutting security is that a security breach can be disastrous. The Ponemon Institute pegs the average cost of a data breach at US$6.7 million.