The federal spending boom on IT security products and services is slowing according to a new report by Input, a Reston, Va.-based research and marketing firm. According to the report, spending will increase at a compound annual growth rate of 7 percent from $4.2 billion in fiscal year 2003 to nearly $6 billion in fiscal year 2008.

"In the two years following the terrorist attacks on Sept. 11, 2001, the federal IT security market experienced spending increases of over 200 percent. After this explosive growth, we are now seeing budget increases return to more normal levels," said Payton Smith, manager of Federal Market Analysis at Input. "However, federal agencies still face substantial challenges implementing infrastructure protection and security plans, so reliance on the vendor community for support in this area will remain high."

The report says oversight from Congress and the U.S. Office of Management and Budget (OMB) are the primary drivers of agency investments in IT security products and services.

"Annual security reviews by OMB and Congress are showing some progress among federal agencies, but they still reveal significant shortcomings in terms of risk assessment, security planning and certification," Smith said.

The report also states that the Department of Homeland Security (DHS) is serving as a coordination point for government-wide security initiatives. The DHS Directorate for Information Analysis and Infrastructure Protection is the new home for several of the most important security organizations in government.

"Despite the Department of Homeland Security's new leadership position in government-wide information security activities, responsibility for securing specific agency systems will still reside squarely on the agencies themselves," Smith added.