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Government, military scramble for encryption technology

Spend will grow more than 150% by 2007

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The government and military are investing more heavily in encryption technology as a defence against hackers who are beginning to deploy more sophisticated cracking techniques.

That's the conclusion of a study by industry analysts Frost & Sullivan who said sales of encryption technologies to military and government agencies, along with contractors, are growing from $176 million to a projected $457.6 million by 2007.

"Hackers are no longer solely focused on disrupting service and implanting viruses," said Frost & Sullivan senior analyst Brooks Lieske.

"They are also doing less noticeable, but potentially more damaging activities such as reading e-mail and gathering restricted information from Internet sites and computers."

Frost & Sullivan reports that international agencies ranging from the National Security Agency (NSA) to NATO are increasing network defence spending and modernising equipment to ensure privacy. Interestingly, Frost & Sullivan reports a particular interest from the military in wireless encryptors.

Contractors to the military are as wary of corporate espionage from competitors as subversive attacks, according to Lieske, who added military suppliers require the same high-speed encryptors as their clients in order to comply with government security regulations.

Brian Gladman, a noted encryption expert and ex-technical director at NATO, said that the military had always led the commercial sector in adoption of encryption technology, and wider uptake of the technology depends in large part in making it easier to use.

Traditional government has used custom designed cryptographic products but it is beginning to adopt commercial technology, according to Gladman, who added that, for example, the UK's Ministry of Defence has begun using PGP to protect its less sensitive traffic. ®

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