IBM to spend record $1.5 bln on security in 2008

View of IBM headquarters at la Defense in Paris in this May 6, 2005 file photo. IBM, the world's largest technology services company, said on Thursday it will spend a record $1.5 billion next year to develop and market security products.

BOSTON (Reuters) - IBM, the world's largest technology services company, said on Thursday it will spend a record $1.5 billion next year to develop and market security products.

International Business Machines Corp announced its plans about a year after it bought security company Internet Security Systems for $1.23 billion in October 2006. IBM has integrated that business into its services division.

Its strategy is to boost revenue by selling security products alongside its bread-and-butter technology services, hardware and software, instead of losing sales to outside firms that specialize in security.

Smaller firms such as McAfee Inc, Check Point Software Technologies Ltd. and Websense Inc. say they have an edge over big technology companies like IBM because they are able to focus on security.

IBM argues it has an advantage because it is able to integrate security into every aspect of a company's technology systems operations. Key competitors in services include Electronic Data Systems Corp. and Accenture Ltd.

IBM spent more than $5 billion in 2006 on acquisitions, mainly for software companies in a drive to expand its most profitable business.