Security Firms Ready For Boom Will 2003 Be A Banner Year? Threat of viruses, hacking is getting more attention; government spending rises.(A)

Byline: DONNA HOWELL

Computer security ranks among technology's most optimistic sectors as we start 2003.

Security stocks closed 2002 largely on the upside after a year of living a little dangerously.

Early on, squashed budgets kept corporate customers from buying much security, though it seemed to be a priority. There was a growing awareness of Internet threats, and the formation of the Department of Homeland Security put security in many minds.

But federal dollars haven't yet funneled to makers of mainstream tech security. Security software, like most types of software, slumped along with the broad economy for much of 2002.

Even after a two-month run-up in late 2002, IBD's 21-stock Computer Software-Services group ended the year one-third off its high.

Many other tech sectors, however, fared far worse. And several factors suggest more dollars will be free to flow to security services, software and gear in 2003.