CORPORATE SPENDING SLOWS Security Providers Lack "Security' Contrary to initial thoughts, makers of anti-virus software not immune in slowdown.(INTERNET & TECHNOLOGY)

Byline: Donna Howell

The computer security industry, which grew up in the 1990s, has never reallyknown hard times -- til now.

While the Internet boomed, customers clamored for firewalls, virus protection and other security wares. Now those companies are cutting back on much of their tech spending.

That has security firms scrambling to prepare for a possible reversal of fortune. They're confronting a new enemy -- it's not hackers or viruses they fear, but bad financials.

And unlike chipmakers and others in mature tech industries, they can't rely on history to guide them. Security firms have to make it up as they go along.

"We've operated in a very strong economy in the last four years," said Stephen Richards, chief financial officer at Network Associates Inc. "So we don't have visibility of what happens (now) in our business."

When earnings warnings began to trickle out late last year, the security industry felt insecure. It suddenly went from devising cloak-and-dagger security plans to playing a scary stock market version of Chutes and Ladders.