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Network-Based Attacks: How Much Can They Cost You?
Techniques and resources for IT managers to develop their own cost model
By: Patrick Sweeney
Jul. 30, 2013 01:38 PM
Every business acknowledges that network security is critical. But how do you quantify the business value that a secure network provides? And how does an enterprise evaluate and justify investing in network security products like next-generation firewalls, intrusion prevention systems and unified threat management appliances?
While there is no exact formula or "cost of attacks" calculator, there are some useful guidelines and research studies that can provide techniques and resources for IT managers to develop their own cost model. There are three core areas that are important for assessing the impact of network-based attacks and the "prevention value" of next-generation firewall technologies:
Types of Network-Based Attacks
How Network-Based Attacks Can Affect Your Bottom Line
Data breaches are always a topic of sensational news coverage, as they result in confidential information being captured and surreptitiously removed out of the organization into the hands of criminals or competitors.
The damage caused by data breaches is visible and very painful. They can be financial (lost revenue, legal and regulatory costs, lawsuit awards and fines) "soft" costs (loss of customer goodwill and loyalty) and loss of competitiveness (through loss in intellectual property). Companies that have suffered data breaches spend an inordinate amount of time and money in detection and technical remediation costs identifying and blocking attacks as well as assessing damage and putting corrective measures in place. In addition, the negative publicity over a data breach lasts far beyond the attack itself.
Denial-of-service attacks result in computer systems - workstations as well as web, application or database servers - being degraded or completely disabled.
The damages in this scenario can also be catastrophic. Commerce slows to a crawl or stops altogether, so revenue is directly impacted. Day-to-day processes are interrupted or employees cannot do their jobs because the network is down. As with data breaches, there's a real cost associated with IT and support staff having to diagnose problems, coach employees, restart services and re-image PCs.
How to Estimate the Costs?
Two independent sources that can help IT quantify the impact of network-based attacks can be found in a March, 2012 study from Ponemon Institute, and the NetDiligence® Cyber Liability & Data Breach Insurance Claims Study published in October, 2012.
The Ponemon Institute conducted in-depth interviews late in 2011 with 49 U.S. companies in 14 industries that had experienced the loss or theft of customers' personal data. Some of the key findings:
The per-record figures - which are based on fairly large quantities (typically 100,000+ records) - can give IT managers at least some sense of the cost associated with data breaches, scaled to the size of the enterprise and the number of threats typically faced.
The NetDiligence study analyzed published a study of 137 events between 2009 and 2011 that resulted in insurance companies making payouts on cyber liability claims. Average payouts:
While these two studies measure different elements of the costs associated with network attacks, they are consistent in one sense - both illustrate just how costly network attacks really are to a company's bottom line, its reputation and its ability to compete.
Beyond these numbers, there are some back-of-the envelope calculations that can help justify the investment needed for next-generation network firewall technologies:
Two additional techniques may be helpful in estimating the costs of attacks. Some organizations have created detailed estimates of possible future ramifications by conducting "war game" simulations. These involve gathering a cross-section of company staff from IT, marketing, HR, legal and other functions, and running through an attack scenario. These exercises not only help quantify costs, but often turn up unexpected effects - for example, contractual obligations or the regulatory impact of data breaches.
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