The toll of enterprise cybercrime: $11.8 million per year ; 122 attacks per week

By , Network World |  Security, cybercrime

A survey of 60 companies in the U.S. about the impact of cybercrime indicates that the annualized cost of dealing with cyberattacks of all kinds is now $11.6 million per year on average, up from $8.9 million last year.

According to the report, the "2013 Cost of Cyber Crime Study: United States" based on extensive interviews by Ponemon Institute with company personnel, cyberattacks have become "common occurrences" with the companies that participated in the study reporting 122 successful attacks per week (up from 102 per week last year). A successful attack is defined in the Ponemon report as "one that results in the infiltration of a company's core network or enterprise systems." It doesn't include those that might have been stopped at the firewall or other gateway defenses.

The 60 companies represented in the Ponemon study were generally larger, with a minimum of 1,000 enterprise seats. Cybercrime costs to each of them were reckoned in terms of direct and indirect costs associated with loss of theft of information, disruption to business operations, revenue loss and destruction of property and equipment. The study also sought to understand costs spent on detection, investigation and incident response, containment and recovery.

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The types of attacks experienced were: viruses, Trojans, malware, botnets, web-based attacks, denial of service, malicious code, malicious insiders, phishing and stolen devices. The most costly cybercrime was related to denial-of-service attacks, malicious code and web-based attacks, the study found.

While the mean average annualized cost for each of the 60 companies to detect and recover from all of it was tallied at $11.6 million per year, the cost range was as low as $1.3 million to a high of $58 million. Industry sector played a role, with companies in financial services, defense and energy and utilities experiencing higher cybercrime costs than organizations in retail, hospitality and consumer products.

Larger companies generally had lower costs related to cybercrime than smaller companies. Smaller organizations (less than 3,400 enterprise seats) incurred a higher per capita cost of $1,564 versus larger organizations at $371.  

Dan Lamorena, senior director product marketing at HP enterprise security products, says the contrast in these costs isn't surprising since "smaller companies tend to have less resources" to cope with cyberattacks overall. He noted they are less likely to have technologies like security-information and event management (SIEM) or a security team in place prepared to respond to attacks. This works against them when serious security incidents occur.

Recovery and detection accounts for about half of internal costs on an annualized basis, according to the report, while information theft was the single highest external cost, accounting for 43% of cash outlays needed to cope with an incident.

The number of days needed on average to respond to an attack varied widely. It took on average 65.5 days to resolve attacks that came from "malicious insiders," for instance, but 10.2 days to deal with stolen devices and 6.7 days with "malware."

While the Ponemon report did not go into the same kind of detail as concerns what might happen to companies in other countries, the report did note that the U.S. had the highest costs of cybercrime, noting that other countries (see graphic) such as France, Germany and Japan were far less.

Ellen Messmer is senior editor at Network World, an IDG publication and website, where she covers news and technology trends related to information security. Twitter: MessmerE. E-mail: emessmer@nww.com

Read more about wide area network in Network World's Wide Area Network section.

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