Network downtime from attack has companies losing revenue

Feb 27, 2007 4:02 PM

Large organizations are losing an average of 2.2 percent of their annual revenue -- or more than $30 million -- to network security attacks, according to a study on network downtime by analyst firm Infonetics Research.

The study, "The Costs of Network Security Attacks: North America 2007," additionally shows that small and medium organizations lose about half a percent of their annual revenue to security attacks, which can run into the hundreds of thousands of dollars.

"We suspect that if small and medium organizations had the right tools, staff and processes in place to more accurately track their downtime, the percent of total revenue it represented would be significantly higher than our study indicates -- though still not as high as among large organizations," says Jeff Wilson, principal analyst at Infonetics Research. "There are targeted security solutions available for organizations of every size, and I think once they see just how much money they're losing due to security attack downtime they'll be more interested in making special investments to put a stop to it."

According to the study:

* More than half of downtime cost is due to service degradation (vs. outright outages) for small, medium, and large organizations, and much of this is "hidden downtime," because degradations often go unreported.

* Medium-sized organizations are most vexed by client malware, while large organizations are plagued more by denial-of-service attacks and server malware. Small organizations are impacted fairly evenly by all three sources of attacks.

* Small and medium organizations have major problems with spyware; in fact, at medium organizations a staggering 40 percent of all security downtime cost comes from spyware alone.

For the study, Infonetics interviewed high-level IT professionals at 240 small (20-100 employees), medium (101-1,000 employees), and large companies (more than 1,000) in North America. Respondents reported numbers and durations of outages and service degradations due to security attacks, annual company revenue, and other basic metrics, and Infonetics then calculated revenue and productivity losses using its own cost analyzer tool, which is included in the study.

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© 2008 Penton Media Inc.

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