Original URL: http://www.theregister.co.uk/2001/02/12/lax_security_costs_business/

Lax security costs business 6% of revenues?

Cracker cost estimate beggars belief

By John Leyden

Posted in Security, 12th February 2001 18:00 GMT

An economist has completed a study which suggests that computer crackers cost businesses nearly six per cent of revenues.

Technology economist Frank Bernhard of the University of California studied 3,000 US businesses and concluded that lax security cost them around 5.7 per cent of annual revenue. The study was reported by NewsFactor Network, an online news service, and linked to by securityportal.com.

Apart from these bald statistics there's little or no information on the methodology of the study and certainly no analysis of what it all means.

Security is an important issue, particularly as more companies engage in ecommerce, but spreading fear through overblown estimates of the potential risk is unhelpful.

In fact it probably makes matters worse by encouraging a feeling of hopelessness in the face of the problem, thereby playing into the hands of crackers.

Last year, PricewaterhouseCoopers came up with the conclusion that cracking and computer viruses - ranging from Melissa to the Love Bug - would cost global businesses around $1600 billion in 2000, mainly as a result of lost productivity.

We always thought these figures were high but now the University of California has topped even PwC's gloomy figure. We're sure this did little harm in attracting interest to its security practice business.

Is it too much to hope people will return back to ground and make realistic assessments of security risks, based on sound methodologies, and backed up by concrete ideas about how matters might be improved?

Let's get real. ®