Average business spends $15 million battling cybercrime

The average U.S. company of 1,000 employees or more spends $15 million a year battling cybercrime, up 20 percent compared to last year, according to a report released today.

Attacks involving malicious code, malware, viruses, worms, trojans and botnets accounted for 40 percent of this cost, followed by 16 percent for denial of services, 14 percent for phishing and social engineering, 12 percent for web-based attacks, 10 percent for malicious insiders and 7 percent for stolen devices.

One of the reasons for the high cost of battling cybercrime is that it takes an average of 46 days to contain a successful attack after it has been detected, said Larry Ponemon, chairman and founder at Traverse City, MI-based Ponemon Institute, LLC

“Companies spend $43,000 a day, on average, for containment costs,” he said.

The attacks are also happening more frequently, he added, and many are becoming more severe.

There was a wide variation in how much individual companies spent on battling cybercrime, from $1.9 million on the low end all the way up to $65 million a year.

Larger companies tended to spend more in total, though they had lower per-employee costs than smaller companies.

The report also looked at other factors, both organizational and technological, that can affect the cost of defending against a cyberattack.

For example, Ponemon looked at several technologies that lowered defense costs.

“Companies that invested in these technologies did that much better than those who did not,” said Eric Schou, director of product marketing for HP Security.

The best-performing technology was security intelligence systems, which, on average, saved companies $3.7 million in cost. That translates to an average return on investment of 32 percent.

Companies that used encryption extensively saved $1.4 million a year, but, because of the lower cost of the technology, saw an average return on investment of 27 percent.

Advanced perimeter controls and firewall technologies saved $2.5 million a year, for a return on investment of 15 percent.

Technologies which had a return on investment of 10 percent or less were IT governance, risk and compliance tools, data loss prevention tools, and automated policy management tools.

The biggest organizational or management factor was having sufficient budget for cybersecurity — this reduced costs by $2.8 million a year.

Next, employment of expert security personnel saved companies $2.1 million a year, and hiring a CISO or similar high-level security leader saved $2.0 million.

Substantial training and security awareness activities saved companies $1.5 million, and extensive use of security metrics saved $1 million.

Ponemon added that these numbers do not add up in a linear fashion since they can be interdependent.

The results are based on over 2,100 interviews that the Ponemon conducted over the past 11 months. The research was sponsored by HP.

The research covered six other countries besides the U.S. — the U.K., Japan, Germany, Australia, Brazil, and Russia.

Average global costs of containing a cyberbreach were $7.7 million, or about half that of the U.S. alone.