Welcome!

SDN Journal Authors: Daniel Gordon, John Walsh, Elizabeth White, Liz McMillan, Sven Olav Lund

Related Topics: Cloud Security, Java IoT, Microservices Expo, Agile Computing, @CloudExpo, SDN Journal

Cloud Security: Article

Network-Based Attacks: How Much Can They Cost You?

Techniques and resources for IT managers to develop their own cost model

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:

  • Defining the different types of network-based attacks
  • Understanding how those attacks can affect your bottom line
  • Methods of quantifying the impact of those attacks

Types of Network-Based Attacks
There are hundreds of types of network-based attacks that can damage an organization. The most common forms include:

  • Viruses, Trojans, worms and other malware that can shut down servers and workstations, or steal data.
  • Advanced persistent threats designed to penetrate networks and surreptitiously steal intellectual property and confidential information.
  • Distributed denial-of-service (DDoS) and flooding attacks that can overwhelm servers and shut down web sites.

How Network-Based Attacks Can Affect Your Bottom Line
This is where it hurts - attacks cause two major categories of harm, regardless of the source: data breaches and loss of service.

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?
There is no one-size-fits-all cost model.

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 average total cost of a data breach: $5.5 million.
  • Lost revenue per breach: $3 million
  • Post-data breach costs: $1.5 million (everything from help desk, remediation, customer discounts and more)

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:

  • Legal settlement per event: $2,100,000
  • Legal defense per breach $582,000
  • Total average insurance payout costs per event: $3.7 million

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:

  • The revenue loss for every hour your web site is down or significantly impaired because of a DDoS attack.
  • The productivity loss for every hour a key business process is down because of malware disabling the server.
  • The hourly rate for help desk personnel to diagnose malware infections on PCs and for the support group to re-image infected PCs.
  • The cost per record for notifying customers or employees in the event of a data breach and providing credit monitoring services to them for a year.

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.

Taking Action
How does this all net out for IT managers? The bad news: network attacks are costly, disruptive, potentially catastrophic on many levels and should be avoided at all costs. The good news: there is a rich tool and service set available to help understand exactly how data breaches and loss-of-service attacks can affect your company's bottom line. By comparing these costs with the preventative costs of next-generation protection technologies you are better armed and prepared to understand and articulate the financial and strategic value of increasing investment in securing your company's network. This is not just an academic exercise, it is a business imperative.

More Stories By Patrick Sweeney

Patrick Sweeney has over 20 years experience in high tech product management, product marketing, corporate marketing and sales development. Mr. Sweeney is Dell SonicWALL’s Executive Director, Product Management, where he oversees its Network Security, Content Security, Business Continuity and Policy & Management product lines. Previous positions include Vice President of Worldwide Marketing, Minerva Networks, Senior Manager of Product Marketing & Solutions Marketing for Silicon Graphics Inc, Director of Worldwide Sales & Marketing for Articulate Systems, and Senior Product Line Manager for Apple Computer. Mr. Sweeney holds an MBA from Santa Clara University, CA.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@CloudExpo Stories
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...
In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., introduced you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He explored applications in several industries and discussed technologies that allow the deployment of advanced visualization solutions to the cloud.
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, provided a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to oper...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...