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Chapter: Security in Computing : The Economics of Cybersecurity

Data to Justify Security Action

Interest in society's reliance on information technology has spawned a related interest in cybersecurity's ability to protect our information assets. However, we lack highquality descriptive data.

Data to Justify Security Action


Interest in society's reliance on information technology has spawned a related interest in cybersecurity's ability to protect our information assets. However, we lack highquality descriptive data.


Data are needed to support cybersecurity decision-making at several levels.


National and global data address national and international concerns by helping users assess how industry sectors interact within their country's economy and how cybersecurity affects the overall economy. These data can help us understand how impairments to the information infrastructure can generate ripple effects on other aspects of national and global economies.

Enterprise data enable us to examine how firms and enterprises apply security technologies to prevent attacks and to deal with the effects of security breaches.


In particular, the data capture information about how enterprises balance their security costs with other economic demands.


Technology data describe threats against core infrastructure technologies, enabling modelers to develop a set of least-cost responses.


If we were looking at cost of labor, raw materials, or finished goods, we would have excellent data from which to work. Those concepts are easier to quantify and measure, governments assist in collecting the data, and economists know where to turn to obtain them. What makes these statistics so valuable to economists is that they are comparable. Two economists can investigate the same situation and either come to similar conclusions or, if they differ, investigate the data models underlying their arguments to determine what one has considered differently from the other.


Data to support economic decision-making must have the following characteristics:


Accuracy. Data are accurate when reported values are equal or acceptably close to actual values. For example, if a company reports that it has experienced 100 attempted intrusions per month, then the actual number of attempted intrusions should equal or be very close to 100.


Consistency. Consistent reporting requires that the same counting rules be used by all reporting organizations and that the data be gathered under the same conditions. For example, the counting rules should specify what is meant by an "intrusion" and whether multiple intrusion attempts by a single malicious actor should be reported once per actor or each time an attempt is made.


Similarly, if a system consists of 50 computers and an intrusion is attempted simultaneously by the same actor in the same way, the counting rules should indicate whether the intrusion is counted once or 50 times.

Timeliness. Reported data should be current enough to reflect an existing situation. Some surveys indicate that the nature of attacks has been changing over time. For instance, Symantec's periodic threat reports [SYM06] indicate that attack behavior at the companies it surveys has changed from mischievous hacking to serious criminal behavior. Reliance on old data might lead security personnel to be solving yesterday's problem.


Reliability. Reliable data come from credible sources with a common understanding of terminology. Good data sources define terms consistently, so data collected in one year are comparable with data collected in other years.


Sidebar 9-2 describes some of the data available to support cybersecurity decision-making.


Notice that some of the results in Sidebar 9-2 present trend data (37 percent in 2003 versus 65 percent in 2005 use security standards) and others report on events or activities (organizations have hardened their systems). However, few of the results contain data that could be used directly in a security investment business case.


Security Practices


The Information Security Breaches Survey (ISBS) is a particularly rich source of information about cybersecurity incidents and practices and provides a good model for capturing information about cybersecurity. A collaborative effort between the U.K. Department of Trade and Industry and PricewaterhouseCoopers, this survey is administered every two years to U.K. businesses large and small. Participants are randomly sampled and asked to take part in a structured telephone interview. In late 2005 and early 2006, over a thousand companies agreed to participate in the study. Additionally, PricewaterhouseCoopers conducted in-depth interviews with a few participants to verify results of the general interviews.

The survey results are reported in four major categories: dependence on information technology, the priority given to cybersecurity, trends in security incidents, and expenditures on and awareness of cybersecurity. In general, information technology is essential to U.K. businesses, so computer security is becoming more and more important. Of businesses surveyed, 97 percent have an Internet connection, 88 percent of which are broadband. More than four in five businesses have a web site, most of which are hosted externally. Small business is particularly dependent on information technology: Five of six said that they could not run their companies without it. Many of the respondents rate security above efficiency when specifying corporate priorities.


Nearly three times as many companies have a security policy now than in 2000. Almost every responding organization does regular backups, and three-quarters store the backups offsite. These organizations are proactive about fighting viruses and spam; 98 percent of businesses have antivirus software, 80 percent update their antivirus signatures within a day of notification of a new virus, and 88 percent install critical operating system patches within a week. Moreover, 86 percent of companies filter their incoming e-mail for spam. They view these controls as sufficient and effective; three-quarters of U.K. businesses are confident or very confident that they identified all significant security breaches in the previous year.


Economic Impact


But what is the economic impact of the policies and controls? Although the large increase in security incidents during the 1990s has stabilized (62 percent of U.K. companies had a security incident in 2005, compared with 74 percent in 2003), the reported costs remain substantial. The average U.K. company spends 4 to 5 percent of its information technology budget on information security, but two out of five companies spend less than 1 percent on security.


The average cost of a company's worst security incident was about £12,000, up from £10,000 in 2003. Moreover, large businesses are more likely than small businesses to have incidents and to have more of them (the median is 19 per year). A large business's worst breach costs on average £90,000. Overall, the cost of security breaches to U.K. companies has increased by about half since 2003; it is approximately £10 billion per annum. Fewer than half the companies surveyed conduct a security risk assessment, and those that do tend to spend more on security. Table 9-3 summarizes the changes in incidents and cost reflected by the ISBS survey.

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