What Does a Security Breach Cost?

Someone finally assigned a dollar value for security breach that we can relate to. Not in millions or billions or gazillions, but in three figures - $204 per lost record. This is according to a recent report by the Poneman Institute. At 66%, loss of business is the biggest cost. Customers lose trust. Then there's the cost of spin to control bad publicity.

What can companies do to minimize costs? It helps to put a chief information security officer at the helm. It also helps to keep up to date on the most advanced firewalls and penetration software. There will always be someone who thinks he's a better hacker. Oh, and for those who like figures in the millions, the average cost to an organization is $3.43 million. The figure of $204 per record is for the U.S. because of notification laws, but the sum varies among nations. Read the Ponemon Institute's "2009 Annual Study: Cost of a Data Breach" http://www.encryptionreports.com/.

Visa's M-Bet

Visa, meet CyberSource. More than 40% of online payments are done through Visa, and e-commerce is getting old. Cell phone companies are pushing smart phones because they can increase their revenues as we become increasingly tethered not only to our cells phones, but to our computers.

CyberSource, Visa needs you. At $2 billion, this is the largest amount of money Visa ever paid for anything. But, hey, Visa needs to compete with PayPal. As much as people complain about the fees, they know they're stuck with it if they want to buy something on eBay. M-commerce is not going away and CyberSource may even be able to serve those who refuse to embrace BlackBerry devices and iPhones.

Now it comes down to data protection. There will be be a new level of penetration tests those of us in IT security need to learn. I hope Visa doesn't skimp on this. Otherwise, they will be in the same embarrassing -- and costlier -- position as other financial institutions that decided to gamble on security. They ended up paying for "free" credit monitoring. It wasn't free for them.

Read more at: http://www.nytimes.com/2010/04/22/business/22visa.html

Toast

Yesterday's article in The New York Times about concern over nuclear arms in Asia is long overdue. This is something that I have been concerned about for years. Any American company that has a data center in India could be toast. This risk is bigger than the ones many financial institutions have taken by not allocating money for better security domestically. How many times have you heard that a particular company will offer its customers free credit monitoring for a year because their data has been compromised. That's nothing compared to the potential physical meltdown of a company's data center. As an investor, I worry about that.

There are backups, but that may be too little too late in this scenario. It wasn't just jobs that have been outsourced to India; it's security. It's a company's lifeline. Whatever money the company has saved by not upgrading firewalls and penetration software and by hiring cheaper labor overseas and temporary workers domestically can be gone in one explosion. Not a pretty picture and that's without even thinking about the consequences to the land and to people's health.

iAm Not Surprised

The initial excitement over the iPad is beginning to settle down. Apple is, without a doubt, the most innovative company when it comes to visual design, applications and marketing. A few people will admit to buying Macs because of their seductive designs, but the majority justify buying the overpriced hardware because they think that Macs are flawless, never crash and never get viruses. Those are myths, something my wife, who has worked on one for years at a newspaper, can attest to that. My main complaints against Apples are the pricing, which I think is exorbitant in comparison to PCs which are equally good for graphics and the fact that PC desktops are expandable.

But I digress. The point of this blog is to address the first issue that has come up with the much-hyped iPad. There's a problem with the WiFi connection. You would think that the company did better testing, but at least it can be fixed. That said, I'd be livid if I spent all that money and it didn't work. One of my pet peeves is when sales people don't know enough about a product, you buy it and then have to return it because no one mentioned that the product doesn't work with your standard software.

I am a very cautious consumer. I've always embraced new technology, but at arms length at least until the second generation came out to remove the bugs from the first one.