Data Breaches
February 6th, 2009 by Paul Garmer“People are stunned to hear that one company has data files on 185 million Americans.” – Ralph Nader
Data is the life blood of most companies, and in the computer age protecting it has become equally important. Hardware failures, software failures, and hackers using viruses and data gathering techniques have become a very real danger for the future growth and profitability of many businesses no matter the size or industry.
Cost
The costs of data breaches can be quantified in 3 ways; cost of recovery/productivity, the loss of customer, and direct monetary fees. According to the Poneman Institute the average first time cost of a data breach is around $243 per record. While the cost of repeat incidents lowers to $182 per record, but is still significant. The Poneman Cost of Data Breach report for 2008 says that the average company hit by some sort of data breach spent $1.4 million on unbudgeted recovery, and this was an 8% increase from 2005.
In addition to the direct monetary cost of data recovery, loss of customer and the diminishing of a company’s brand is a significant concern. In 2008 Poneman reports that the average company lost 2% of its customer base, with a range of 0% - 7% depending on industry, directly because of data breaches.
No cost can compare to the loss of customer base or the branding of a company. However, effective Jan. 1st 2009 Texas has placed into action HB3222. This bill dictates that all Texas companies that accept payment cards must comply with PCI Security Standard (DSS) requirements. In addition it allows financial institutions to pursue the company for recovery of any losses and attorney fees associated with that data loss, unless that company passes a PCI DSS audit.
Prevention
With new laws and a tightening economy, no company can afford the cost of a major data breach no matter how big or small. The best solution is to not be reactionary, but instead to take a proactive approach to security and back up procedures. Updating system components, updating/running malware and antivirus programs, and constant offsite removable backups coupled with user education and a front line of support are most small businesses’ best option to maintaining a healthy data network.
No company these days, big or small, can afford the burden of a data breach. Computer based data has become vital to the life of all businesses, but many forget that keeping it safe through preventative maintenance is also vital. Here at Austin Lane Technologies .Inc we have designed a system for preventative maintenance. Through our Network Maintenance Plan (NMP), onsite and over the phone support, as well as other solutions, we can offer a solid set of preventative maintenance options for any company. Please contact Tadd Bednar for more information.