Cyber businessRecent deluge of cyber attacks results in record spending

Published 15 July 2011

The deluge of high profile cyber attacks on major corporations and government entities like the U.S. Senate, the CIA, and Sony has driven a sharp increase in demand for cyber security experts; in the first six months of this year alone, cyber attacks and data breaches have cost U.S. companies approximately $96 billion, nearly the total for 2010; analysts project 2011 to be the busiest year yet with an estimated $75.6 billion in cyber security spending, surpassing last year’s record $63 billion

The deluge of high profile cyber attacks on major corporations and government entities like the U.S. Senate, the CIA, and Sony has driven a sharp increase in demand for cyber security experts.

According to the Ponemon Institute, a research group that specializes in Internet security, in the first six months of this year alone, cyber attacks and data breaches have cost U.S. companies approximately $96 billion, nearly the total for 2010. These costs include spending on security experts and investigations, loss of work caused by a breach, system-software upgrades and the value of stolen intellectual property and funds from bank accounts.

And we’re only aware of the ones that have been discovered,” said Larry Ponemon, the chairman of the institute bearing his name. “That’s the scary thing.”

In another study sponsored by Juniper Networks, researchers found that in the last year 90 percent of businesses had suffered at least one security breach.

In an attempt to protect their networks, businesses have spent more and more on cyber security with annual spending increasing nearly 10 percent each year since 2006. Analysts project 2011 to be the busiest year yet with an estimated $75.6 billion in cyber security spending, surpassing last year’s record $63 billion.

Chris Novak, a manager of Verizon Communications Inc.’s Investigative Response Team, which investigates cyber intrusions for companies across the globe, said, “Every time one of these breaches makes the news, I will tell you, my phone rings off the hook.”

The team has more than doubled in the past year alone and now includes nearly 100 members. Given the latest string of attacks, Novak believes that his team will swell to triple its original size this year. He said the command center, where it monitors hacking activity, “has been extremely busy” of late.

Johnnie Konstantas, a security expert for Juniper Networks, said, “What we’re seeing is not a matter of if,” a company is a victim of a cyber attack, “It’s when will an organization be hit.”

The increasing spending in cyber security and the surge in demand will likely result in higher salaries for security experts as more firms compete for a pool of college graduates that has not increased to meet the new demand.

If companies are going to want to get these students, those salaries are going to go up,” Ron Delfine, the director of career services for the cyber security program at Carnegie Mellon University’s Heinz College in Pittsburgh.

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