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The True Cost of eCrime

While the global value of the Internet security industry is now estimated at around $20 billion annually, the market continues to grow by over 20% per annum with no sign of slowing down and consolidation continuing among the larger players, such as Symantec, who recently bought storage company, Veritas.



Market research company IDC has estimated that the worldwide information security services market will have a value of $21bn (£14.3bn) this year, reflecting at trend by businesses and individuals to invest in greater Internet security driven by new compliance regulations, which force company directors to properly secure their critical information assets.

Assessing the cost of computer crime on a global basis is a far more difficult exercise for at several reasons; whether credit card fraud should be included, the true cost of unreported viruses and fraud to individuals and small businesses and the scale of costs to larger businesses and financial institutions of which only a fraction, less than 24% in the UK in 2004, (NOP NHTCU survey 2004) are reported to the police.

In the United States, The 2004 E-Crime Watch survey conducted among security and law enforcement executives by CSO magazine in cooperation with the United States Secret Service and the Carnegie Mellon University Software Engineering Institute’s CERT Coordination Center, shows a significant number of organizations reporting an increase in electronic crimes, with respondents reporting that e-crime cost their organizations approximately $666 million in 2003.
A year ago, Microsoft’s- David Finn, director of digital integrity for Europe, the Middle East and Africa, conceded that computer viruses, like Blaster and Sobig-F, could have cost the global economy $13bn in 2003 and in the UK, Parliamentary group, EURIM believes that “While hacking, pornography and other Internet crimes may make headlines, real damage is being done by electronically assisted conventional crime.” It points to one US survey estimated the global cost of e-crime to be about £1Tn annually and Lloyds of London has estimated the global cost of the “I Love You” virus alone to be £10Bn.

While it’s impossible to offer a definitive or even partially accurate picture of the true cost of ecrime it has to be reflected in the $20 billion that is presently being spent on the IT security industry. As a relatively small proportion of users and businesses on a global basis invest in good security and a relatively high number of the same experience virus attacks and even fraud, an estimate of $100 billion to the global economy might be a reasonable guess at the cost of eCrime.

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