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Security Budgets Going Up, Thanks To Mega-Breaches

Sixty percent of organizations have increased their security spending by one-third -- but many security managers still don't think that's enough, Ponemon study finds.

Mega-breaches like those at Target and Sony are good for one thing: they help security departments get greater buy-in and bigger budgets from the powers that be. In the wake of the Target breach, 61 percent of organizations increased their security budgets by an average of 34 percent in 2014, according to a study released today, conducted by the Ponemon Institute on behalf of Identity Finder, LLC.

Nevertheless, only 67 percent of respondents said that their organizations gave them sufficient budget to defend against data breaches, even after the Target incident -- which, respondents say upped their upper management's concern about breaches from a 5.7 to a 7.8 on a scale of 1 to 10.

That said, most respondents agreed that they did have adequate tools and personnel to minimize (72%), quickly detect (69%), prevent (65%), and determine the root cause of (55%) data breaches.

Where is the extra money going? The report does not make it clear how much is being invested in new personnel. As for technology spending, the lion's share is going to endpoint security, intrusion detection systems, and security incident and event management (SIEM) systems.

In other words, it's mostly being used on tools that will help detect attacks -- which is important, since 46 percent of survey respondents said they discovered breaches "by accident" and 33 percent said it took them over a year to do so.

Organizations also reported that they'd made operational changes to enhance breach security. Half said they'd begun new security training and awareness activities, and 56 percent established incident response teams.

"Businesses are clearly spending money to prevent cyberattacks, but data breaches still occur. There must be a balance between blocking threats and reducing the footprint of vulnerable, sensitive data," said Todd Feinman, CEO of Identity Finder. "JP Morgan Chase spent over $250 million on cyber security last year, but still suffered from a significant data breach.  The recent Sony cyberattack where millions of instances of Social Security numbers were found within hundreds of files is an unfortunate example of the damage that can occur when an attack gets through and organizations don't properly store and classify sensitive information and don't remove outdated or redundant data completely."

Budgets will probably get another bump this year, now that company executives have Sony, Home Depot, and JP Morgan Chase haunting their dreams. 

To download "2014: Year of the Mega Breach," click here.

Sara Peters is Senior Editor at Dark Reading and formerly the editor-in-chief of Enterprise Efficiency. Prior that she was senior editor for the Computer Security Institute, writing and speaking about virtualization, identity management, cybersecurity law, and a myriad ... View Full Bio

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User Rank: Ninja
1/22/2015 | 11:31:24 AM
Re: Training: The elephant in the room
Case in point could be Target, the breach that keeps on giving. Incident Response certainly failed them; malware was detected early and not acted upon. I wonder how much training their security team had undergone, and if any security exercises were performed. In an organization as large as that, one would think that those exercises are part of their routine.

"Through our investigation, we learned that after these criminals entered our network, a small amount of their activity was logged and surfaced to our team. That activity was evaluated and acted upon." "Based on their interpretation and evaluation of that activity, the team determined that it did not warrant immediate follow up." Those were the words of a Target spokesperson after the breach. I understand that there are literally hundreds of alerts received by their security team daily, but perhaps with better knowledge and training, certain types of alerts could be elevated and acted upon accordingly.
Marilyn Cohodas
Marilyn Cohodas,
User Rank: Strategist
1/22/2015 | 11:17:13 AM
Training: The elephant in the room
It's notworthy that the report is unclear on how much is being invested in training and new personnel. The best technology in the world won't help if the security team doesn't have the expertise to use it effectively.  
User Rank: Ninja
1/22/2015 | 11:02:21 AM
Re: How does one know what the appropriate level of investment should be?
Those are tough questions to answer, and I doubt you will get definitive ones. If you ask the companies that have been breached, they will likely tell you that they did not have the right level of investment in IT security despite having spent many millions of dollars on it, and that they did not have the right success metrics to evaluate the effectiveness of their IT security. The reality is that the level of investment is really a matter of risk assessment and management. You can easily spend more than the value of that which you wish to protect, so the issue becomes a management decision. Metrics too can be a tricky venture. Periodic security assessments are certainly a must. These should include penetration tests, vulnerability assessments, awareness training tests,  and social engineering tests, the results of which must be tabulated and examined over a course of time for effectiveness. In all cases, the results must trend increasingly to the positive. Additionally, I cannot overemphasize the use of an external party to perform these tests in addition to similar ones performed by internal resources. You must get an objective point of view in order to properly assess your security posture.
User Rank: Ninja
1/22/2015 | 10:55:38 AM
Re: How does one know what the appropriate level of investment should be?
That's a fantastic question that does not have a definitive answer. Each solution is unique to each enterprise. You want to spend the right amount of capital towards a cyber security program but you also want to ensure that you are not erecting a $1 million fence around a $1 asset. A security program needs to have the right balance of active personnel and tools that are preventative and reactive. This is also dependent on what data types a company houses and who they do business with. My point here is that there is a variety of factors that will go into each implementation. This decision needs to be made by the powers that be but security needs to be one of the seats at the table to rationalize future endeavors. As you can see from the article, even throughing massive amounts of money at the issue doesn't make you 100% secure.
User Rank: Apprentice
1/21/2015 | 7:20:46 PM
How does one know what the appropriate level of investment should be?
It is good to hear that the average security budget is increasing.  My question relates to how one knows what the right level of investment is?  And also what is the right success metric for security?  
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