Companies aren't sufficiently protecting their intellectual property in this global economy, suffering $1 trillion in losses last year, new McAfee report says

Dark Reading Staff, Dark Reading

January 30, 2009

3 Min Read

It's the perfect storm: In an interconnected world where companies spread their data around the globe, economic uncertainties and an increasingly sophisticated cybercrime underground are putting intellectual property at risk and companies vulnerable to serious and damaging losses, a new report released by McAfee today says.

The average company has $17 million worth of its intellectual property stored, accessed, and managed outside of its country, according to McAfee's report on protecting this information in an unsecured world. The report came out of research and a survey of more than 1,000 senior IT professionals in the U.S., U.K., Brazil, China, India, Japan, and the Middle East.

The respondents say they lost a combined $4.6 billion worth of intellectual property assets last year, according to McAfee, and spent around $600 million to repair the damages. McAfee says that means companies worldwide lost more than $1 trillion last year as a result.

"...More and more vital digital information, such as intellectual property and sensitive customer data, is being transferred between companies and continents. It also indicates that much of it is being lost in the process," the report says.

Mike Siegel, director of product management at McAfee, says it's tough to quantify the value of intellectual property, too. "McAfee has a number of technology solutions, but you could argue that our EPO [EPolicy Orchestrator] is our most strategic product. What is the source code worth? It's almost invaluable," he says. "A vast majority of companies have no protection whatsoever in place [for their IP]."

The report also found philosophical differences about security investment in different countries. Brazil, China, and India, for instance, spent more on security as a chunk of their IT budgets than the U.S., U.K., Germany, and Japan: Thirty-five percent of Indian firms spent 20 percent or more of their overall IT budgets on security, while 33 percent of Chinese and 27 percent of Brazilian companies did so. IT pros in Germany (20 percent), the U.S. (19 percent), Japan (10 percent), and the U.K. (4 percent) said they spent that much.

And while the U.S., U.K., Germany, Japan, and Dubai are driven mainly by compliance for securing their data, China and India are motivated by competition, the report says: Seventy-four percent of Chinese respondents and 68 percent of Indian respondents say security investments are for a competitive advantage or to attract customers.

The most dangerous places to house or move data, according to the report, are China, Pakistan, and Russia, which the respondents said had the worst reputations for investigating security breaches.

Many of the respondents avoid storing their intellectual property in China due to a perceived risk. While 26 percent of the Chinese respondents said they had avoided storing or processing data in their country for security reasons, 47 percent of them said the U.S. posed the biggest threat to their intellectual property.

"Knowing that the origin of a lot of attacks comes from Russia, China, and Pakistan has been something well-known to me," Siegel says. "But to actually see this through the perspective of people in these countries was interesting. To have a Chinese CIO say this is what I perceive my threats to be [was enlightening]."

More than half of the respondents said the changing nature of cyberthreats is their key challenge.

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