Many times, the worst we think that would happen in the result of a data breach is the damage of a company’s reputation and the loss of customer trust. Both of these result in a decline of revenue in addition to the amount it will cost to rectify the data breach. According to Cisco in 2019, breaches increased by 30% due to being unpatched. Additionally, according to IBM’s Cost of a Data Breach, the average cost is nearly $4 million. That is a tremendous amount for a small to medium size company. Therefore, the worst that happens from a data breach isn’t the damage of a company’s reputation and loss of customer trust, it’s the fear of having to close their company.
There have been numerous companies who have shut their door after facing a data breach, such as Code Spaces and MyBizHomepage.
At Code Spaces in June of 2014, there was a distributed denial-of-service attack (DDoS attack) against Code Spaces’ servers. The hacker was able to gain access to the Amazon EC2 control panel and left a message for the company to contact the hacker using a Hotmail email address. Code Spaces was a code hosting company. The DDoS attack erased majority of their company data, backups, and snapshots. Code Spaces left this message on their homepage: “At this point we took action to take control back of our panel by changing passwords, however the intruder had prepared for this and had already created a number of backup logins to the panel and upon seeing us make the attempted recovery of the account he proceeded to randomly delete artifacts from the panel. We finally managed to get our panel access back but not before he had removed all EBS snapshots, S3 buckets, all AMI’s, some EBS instances and several machine instances Code Spaces will not be able to operate beyond this point, the cost of resolving this issue to date and the expected cost of refunding customers who have been left without the service they paid for will put Code Spaces in a irreversible position both financially and in terms of ongoing credibility.”
MyBizHomepage was an online company that monitored financial records. When the site went live in 2008, an investor valued the company at $100 million. The service was free to use, however they gained money through advertising. The Chief Executive Officer (CEO) was Peter Justen and he was approached by Jim Bird, his Chief Technology Officer (CTO), to sell the company. When Justen refused, the CTO went behind the CEO’s back to start a competing company. After Justen found out about this, he fired the CTO and his two helpers who also worked for MyBizHomepage. In 2009, a series of cyberattacks effected MyBizHomepage and the company was forced to take the website offline which resulted in the company shutting down.
Don’t let your company be the victim of a cyberattack. According to Dashlane, although 91% of people are aware that reusing passwords across accounts is not smart, 59% of people still reuse their passwords—even between personal and work accounts. Take all necessary precautions to ensure that your company is protected. Your first line of defense is your company’s passwords. According to Verizon’s 2016 Data Breach Investigation Report, “63% of confirmed breaches involved weak, default or stolen passwords.”