Hackers cost Europe #3bn.

Computer hackers cost European businesses $4.3bn (#3bn) in lost revenue last year, according to new research.

A study of 3,000 businesses worldwide found lapses in security cost companies between 5.7 and 7% of their annual revenue, or six cents for every dollar in sales.

Frank Bernhard, managing principal of Omni Consulting Group which carried out the study, said online security problems are growing faster than anyone could imagine. ‘That whole issue could explode,’ he said, adding that when hackers break into company source code, ‘you’re into billions of dollars that just walked out the door’.

Bernhard believes companies need to consider their intellectual property assets and cited Microsoft’s recent denial-of-service attacks, which crippled most of its major web properties, as an example. ‘The answer is clear: (Microsoft) did not have a corporate policy body looking at security (and) now it does,’ he said.

The UK government has also been affected: a hacker protesting about the dangers of smoking targeted several government sites including the Adult Learning Inspectorate, Training Standards Council and a number of local councils last year.

Bernhard believes that although European companies are less stringent about introducing security policies and more relaxed about intrusion threats, they are beginning to recognise the implications of hack attacks and the need for protection. ‘European organisations are more adapt and inclined to scale up towards security,’ he said.

He stressed that companies need to put security measures in place and implement policies to protect their intellectual properties.

He gave the example of someone walking into an office and stealing a photocopier. ‘How can you miss someone walking out with the equipment and how can you miss someone walking away with your source code?’

The study found that non-IT organisations and manufacturing companies were best at protecting their intellectual properties. ‘The ones that we’d think have the security tools are the weakest link in the puzzle,’ he said.

News of the extent of the problem comes as a US start-up said it would release a software tool next month which it claims can help protect against hacking attempts and traces the attackers back to their IP addresses.

Aimed at small businesses, Sharp Technology’s Hack Tracer II uses database and web router tracking technologies to help determine the locations of potential hackers and reports them to their internet service providers (ISPs).

Alex Smith, assistant manager of technical support at the company, said: ‘Companies using a high-speed network with open connections could be subject to hacking attempts at least ten times a day. This software blocks unsolicited attempts to get into your machines.’

The software, which is compatible with Microsoft NT, Windows 2000 and Windows Me, notifies users when unauthorised individuals are trying to break into their machines. Users can then trace the perpetrators to their IP addresses by viewing an on-screen world map that includes the locations of all the routers on the internet.

Users also have the option of reporting such incidences to Sharp Technology, which can then try to determine if the activities were actual hacking attempts.

– John Geralds and Linda Leung write for vnunet.com.