Telecommunications companies once saw enterprise security measures merely as a cost of doing business- a necessary investment that limited profit. As cyberattacks grow in frequency and sophistication, and as Telcos expand their business into a larger set of enterprise offerings, Telcos see security as a necessary mitigation of financial risk. However, new, innovative approaches are enabling leading Telcos to go a step further – to use security as a revenue and profit driver.
Telcos Are Leaving Money on the Table
For years, good security within telecommunications organizations was at odds with profit margin – each additional safeguard brought additional cost. This conventional approach to security required multiple tools and hardware equipment investment with each new enterprise customer. A tangle of VPNs, encrypted VLANs, perimeter solutions and other physical security infrastructure ensued, creating complexity that has proven difficult and costly to manage. In essence, Telcos who continue to take a conventional approach to enterprise security are leaving money on the table.
Investment in an array of costly point solutions is no longer necessary, due to the emergence of next-generation approaches to security. These methods not only reduce the costs associated with security, but also potentially represent new revenue opportunities for Telco providers. By putting Telcos in the position to confidently deliver higher-value, more differentiated services, a fresh approach to security not only can strengthen protection against security breach, but also can reduce customer churn, facilitate market share growth, and even reduce costs to the customer.
Reducing the Risk and Cost of Breaches
According to the 2013 Verizon Data Breach Investigations Report, there were more than 47,000 reported security incidents and 621 confirmed data breaches in 2012, arising from lost devices, privilege abuse, malware, stolen credentials, backdoor exploits and other threats. Of those intrusions, 92 percent were perpetrated by outsiders, and 76 percent exploited weak or stolen credentials. And perhaps most important, 69 percent were discovered by external parties – most often, the customers of the breached organizations.
In a study of 56 benchmarked organizations, cybercrime created a cost impact averaging $8.5 million annually, according to the October 2012 Cost of Cyber Crime Study from Ponemon Institute. Information theft and business disruption represented the highest external costs followed by internal costs associated with recovery. Data breach in particular, examined as part of Ponemon's 2011 Cost of Data Breach Study, created $5.5 million of loss per organization, of which as much as $3 million came in the form of lost business and abnormal customer turnover.
Those numbers also do not take into account the additional effects of breach on a telecommunication company's reputation and future customer acquisition. But it is clear that methods to reduce the frequency of breaches and the number of customers they affect represent a potential opportunity for telcos.