Security Bytes

Nov 25 2009   12:39PM GMT

Schneier on the hidden cost of poor security

Robert Westervelt Robert Westervelt Profile: Robert Westervelt

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Sales for certain specialized services depend highly on reputation and trust.

Specialized services depend highly on trust and reputation says security guru Bruce Schneier who recently reposted a column he wrote for The Guardian.

Schneier writes about how people should expect specialized IT companies, especially service providers, to have extremely strong security in place – at least a level stronger than their customers. This example can be transferred to a broad spectrum of businesses, Schneier says.

Infrastructures can be spread on a broad continuum, ranging from generic to highly specialized. Power and water are generic; who supplies them doesn’t really matter. Mobile phone services, credit cards, ISPs, and airlines are mostly generic. More specialized infrastructure services are restaurant meals, haircuts, and social networking sites. Highly specialized services include tax preparation for complex businesses; management consulting, legal services, and medical services.

If you are in the bottom half of that list of more specialized and highly specialized services, Schneier believes your risk-based business decisions should take into account your reputation and ability to build and sustain a trust relationship with your customers. That means you better have strong security in place and guard against a data breach.

Another good example of how a company can take on added risk if the service it offers is fairly generic is TJX. The retailer that was the poster child for its massive data breach just a few years ago is now thriving. It could be said that it is somewhat specialized since it’s a discount retailer, but I submit that most retailers are generic in nature. That would be the reason why the retailer’s reputation although initially damaged, easily bounced back despite the poor economy. The massive retailer, with a number of different chain stores, has survived with several profitable quarters.

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