APAC enterprises and consumers to pay dearly for security breaches

• Highest enterprise losses will be in APAC, at the hands of organised criminals
• Governments worldwide could lose more than US$50bil to deal with malware

ENTERPRISES in Asia Pacific are expected to spend nearly US$230 billion in 2014 to deal with issues caused by malware deliberately loaded onto pirated software, according to a new joint study conducted by IDC and the National University of Singapore (NUS) and commissioned by Microsoft Corp.
 
This figure includes US$59 billion in dealing with security issues and US$170 billion in dealing with data breaches, Microsoft said in a statement.
 
Consumers in Asia Pacific in the meantime are expected to spend US$11 billion this year because of security threats and costly computer fixes stemming from malware on pirated software.
 
In the study, titled The Link Between Pirated Software and Cybersecurity Breaches, 65% of Asia Pacific consumers surveyed say their greatest fear from infected software is the loss of data, files or personal information, followed by unauthorised Internet transactions (48%) and potential identity theft (47%).
 
However, 41% of those same respondents do not install security updates, leaving their computers open to attack by cybercriminals, Microsoft said.
 
According to the survey, Asia Pacific governments are most worried about unauthorised access to confidential government information (57%), the impact of cyberattacks on critical infrastructure (56%), and the loss of business trade secrets or competitive information (55%).
 
It is estimated that governments worldwide could lose more than US$50 billion to deal with the costs associated with malware on pirated software.
 
“The effect of cybercrime is financially devastating for consumers, companies, and governments alike” said Jeff Bullwinkel, associate general counsel and director of Legal and Corporate Affairs, Microsoft Asia Pacific and Japan.
 
The study was released as part of Microsoft’s Play It Safe campaign, a global initiative to create greater awareness of the connection between malware and piracy.
 
“The Play It Safe campaign seeks to educate businesses and consumers to be more aware of the risks associated with pirated software and to take proactive steps to ensure that their PCs and devices come with genuine software,” said Amrita Sapre, Windows Business Group lead for Microsoft Malaysia.
 
“One of the hidden costs of using pirated software is the likelihood of encountering nasty, unwanted code, either in the software itself, via code that can get downloaded or installed along with it, or on PCs with pirated software installed on them. Much of this malware is created by criminal organisations with illegal financial gain, data theft, espionage, or other mayhem in mind,” she added.
 
Amrita also said that with Windows XP support ending soon, Malaysians should consider taking pre-emptive measures to ensure that these risks are avoided.
 
The global study surveyed 1,700 consumers, IT workers, chief information officers, and government officials in Brazil, China, France, Germany, India, Indonesia, Japan, Mexico, Poland, Russia, Singapore, Ukraine, the United Kingdom, and the United States.
 
It also analysed 203 computers acquired in Brazil, China, India, Indonesia, Mexico, Russia, South Korea, Thailand, Turkey, Ukraine, and the United States.
 
This year’s research is an extension of IDC’s 2013 study, The Dangerous World of Counterfeit and Pirated Software, differentiated by the attitude of government officials as well as the analysis of new markets, making the economic connection to cybercrime, Microsoft said.
 
Additional highlights from the survey include the following:

• The world’s highest enterprise losses will come from Asia Pacific (US$138 billion) and will be at the hands of organised criminals.

• In Asia Pacific, 32% of the pirated software in enterprises is installed by employees.

• 29% of Asia Pacific enterprise respondents reported security breaches causing network, computer or website outages occurring every few months or more; 66% of those outages involved malware on end-user computers.

• Infection rates are higher in emerging markets, where more consumers and enterprises acquire software and PCs from suspect sources – small specialty shops, street markets, consultants etc. China and Thailand had the highest rate of PC infections and of infections of software bundled with PCs.

• Only 40% of all PCs are used in Asia Pacific but IDC estimates that the region will account for 47% of the world’s pirated software in 2014.

• Despite lower labour costs to deal with pirated software in Asia Pacific, the region’s higher rate of infection and higher number of pirated software units are responsible for extensive recovery costs.

“Using pirated software is like walking through a field of landmines: You don’t know when you’ll come upon something nasty, but if you do it can be very destructive,” said John Gantz, chief researcher at IDC.
 
“The financial hazards are considerable, and the potential losses could leave once-profitable businesses on shaky ground,” he added.
 
The NUS forensics analysis of 203 new PCs loaded with pirated software found that a staggering 61% of the PCs were pre-infected with unsafe malware, including trojans, worms, viruses, hacktools, rootkits and adware. These PCs, purchased through resellers and PC shops in 11 markets, included more than 100 discrete threats.
 
 “It is hugely concerning that brand new PCs are coming pre-infected with dangerous malware due to pirated software, making the users and companies readily vulnerable to security breaches,” said Associate Professor Biplab Sikdar, Department of Electrical & Computer Engineering, NUS.
 
“The university’s forensic tests clearly indicate how cybercriminals are increasingly leveraging the unsecure supply chain of piracy to spread malware and compromise PC security in a serious way,” he added.
 
More information about the IDC study is available at the Microsoft Play It Safe website.
 
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