Pay for backups or pay the ransom?
Some new data has come out highlighting a decline in companies paying cybercriminals' ransom demands! This trend is powered by the implementation of more robust backups at businesses across the globe. MSPs like Kosh Solutions are at the forefront of these proactive defensive steps. We wanted to do a quick investigation to see which is more cost effective, paying for professionally deployed and monitored data backups or just paying the ransom.
In a previous article (Why are backups important and how much do they cost?) we broke down the price of backups and even drew up a sample bill for a hypothetical company. We estimated a ballpark figure of about $3,100 per month for professional local, remote, and archive backups.
According to the 2022 report by Coveware, the median price a business had to pay in ransom was $36,360.
$37,200 per year for pro backups
$36,360 in the case of ransomware.
On the surface it may seem that rolling the dice and foregoing the cost of backups is the way to go, but let's go a touch deeper looking at other costs of getting hit with ransomware and see if that holds.
$36K was the median but the average amount paid was $228,125! If your company had to pay the average amount, you could have paid for over 6 years of backups instead (and saved yourself the headaches of having to pay a ransom).
The cost of downtime. According to the report, businesses saw an average of 24 days of downtime!
Reputational costs. These types of costs are much more difficult to calculate but can also be the most costly.
Worry and stress. You may not get hit by cybercrime this year or next, but it is always a threat. With backups and a disaster recovery plan, you have peace of mind. Without those in place you have hope...not a great business plan!
Small to medium business? You are still prime targets!
It was not surprising to see that companies with 11 to 100 employees made up 39.4% of the businesses impacted by ransomware. Furthermore, companies with 1-10 employees accounted for 9.4% of the businesses impacted. So, if your company falls in the range of 1-100 employees you are part of the cohort that made up almost half of all ransomware impacted businesses.
Cybercriminal target this size of company because usually these companies have not invested in cyber defenses and are easier targets.
The good news and the bad
It is fantastic to see fewer businesses paying these ransoms, but it's important to note that just because you didn't pay a ransom doesn't mean other costs are removed. The data was still breached! Backups can save you from having to pay a ransom and are a piece of the puzzle to get a business back up and running quickly, but backups don't protect the company from other liabilities.
Having a professionally designed and maintained technology stack along with continuous staff training all contribute to limiting risk. Speaking of mitigating risk, cyber insurance is a great way to protect your company in the face of cyber threats.
We have a series of articles exploring cyber insurance:
The information contained in this communication is intended for limited use for informational purposes only. It is not considered professional advice, and instead, is general information that may or may not apply to specific situations. Each case is unique and should be evaluated on its own by a professional qualified to provide advice specifically intended to protect your individual situation. Kosh is not liable for improper use of this information.