Cyber Attack Threat Keeps CEOs Up at Night

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Cyber attacks like the high-profile Operation Aurora incident that targeted Google, Adobe Systems, and two dozen other U.S. companies are becoming the rule rather than the exception, according to a new survey commissioned by McAfee and the Center for Strategic and International Studies.

More than half (54 percent) of 600 IT executives surveyed said their companies had already suffered a large-scale attack or stealthy infiltration from organized crime gangs, terrorists or nation-states, the report said.

The initial estimated cost of downtime associated with a major cyber attack incident is more than $6.3 million a day -- expensive, but only a drop in the bucket compared to the price of losing key intellectual property or having a supply chain or Web site disrupted by strategically placed malware.

McAfee and the CSIS presented their report at the World Economic Forum in Davos, Switzerland, Thursday, hoping to shine an even brighter light on the serious damage hackers and nation-sponsored cyber terrorists could wreak on critical infrastructure such as electrical grids, oil and gas production, telecommunications and transportation networks.

Earlier this week, new revelations of orchestrated cyber attacks against ExxonMobil (NYSE: XOM), ConocoPhillips (NYSE: COP) and Marathon Oil (NYSE: MRO) originating from China brought this issue of national and economic security to the fore in a very real and distressing way.

The oil companies were targeted by unsolicited e-mails looking to extract proprietary information including "bid data" -- the files containing details on the quantity, value and location of oil discoveries around the word. Officials close to the investigation said some of the attacks appeared to have originated in China and that servers located in the country were used to store some of the stolen data.

"In today's economic climate, it is imperative that organizations prepare for the instability that cyber attacks on critical infrastructure can cause," McAfee CEO Dave DeWalt said in the report. "From public transportation to energy to telecommunications, these are the systems we depend on every day. An attack on any of these industries could cause widespread economic disruptions, environmental disasters, loss of property and even loss of life."

The report, titled "In the Crossfire: Critical Infrastructure in the Age of Cyberwar," found that despite increased awareness and legislation at the state and national levels, more than a third of IT executives (37%) said the vulnerability of their sector had increased over the past 12 months.

Forty percent of respondents said they expect a major security incident in their industry within the next year and only 20 percent think their sector is safe from serious cyber attack over the next five years.

DeWalt said that while Operation Aurora was the largest and most sophisticated cyber attack to date, the only good news is that it targeted specific corporations and not the world's most critical information.

"The attack announced by Google and identified by McAfee was the most sophisticated threat seen in years making it a watershed moment in cybersecurity because of the targeted and coordinated nature of the attack," he said.

In its latest cyber attack report, McAfee researchers warned that the number of incidents and network infiltrations that appear to be linked to nation-states and political goals continues to increase.

"With critical infrastructure as likely targets of cyber attacks, and private company ownership of many of the information systems in these sectors, private companies will likely be caught in the crossfire," the report said. "There is active debate as to when a cyber attack reaches the threshold of damage and disruption to warrant being categorized as cyber warfare."

Despite this mounting concern, economic realities are making it harder for IT managers to keep pace with the veracity and creativity of attackers.

Two-thirds of executives surveyed said the current economic climate has caused cutbacks in the security resources available and one in four said resources had been reduced by 15 percent or more, with spending reductions most pronounced in the energy and oil and gas sectors.

Sixty percent said they believed representatives of foreign governments have been involved in past infrastructure infiltrations, with the U.S. (36 percent) and China (33 percent) leading the list of identified suspects.

Larry Barrett is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.