The Sutton effect

One of the enduring questions in cybersecurity is how much failures cost and who pays. Many companies see cybersecurity as a cost with no return; as in housekeeping only the failures are noticeable. Certainly, a data breach, bungled software update, or ransomware attack can ding a company’s share price in the short term – but a year later, often they seem to have fully recovered. Meanwhile, the company’s customers may have spent hours monitoring credit reports, replacing credit cards, and other admin to remediate the effects. Take, for example, Crowdstrike. In July 2024, it rolled out a buggy software update to all its 29,000 clients, many of them large businesses. One of those was Microsoft, which automagically incorporated it into Windows. Result: widespread paralysis. Crowdstrike fixed the error in 79 minutes; it took the rest of the world days to fully recover as each affected machine had to be manually restarted. The company’s shares soon recovered. In November 2024, Matt Kapko…