Network Security 101

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					                                                                     NETWORK SECURITY 101
                                                         The Value of a Protected Network
                                                                                                  JUNE 2005

Network Security as Insurance
Every year, companies make significant investments in comprehensive insurance policies to protect assets.
Businesses of all sizes, from large corporations to sole proprietorships, spend billions collectively to guard
against liability and property damage, and to keep employees safe and in good health.

But what about the network infrastructure? What about your network? It’s the nerve center of your company,
through which you communicate with customers, store and maintain data and intellectual property, conduct
sales, manage employees, and engage with strategic partners on a 24/7 basis.

Your computer network is a business-critical entity that needs the same level of protection you would extend to
your physical assets. You need a strong network security system working hand-in-hand with your business
insurance policies to protect you from loss and liability, and keep you in the business of doing business.

Think about it: a catastrophic network security breach can cause as much serious damage as any fire or
burglary-related loss. The primary sources of computer-related crime and financial losses are:


According to the research firm Computer Economics, corporate losses related to viruses rose nearly 40%
worldwide in 2004, reaching over US$17 billion. The LoveBug virus alone accounted for $8.8 billion in
damages that year. 1

    Losses From Viruses Reach 5-Year High Swell, InformationWeek, October 25, 2004

WatchGuard Technologies, Inc.                                                          
Network Abuse

Up to 70% of employees who have high-speed Internet access at work spend as much as 1 hour a day involved
in non-work related activities. At least 6% of employees use the Internet more than 6 hours per week for non-
work related activities. 2 This indiscriminate surfing makes networks vulnerable to hacker attacks,

spyware/adware exposure, trojans, and virus downloads from rogue Web sites.

DoS/DDoS Attack

In a Denial of Service (DoS) attack, targeted systems or networks are rendered unusable, often by monopolizing
system resources. A Distributed Denial of Service (DDoS) involves many computer systems, possibly hundreds,
all sending traffic to a few choice targets. Denial of Service (DoS) and Distributed Denial of Service (DDoS)
attacks were second only to viruses in accounting for corporate financial losses due to computer crime in 2004. 3

Network Intrusion

Over 50% of companies surveyed said they do not report their intrusion incidents because the negative publicity
would damage their image and/or stock price. 4

The Value of IT Infrastructure and Network Security
Infrastructure investments make up a significant amount of spend for the IT departments of many companies.
Most industries allocate between 3-4% of their annual IT budget toward network security.

Dollar value is one thing; business value is another. Knowing the actual business value of your IT infrastructure
as it relates to your business operations and company mission is crucial to understanding the financial
consequences of any network security breach. This knowledge is important information to have, and should be
top of mind, when developing an effective security plan and a realistic security budget.

  Michael G. Conner, Psy.D., The Source, July, 2001
  CSI/FBI Computer Crime and Security Survey, 2004
  CSI/FBI Computer Crime and Security Survey, 2004                                                                                          page 2
To determine the business value of a network security solution, it’s imperative to have your existing network
security implementation audited by a professional to determine what vulnerabilities there are within your
system, how they might be exploited, and what you need to do to protect your business.

An auditor will evaluate:
         Company procedures – are they poor or inadequate?
         Strategic partners – how do they access shared information?
         Vendors – to which systems do they have access?
         Web site – is your Web server protected?
         IT staff – are they under-trained and/or overworked?
         Employees – are they untrained in network security policy, and what are they allowed to do on the
         corporate network?

Looking at the elements of your system that are visible to third parties and considering the types of data and
resources they could lead to if compromised, an auditor will determine the methods an attacker might use to
gain control of your network resources. Servers, modems, routers, and a host of other business-critical
architectural components, in the wrong hands, are an open door to your network and to valued resources. Once
you have this information, you can get a sense of the bottom-line damage an attack or intrusion will cost you.

The auditor will locate and document the flaws in your current security setup and recommend the best way to
systematically address and resolve them, in order of severity. Once you have a plan, you can proactively begin
to protect your interests.

Consequences of a Security Breach

Think of the danger to your company’s network security in terms of threat, vulnerability, and risk:
         Threat - the degree of potential damage
         Vulnerability - how readily the threat can be exploited on your network
         Risk - the likelihood that the vulnerability will be exploited by the threat

When a network attack is executed against your organization, systems and departments across the entire
company are affected. By understanding the scope of the consequences of a security breach, you’ll have a better
idea of the value of your network security “insurance policy.”

Loss of Revenue and Damage to Customer Confidence

If your customers cannot access your Web site, or have their emails to you bounce back undeliverable, the
competition is just a click away – and no doubt more than ready to serve them. With identity theft on the rise at
an alarming rate, your customers’ confidence plummets every time they learn of a network compromise. They
need to know that personal data and other information they entrust to your company will be safe, secure, and
untouched by unauthorized and malicious third parties.

Risk to Proprietary Business Assets

In many industries, a company’s most valuable assets include intangibles. Your intellectual capital and other
proprietary information is vulnerable to theft, unauthorized distribution, or manipulation whenever your
network is breached. The process of replacing or repairing damaged or lost research, archival material, data, and
other business-critical information can be at best expensive or at worst, impossible. Are you willing to take that
risk?                                                                                          page 3
Damage to Business Partnerships

Your strategic partnerships are based upon trust and common objectives, and they are one of your most
important business tools. When your network is breached, your reliability and reputation are called into
question. You’ll lose perceived value as a potential business partner, resulting in lost opportunities.

Potential for Legal Penalties and Litigation

Today, strict regulatory mandates regarding accounting practices, privacy, and other industry-specific issues
have created challenges for executive management and IT administrators alike. Penalties for violation are
significant, and if you are found to be in the wrong, you could be subjected to both civil and criminal
prosecution, with fines ranging into six-figure amounts. If you are found to be in violation due to a network
attack, are you financially prepared to defend yourself, pay fines, and mount a campaign to repair your damaged
reputation with customers, partners, and shareholders?

Increased Overhead and Productivity Losses

Cleaning up after a network attack is a time-intensive, complex process. You must allocate time and resources
toward gathering documentation for the authorities and law enforcement, shutting down your system for
assessment and repair, duplicating victimized hard drives, examining forensics, establishing a timeline of attack
events, locating suspect files, and of course, revisiting your security strategy.

Executing an incident response effort means that some or all of your ongoing projects will have to be delayed –
or abandoned completely – while damage control measures are being taken. This process can take months and
the additional overhead in staff hours can be debilitating.

The Business Case for Strong Network Security

By now, the rationale behind incorporating a strong network security solution into your corporate “insurance”
plan is clear. In today’s digital marketplace, with new and more volatile network threats emerging every week,
it’s protection rather than reaction that will preserve your bottom line. If strong protection is the answer, the
question must then be: what kind?

Integration and Scalability

Successful businesses have learned that the most cost-effective network security solutions are integrated,
expandable systems that enable them to purchase and use fewer appliances over time. Instead of cobbling
together a variety of difficult-to-manage hardware solutions and software services from various sources, they
are opting for single-appliance solutions that include firewall, VPN, multi-layered security, antivirus, intrusion
prevention, spam blocking, Web content filtering, and a centralized monitoring and management function.


In evaluating a security solution, a significant consideration for small-to-medium enterprises is always future
growth. As a company matures, growth and change go along with the territory, and this directly affects network
infrastructure. As business objectives change, or products and services are added, the network grows more
complex to accommodate those changes. The security solution you invested in two years ago may not be able to
keep up with your needs today. If you purchased a static system, your only option may be a “fork lift upgrade,”
sacrificing a significant technology investment and necessitating a new one. By selecting an upgradeable
solution from the outset, or replacing an outdated solution with an upgradeable option, you can easily and
affordably get more performance whenever your needs change.


The ability to add additional security services on an “as-needed” basis can extend the functionality of an
integrated security system long beyond that of a piecemeal solution. Optional security services such as antivirus                                                                                            page 4
for the email gateway, intrusion prevention, spam filtering, and Web content filtering, add value and allow you
to customize your security as your requirements become more complex.

The WatchGuard® Firebox® X Family of Integrated Security Appliances
The Firebox® X family of model-upgradeable integrated security appliances delivers an award-winning
combination of security, performance, ease of use, and value for growing businesses. Firebox X appliances
secure your network using multiple layers of in-depth traffic analysis to catch and remove threats.

Based on a proven firewall and VPN foundation with advanced, integrated security tools, the Firebox X offers
three lines of powerful security appliances to fit the size and needs of your network. As your network grows,
you can easily increase performance and add networking capabilities or additional security services.

Firebox® X Peak™ – The Highest Performance Security Appliance from WatchGuard

Firebox® X Peak™ is the highest-performance line of integrated security appliances from WatchGuard,
offering stronger security out of the box with up to gigabit-per-second firewall throughput. Integrating powerful
security capabilities with advanced networking features, the Firebox X Peak delivers a superior overall solution
that meets the needs of the most demanding network environments.

Firebox® X Core™ – Stronger Security for Growing Businesses

Firebox® X Core™, our flagship line of integrated security appliances, gives you strong protection from the
moment you turn it on. Powerful, yet easy to manage with an intuitive user interface, the Firebox X Core uses
multiple security layers to inspect traffic as it flows into your network to proactively block viruses, worms,
spyware, trojans, and blended threats without relying on signatures.

Firebox® X Edge – Network Security with Superior Firewall and VPN Endpoint Protection

Firebox X Edge is a firewall and VPN endpoint solution for small businesses, remote offices, and
telecommuters. It’s easy to set up and configure with a browser-based user interface and configuration wizards,
and VPN tunnels can be created quickly with WatchGuard System Manager's drag-and-drop VPN tunnel
creation. Firebox X Edge is available in both wired and wireless models.

For more information about WatchGuard Security Solutions, visit us at, or contact your

ADDRESS:                    ABOUT WATCHGUARD
                            Since 1996, WatchGuard Technologies has provided reliable, easy to manage security appliances to
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                            WGCE66276_081807                                                                                                          page 5

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