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Tuesday, February 04, 2003

The Productivity Connundrum

No, this piece is not about what happened to productivity after the 1970's, nor is it about computers and the Solow effect. It's far more mundane than that. How do you put a value on a computer virus? This comes up in connection with the recent slammer (saphire) worm, many estimates put the clean up figure in the 1 billion dollar bracket, but there is no real consensus, nor, it seems, do we have an agreed metric. About one point, however there is agreement, it was damn quick. According to a recent study, it was the fastest-spreading worm the Internet has yet seen. In the first minute of its release, Slammer's rate of infection doubled every 8.5 seconds and it reached its full speed in just three minutes. The result was that it had infected the majority of the 75,000 servers it eventually compromised within only 10 minutes. The small size of the worm - a tenth as large as 2001's Code Red -was, apparently, one reason it propagated so quickly.

On Thursday, London-based market intelligence firm Mi2g said that the worm caused between $950 million and $1.2 billion in lost productivity in its first five days worldwide. That puts the worm at No. 9 on the company's list of the most costly malicious code, behind the likes of the Code Red worm, with its average of $2.6 billion in productivity loss; the LoveLetter virus, with $8.8 billion; and the Klez virus, with $9.0 billion. The estimates are the first to try and measure the effects of the latest worm to hit systems. The SQL Slammer worm spread throughout the Internet late on Jan. 24, and the sheer quantity of data produced by infected servers clogged the electronic arteries of company networks, downed banks networks and ATMs and slowed some people's access to the Internet.

Many security experts argue, however, that while SQL Slammer is easier to clean up, the worm was worse overall than Code Red--which attacked more servers but didn't affect infrastructure, such as financial systems. "This worm did something that we have not seen before," said Peter Allor, director of operations for the Information Technology Information Sharing and Analysis Center (IT-ISAC). "In this case, the customer was affected," he said. "People weren't getting dial tones; airplanes couldn't fly; (and) ATMs weren't giving cash." Data on computer viruses has always been lean. Putting a dollar figure on the losses incurred by malicious code is difficult at best, said Michael Gartenberg, research director for Internet industry watcher Jupiter Research. "It is a billion soft dollars, and that is an important part of an equation," he said, stressing that the losses weren't actually coming out of companies' wallets. "Measuring productivity and translating it into dollars is a hard thing." In the past, analysts have tried to bill a variety of events to lost productivity. Last May, outplacement service Challenger Gray and Christmas estimated that the first day of "Star Wars: Episode II--Attack of the Clones" would cost firms $319 million in lost productivity from workers calling in sick and taking days off. In addition, Internet monitoring software maker Websense estimated in May 2000 that a Webcast by underwear retailer Victoria Secret would cost businesses $120 million in lost productivity. Mi2g's Matai said there is a big difference between those numbers and the losses incurred by malicious code. "I don't think we are looking at productivity loss like that at all," he said. "We are looking at how many servers went down, what was the utilization of those servers and what kind of traffic didn't get through," he said. "The administrators could do nothing until they sorted all that mess out. So it is a different measure of productivity loss."
Source: ZD Net

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