Service Providers of the Information Society – Companies Bank on External Advice and Outsourcing to Tackle IT Security Issues

Malware (malicious software) originating from the internet such as viruses, worms and Trojans disturb a company’s data storage and the correct functioning of the IT systems. A large majority of service providers are aware of these internet-based risks. That is why, 75 per cent of them bank on external advice in terms of IT security issues. About 33 per cent partially or completely outsourced their IT administration to external service providers. Only 20 per cent of the companies handle administration and IT security issues on their own.

These are the findings of an economic survey conducted by the Centre for European Economic Research (ZEW), Mannheim, in collaboration with Creditreform, Neuss. The study was carried out among approximately 1,000 service providers of the information society in March 2006. The economic sector of information society service providers consists of information and communications technology (ICT) service providers (software service providers, ICT specialised trade, IT and telecommunications services) and knowledge-intensive service providers (firms active in tax consulting and auditing, management consulting, architecture, technical consulting and planning, research and development as well as advertising).

In all questioned sectors, the share of companies relying on external advice regarding IT security issues accounts for more than 60 per cent. In the branches tax consulting and auditing, technical consulting and planning, telecommunications services and advertising, more than 90 per cent of the companies seek external advice. The lowest share was recorded among the software service providers. Their business activities comprise, among other things, the marketing of know-how in the field of IT administration.

IT administration is most frequently outsourced in the branches tax consulting and auditing, technical consulting and planning as well as management consulting. About 80 per cent of the tax consultants, auditors, technical consultants and planners partially or fully subcontracted their IT administration to external providers. The corresponding share among management consultants lies at about 50 per cent.

In the first quarter of 2006, approximately 60 per cent of the IT-related service providers stated that their IT systems had been, at least once, infected by malware. Nearly all companies in the telecommunications branch have experienced viruses, Trojans or worms – particularly until 2003. Between 2004 and 2005, software service providers were a major target of malware. About 65 per cent of the companies in this branch claim to have had a virus at least once in this period of time. The adverting branch was also severely affected. In almost 60 per cent of the advertising agencies, viruses caused damage at least once between 2004 and 2005. Tax consultancies and auditing companies are the least frequently affected by malware. 80 per cent of the companies in this branch have never been infected by malware. It also rarely affects the branches technical consulting and planning as well as management consulting.

Malware originating from the internet such as viruses, worms and Trojans may cause a loss of data or damage the operating system to such a great extent that it has to be reinstalled. Over the last years, more software has been developed to spy on confidential data or remotely manipulate the infected computer. Almost all companies use anti-virus software that keeps the arising problems to a minimum. However, these programmes do not guarantee a one hundred percent protection from malware.

Note on statistical projections

To ensure the analyses’ representativity, the ZEW projects the answers of the survey participants with the turnover value of the businesses with regard to the entire economic sector service providers of the information society. The phrasing "share of the businesses" therewith reflects the share of turnovers of the businesses.

Ansprechpartner

Dr. Margit Vanberg, E-Mail: vanberg@zew.de