If your company suffered a data breach, would you know what to do to comply with state, federal and local law? Start-up Co3 Systems is offering a software-as-a-service (SaaS) application to tackle that unhappy task, tracking how a corporate data-loss incident is handled.
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Data-loss incidents vary from losing laptops with valuable information to inadvertent errors exposing sensitive data to full-blown data breach break-ins or theft of valuable customer information and intellectual property. "Most companies eventually have an incident," says Ted Julian, chief marketing officer at Co3 Systems, based in Cambridge, Mass. "This is about automating what happens after the data-loss incident."
The start-up's data-loss management application is intended to let designated "incident managers" log and track any potential problem, escalate it into an incident if need be, while receiving written legal instruction toward closure of what can be a very expensive process.
The most recent Ponemon Institute study, which asked 51 corporations how much data breach incidents cost them in 2010, found the answer was an average of $7.2 million last year. Only 12% of data breach incidents were ascribed to "malicious or criminal attacks," but these were the most expensive to deal with, costing $318 per customer record, $151 more than non-malicious data breaches stemming from negligence or system failure.
In any case, when an incident of any kind occurs, there's the sense that the clock is ticking, Julian says. In addition to federal laws, over 40 states have their own data-breach laws about how regulators or the corporation's impacted customers have to be notified. "In the state of Maine, for example, it's seven days to notify the customer, and if that fails, fines start to accrue," he notes.
The idea behind Co3's SaaS application is to automate the data-loss management process, creating a record of the incident, with precise links to state attorney general offices, needed forms and the requirements for regulations. The SaaS today is oriented toward U.S. law, but Co3, depending on its success, could expand its focus into international law.
The Co3 SaaS, which keeps all data encrypted, is not intended to be the warehouse for any suspected lost data such as credit-card numbers. The cloud-based Co3 data-breach management application only stores information related to the process of resolving the data breach. "We worked closely with 10 enterprises to build this," Julian says. He says Co3 now has about 30 organizations testing out the SaaS app.
Co3 Systems, which has about 10 employees, was co-founded by Anthony Cirurgiao, its chief strategy officer, and Luca Fabbri, vice president of engineering. The start-up is still in the process of raising venture capital and hasn't released specifics on that yet.
As the repository for information related to data-breach incidents, Co3 Systems itself could become a target of interest to attackers. Julian acknowledges that's a possibility and says Co3 seeks to ensure a high security level both in its own operations and for customer access to the SaaS application.
Over time, Co3 hopes to be able to provide anonymized information about data breaches in a form it can share confidentially with its customers for learning purposes.
The Co3 Systems SaaS is being offered in a promotion of three months free subscription, with the typical fee otherwise set at $450 per month, based on unlimited use for up to one incident on an annual basis. The monthly service fee would go up for multiple incidents.