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Tallying the true cost of spam

Nov 17, 20036 mins
Enterprise ApplicationsMalwareMessaging Apps

L.A. law firm turns to anti-spam service after $500K sticker shock.

Frank Gillman was frustrated that spam had essentially rendered useless the BlackBerries he deployed to 220 lawyers at the Allen Matkins legal firm in Los Angeles.

But Gillman, the firm’s director of technology, said there was one consolation he took from the experience: It helped open his eyes to the enormous cost of spam – roughly a half-million dollars per year in lost productivity, network storage, wasted bandwidth and end-user support for his company.

The good news is that he’s since reduced that burden by about 80%.

Surveys by research firms that peg the cost of spam at hundreds of dollars per typical U.S. worker, or billions of dollars to the overall economy, fail to adequately convey what Gillman and other network executives are learning from running the numbers on their own organizations. In an effort to personalize that more abstract research data, Gillman agreed to share his firm’s numbers with Network World.

Among the key findings:

• Between the lawyers at Allen Matkins and their support staff of 300, lost productivity shoveling spam was estimated at $300,000.

• Bandwidth consumption accounted for another $17,000.

• Storage costs were pegged at $114,000 more.

When the firm gave the lawyers the BlackBerries in 2000, the reaction was universally positive and appreciative. But it wasn’t long before that giddiness gave way to the realities of spam, which even then represented about 54% of the firm’s messaging traffic, Gillman says.

Many lawyers ditched the devices because the onslaught of spam was so heavy. At the time the devices replicated a user’s in-box instead of providing real-time alerts as they do today.

“We got the same spam twice, once at work and once on the BlackBerry. It was very frustrating,” says Gillman, who spearheads IT for the firm’s six offices throughout California.

That was the human toll. The financial burden was even more depressing – spam had cost more than $1,000 per user per year, he says.

Gillman reduced spam’s cost per user down to roughly $200 per year, in large part by contracting with a spam-filtering service that keeps most junk e-mails from reaching his network or Microsoft Exchange e-mail servers.

“The BlackBerry issue is what made us go get a spam filter,” says Gillman, who outsourced the job to FrontBridge Technologies in early 2001 at a cost of $3,500 per month. “The BlackBerry was an incredible resource and time-management tool, but we found out the true cost of spam is the amount of time you have to waste dealing with it.”

Gillman says user productivity losses, which took into account the number of spams users dealt with factored with an average hourly wage, was more than $300,000 per year before the filter was deployed.

“The loss of productivity wasn’t just in dealing with the spam messages,” Gillman says. He estimates that his end users were spending about 5 seconds handling each spam.

“Our users are really sensitive to viruses and there were concerns that some of these messages could contain viruses, which meant time spent making and fielding user support questions.” Those fears persisted even though the firm runs anti-virus software.

After the spam filter was implemented, the number of spams per user per day dropped from 19 to two, reducing user productivity losses to just less than $28,000 per year, a difference of $272,000.

With roughly 4.5 million e-mails flowing into the company annually, connectivity issues also inflated the cost of spam. Each Allen Matkins office is connected to a T-1 line on a fully meshed ATM network. Mail flows into the main office in Los Angeles and is farmed out to the other five sites.

Gillman figured that with 30% of his bandwidth dedicated to e-mail and 54% of the e-mail traffic being spam that the company was shelling out about $17,000 per year for bandwidth that carried spam.

After contracting with FrontBridge, Gillman says spam traffic dropped nearly 90%, which resulted in spam stealing only $1,600 worth of bandwidth per year.

Connectivity is one of the hardest costs to pinpoint because bandwidth for e-mail traffic is only a portion of the total bandwidth to support the entire network.

“We pay for that bandwidth anyway to support a lot of work that happens on the Web,” Gillman says.

Storage also factored in his spam costs but were equally difficult to determine. The company has two EMC Clariion CX200 storage arrays with 500G-bytes of space and is planning to add three more.

“We don’t have e-mail quotas for our users, so it’s hard to tell how much spam is in our SAN,” Gillman says.

But he figures with an average message size of 10K bytes, a daily spam volume of 1,890K bytes before filtering and an annual storage cost of just more than $10 per user per month that his yearly storage cost was about $114,000. That cost is now down to $2 per user per month because the daily spam volume is only 175K-bytes. This makes his cost to store spam now only $2,100 per year.

Gillman also found that spam was a drain on his support resources. Before the filter, 12% of the user support load was attributable to spam, which resulted in $168 per user per year with a total annual cost of $84,000. The support calls related to spam have now dropped to 4%, with a cost per user of $56 and a total annual cost of $28,000.

He says the bottom line is his spam-related expenditures have dropped by more than $400,000 per year and nearly $800 per user – from $515,000 before filtering to $102,000 or $203 per user per year.

Even though spam still robs his law firm of more than $100,000 per year, Gillman says that is the price of doing business.

“Part of the reason we went to FrontBridge is we run a lean and mean IT staff, which means we are always behind. This spam problem seemed to be the one thing we could outsource effectively.”

Allen Matkins rarely does any maintenance of the filter, and FrontBridge sends users a weekly “spam digest,” an e-mail containing a list of the subject lines from e-mails quarantined by the service. Users only need to click on the subject line in the e-mail to deliver the quarantined message to their in-boxes.

“The fact that users don’t talk about spam is the biggest change,” he says. “I don’t have that [spam] conversation every hour of every day like I use to. … How can you not have an anti-spam tool?” 

Calculating the cost of spam

The law firm of Allen Matkins projects the costs over the next four years of having a spam filter vs. not having one, based on the assumption that spam will increase 35% per year. The numbers below were derived using a calculator developed by Network World columnist Mark Gibbs.
Projections without a spam filter:
2003 2004200520062007
Spam percentage 54%72.9%98.4%99%99%
Total spam costs$515,000$630,000$784,000$988,000$1,258,000
Projections using a spam filter:
  2003 2004 2005 2006 2007
Spam percentage5%6.8%9.1%12.3%16.6%
FrontBridge anti-spam service  $42,000$45,000$48,000$51,000$55,000
Total spam costs$101,700$115,900$134,100$155,300$185,600