Recovery failure leads to liquidation
A recent report from the industry outlet The Register details the collapse of a company following a ransomware infection. Ransomware is a type of malicious software that encrypts a company's files, making them inaccessible until a fee is paid. In this instance, the business was unable to recover its data or resume normal operations, leading to its closure four months after the initial breach.
The investigation into the collapse revealed that the business owner had intentionally avoided professional IT security services to reduce overheads. Instead, the company relied on an informal arrangement with an individual who lacked the necessary tools and expertise to manage a modern business network. This resulted in a lack of off-site backups and no incident response plan.
The cost of informal IT support
Many small businesses view IT security as an optional expense or a task that can be handled by a hobbyist. However, as this case demonstrates, the cost of a total system failure often exceeds the cost of preventive maintenance. When the ransomware struck, the business found that its backups were either non-existent or had been encrypted alongside the primary data.
Without a clean copy of their records, the company could not invoice clients, pay suppliers, or access customer history. The manual effort required to rebuild these records from paper or memory proved too expensive and time-consuming to sustain the business.
Recommendations for UK businesses
For small and medium businesses in the UK, this serves as a reminder of three basic requirements for survival after a cyber attack. First, backups must be stored in a location that is physically or logically separated from the main network, often called an 'air-gapped' backup. Second, business owners should ensure that their IT support is provided by a reputable company with a service level agreement.
Finally, it is necessary to test recovery procedures at least once a year. Knowing that you have a backup is different from knowing how long it will take to restore that backup to a functional state. In this specific case, the lack of a tested plan turned a technical problem into a terminal business failure.