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The Economics of a Security Breach: Why Prevention Is 10x Cheaper

Average breach cost: $4.45M. Average prevention investment: $400K. The math is simple.

By Richard Ewing·

The Prevention Premium

IBM's 2025 Cost of a Data Breach: $4.45M average. Breakdown: detection ($1.6M), containment ($1.2M), notification ($0.3M), lost business ($1.35M).

Prevention investments that matter: security training ($20K/year, prevents 60% of social engineering), SAST/DAST tools ($50-100K/year, catches 40% of vulnerabilities), penetration testing ($30-100K/year, finds architectural flaws), incident response planning ($25-50K, reduces breach cost by 25%).

Total prevention budget: $150-300K/year. Expected breach cost avoided: $2-3M. ROI: 600-1,900%.

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Published Work

This article expands on ideas from my published work in CIO.com, Built In, Mind the Product, and HackerNoon. View published articles →

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Richard Ewing

The Product Economist — Quantifying engineering economics for technology leaders, PE firms, and boards.