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AlertBoot offers a cloud-based full disk encryption and mobile device security service for companies of any size who want a scalable and easy-to-deploy solution. Centrally managed through a web based console, AlertBoot offers mobile device management, mobile antivirus, remote wipe & lock, device auditing, USB drive and hard disk encryption managed services.

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AlertBoot offers a cloud-based full disk encryption and mobile device security service for companies of any size who want a scalable and easy-to-deploy solution. Centrally managed through a web based console, AlertBoot offers mobile device management, mobile antivirus, remote wipe & lock, device auditing, USB drive and hard disk encryption managed services.

Encryption ROI: There Is No Such Thing

I came across an article/interview titled "There is No ROI in Social Media Marketing", and I thought it did an excellent job of highlighting why ROI is the wrong metric for certain situations.  While the article deals with marketing (the interviewee notes that ROI is the wrong metric for any kind of marketing, including social media marketing), the insights also apply for those looking for an "encryption ROI" (return on investment).

What is ROI?

The heart of the interview lies in the question, what is ROI?  Return on investment is simply:

(Gain from investment - Cost of Investment) / Cost of the Investment

That's it.  You can have variations on it, but you can't change the fundamental aspect of ROI that is defined above.  It's like dairy products: you can have them take the form of cheese, butter, cream, yoghurt, etc. but can't deny the fact that they all derive from milk.  The above equations is the just-squeezed and frothy, warm cow's milk of ROI definitions.

So, ROI is anchored on the above definition.  The thing about marketing is that it's not an investment.  Quoting from the article:

The problem for marketing professionals is that marketing activity is not an investment.

An investment is an asset that you purchase and place on your Balance Sheet. Like an office building or a computer system. It’s something you could sell later if you didn’t need it any more.

Marketing is an expense, and goes on the Profit & Loss statement.

Now, this might sound like a cop-out, using technical, accounting jib-jab of what is an asset and what is an expense, etc.  But it's not a cop-out, because ROI is an accounting term.  As an accounting concept, ROI must be applied where it makes sense.  For some reason, people have taken it outside its carefully crafted cage and tried to apply it where it doesn't belong...and that's the problem.  Talk about holding a hammer and viewing the world through a Nail-O-Scope.

What people are really referring to is: well, how much money can I make based on my marketing?  In other words, what is my profit?  What is my revenue?  Since the only reason for marketing is "to get more sales," it only makes sense to ask these such questions.

But what about encryption?

Encryption and ROI

Encryption software and other data protection tools, just like marketing, are not investments. 

I've actually noted this in a previous article I wrote:

Think of it this way: with apple seeds planted in the soil, there is a chance of future returns in the form of an apple tree that will bear many more apples for many years.  However, what kind of return can you get from an outer wall protecting a castle?  The wall doesn't create more walls as time goes by; if anything, the wall will require repair and maintenance, meaning even more resources will be spent over the years once it's up.

Of course, that doesn't meant the wall is "not worth it."  Everybody knows that the wall is definitely worth it.  It's just that you can't realistically calculate an ROI on the thing.

There are many aspects to a business where returns are not generated.  The "No ROI in Marketing" article I quoted makes an example out of email: what's your ROI on email?  It's a trick question, obviously: there is no such thing as an ROI on email.

The other thing that doesn't generate ROI?  Insurance.  The only way to get an "ROI" on that is to get hurt, or to get sued, or something that's usually bad (or unusually bad).  Hell of a way to produce an ROI, if you ask me.

The point is, there are plenty of things a business spends money on today that doesn't generate profits or revenue and yet they cannot not spend money on it.  Encryption software and other data protection tools belong to this category and, hence, they cannot provide an ROI or sales.

People wish it would.  I have heard of people arguing that customers will buy more from companies that have better data protection.  That's not accurate at all.  Data protection is a black box that customers rarely see (or are interested in seeing).  If you're highlighting the benefits of encryption by such an argument, you're setting yourself up to get your security budget cut the next time the company's in disrepair: "hey, you promised us more sales and it's not coming through."  Of course it's not "coming through": encryption is not marketing.

You think of encryption like you think of insurance: you sign up for it because you know you'll need it and pray that nothing goes wrong -- even if "nothing going wrong" means you're "losing" money.


Related Articles and Sites:
http://www.copyblogger.com/social-media-marketing-roi/

 
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About sang_lee

Sang Lee is a Senior Account Manager and Security Analyst with AlertBoot, Inc., the leading provider of managed endpoint security services, based in Las Vegas, NV. Mr. Lee helps with the deployment and ongoing support of the AlertBoot disk encryption managed service. Prior to working at AlertBoot, Mr. Lee served in the South Korean Navy. He holds both a B.S. and an M.S. from Tufts University in Medford, Massachusetts, U.S.A.