A new cyber security data breach but the fallout of this one will be well worth watching. That's because it's been targeted at Sage (SGE), the global accounting and payroll software supplier to SMEs. Run by the highly respected former government tech Czar Stephen Kelly (pictured), you could barely ask for a more experienced pair of hands to manage this unfortunate, yet all too common, situation.

aaaStephen Kelly, CEO Sage 3

Sage hasn't put anything out on the stock market news wire today but the IT database infiltration is widely reported in the national press, the company apparently alerting the City of London police about a security breach over the weekend.

According to reports, personal details and bank account information of the employees at up to 300 UK companies may have been compromised, although we do not not much more detail than that.


'We are investigating unauthorised access to customer information using an internal login,' Sage has apparently told its clients.

Tech-savvy investors are well aware of the threat posed by cyber criminals and attackers (read our indepth feature here). Breaches of IT security happen frequently across the UK business space and public sector, the big challenge is how you deal with an attack.

'Sage will be judged on how well and how quickly it responds to the breach and management needs to be open in communicating progress and impact,' says TechMarketViews analyst Angela Eager today.

We certainly have a pretty text example of how NOT to respond.

'This is something TalkTalk (TALK) found out the hard way when it had a major breach,' reminds Eager. The broadband and calls business ended up losing around 100,000 customers when it failed to effectively deal with its own data breach in October last year. The fallout also cost TalkTalk around £60 million in extra costs, and it is still dealing with the reputational damage.

That Sage shares are down just 1.5% today at 728.5p - just a fraction off 15-year highs – says a lot about the market's relative confidence that Kelly has things under control.

Cover mgmt change SAGE

Issue Date: 15 Aug 2016