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Ipremier Case

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Introduction The iPremier Company was founded in 1996 by two students at Swarthmore College and grew to become the second largest web-based retail business selling luxury, rare, and vintage goods. The company's customer base was high-end, with most of the products priced between fifty and a few hundred dollars and a small number of items priced in the thousands of dollars. Its return policy was flexible, which gave customers the opportunity to examine products before deciding whether to keep them. The company went public in 1998, and its stock price experienced rapid growth throughout 1998 and 1999. The stock price was hit hard during the DotCom Crash of 2000, but, unlike many of its competitors in the business-to-consumer segment, the company was able to survive by streamlining and focusing its business to achieve profitability. In January 2007, iPremier experienced a denial of service ("DoS") attack, which prevented access to the website and the internal web server. It was unclear at the time whether this was a DoS attack, or something deliberate. Though the attack appeared to be harmless in the end, the incident brought to light the fact that iPremier was ill-equipped to deal with breaches of network security. The incident highlighted three major shortcomings of the company's existing network security infrastructure: (1) a third party was responsible for the company's internal network security, (2) iPremier's information technology was outdated, and (3) iPremier's standards and procedures for dealing with security issues were out-of-date and poorly defined. Information security is necessary for protecting valuable information. Inadequate security could lead to a loss in confidence from shareholders and from customers all impacting future profits. Companies that collect financial information have a higher incentive to protect this information because of

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