Benchmarking Cybersecurity ROI
Determining what constitutes good return on investment for cybersecurity spending helps organizations evaluate whether their security budgets deliver appropriate value. Unlike traditional business investments with established ROI benchmarks, cybersecurity presents unique measurement challenges. However, recent comprehensive research provides meaningful benchmarks that security leaders can use to evaluate investment performance and communicate value to stakeholders.
Industry ROI Benchmarks
The 179% Benchmark Study
A comprehensive study by ESI ThoughtLab analyzing over 1,000 firms across multiple industries and countries found that increased investment in cybersecurity generates significant ROI of 179%. This research represents one of the most extensive examinations of cybersecurity investment returns, providing credible baseline expectations for security spending effectiveness.
The 179% figure means that for every dollar invested in cybersecurity, organizations receive $1.79 in value through risk reduction, incident cost avoidance, and related benefits. This substantial return demonstrates that cybersecurity represents sound investment rather than mere cost center.
However, this average masks significant variation across organization types, industry sectors, implementation quality, and threat environments. Organizations should use 179% as reference point rather than target, recognizing that individual results vary considerably.
Middle-Market Organization Returns
For middle-market organizations specifically, preventing just one data breach can yield 200.5% return on cybersecurity investments. This calculation compares average security budgets of $3.4 million against average U.S. breach costs of $10.22 million.
The arithmetic proves compelling: if security spending prevents even one breach during its useful life, the investment delivers remarkable returns. Middle-market organizations often face similar threats as larger enterprises but with fewer resources, making cost-effective security particularly important.
This benchmark underscores that organizations need not prevent multiple breaches annually to justify security spending. Single breach prevention over reasonable timeframes (3-5 years) produces strong positive returns.
High-Performance Security Investments
Certain security investments consistently demonstrate exceptional returns that exceed average benchmarks. Anti-phishing solutions exemplify high-ROI investments, with Return on Security Investment reaching 519%. For every dollar invested in anti-phishing technology and training, organizations avoid $5.19 in losses.
This remarkable return reflects the prevalence of phishing as primary attack vector—over 90% of successful cyberattacks begin with phishing emails. Investments addressing the most common threats naturally deliver superior returns compared to investments addressing less frequent attack vectors.
Other high-performance categories include security awareness training (300-500% ROI), email security gateways (500-800% ROI), incident response capabilities ($1.49-$2.66 million savings per breach), and AI-driven security automation ($2.2 million average savings per breach).
Scenario-Based ROI Examples
Analyzing specific scenarios illustrates how cybersecurity investments generate returns. Consider a company implementing comprehensive security improvements including endpoint protection, email security, network monitoring, and incident response capabilities at total annual cost of $500,000.
Over three years, these investments prevent ransomware attack ($2 million potential cost), business email compromise ($800,000 potential cost), data breach from vulnerability exploitation ($3 million potential cost), and insider threat incident ($500,000 potential cost). Total prevented losses: $6.3 million over three years versus $1.5 million investment.
ROI calculation: ($6.3M – $1.5M) / $1.5M = 320% return. While this scenario involves assumptions about incidents prevented, the mathematics demonstrates how relatively modest security investments generate substantial returns when they successfully prevent major incidents.
Factors Influencing ROI
Industry and Regulatory Environment
Industry sector significantly impacts cybersecurity ROI. Highly regulated industries with sensitive data typically experience higher breach costs, making security investments more valuable. Healthcare organizations face average breach costs of $10.93 million—nearly double the cross-industry average—making healthcare security investments particularly high-ROI when successful.
Financial services, with average breach costs of $5.9 million and intensive regulatory requirements, also sees strong security ROI. Conversely, public sector entities with average breach costs of $2.6 million may calculate lower ROI for equivalent investments, though other factors like constituent trust and mission criticality complicate pure financial analysis.
The regulatory environment influences ROI through compliance benefits. Organizations in heavily regulated sectors gain additional value from security investments that simultaneously address multiple compliance frameworks, essentially getting "free" compliance alongside security benefits.
Organization Size and Complexity
Organization size affects cybersecurity ROI in complex ways. Larger organizations typically have larger security budgets in absolute terms but may achieve greater efficiency through economies of scale. Security tools protecting 10,000 endpoints deliver better per-endpoint ROI than those protecting 100 endpoints.
However, smaller organizations often face proportionally larger impacts from breaches, making security investments relatively more valuable. A breach costing $3 million represents existential threat to $20 million revenue organization but manageable expense for $500 million enterprise.
Organizational complexity—measured by systems, locations, vendors, and data flows—affects ROI by influencing both threat exposure and control effectiveness. More complex environments face greater risks but also experience greater difficulty implementing effective controls, potentially reducing ROI.
Implementation Quality
The same security tool implemented effectively versus poorly can deliver dramatically different ROI. Organizations that properly configure tools, integrate them into workflows, train users comprehensively, tune for their specific environments, and maintain them over time extract far more value than those that simply deploy tools with default settings.
Industry research suggests that poorly implemented security tools operate at 40-60% of potential effectiveness. This implementation gap explains why identical investments produce vastly different returns across organizations. ROI benchmarks assume reasonably competent implementation—organizations with poor implementation practices should expect lower returns.
Threat Landscape
The threat environment facing organizations directly impacts security ROI. Organizations in high-threat sectors (technology, finance, healthcare) or those targeted by advanced persistent threats face elevated breach probabilities, making security investments more valuable through higher Annual Loss Expectancy.
Geographic factors also matter. Organizations in regions with active cybercrime ecosystems or heightened geopolitical risks face different threat profiles than those in relatively lower-risk locations. Threat intelligence helping organizations understand their specific risk environment enables more accurate ROI calculations.
Existing Security Posture
Organizations with weak existing security posture typically achieve higher ROI from initial security investments than those with mature programs. Moving from minimal security to basic protection delivers enormous risk reduction per dollar invested. Moving from strong security to exceptional security delivers smaller marginal improvements.
This dynamic creates the "security paradox"—organizations most needing security investment sometimes calculate lower ROI for advanced tools because they lack foundational capabilities to use them effectively. Organizations should prioritize foundational security investments that enable more sophisticated capabilities later.
ROI by Investment Category
Highest ROI Categories
Email security tools consistently provide highest ROI since email represents 90%+ of attack vectors. Microsoft Defender for Office 365, Proofpoint, and similar solutions show 500-800% ROI by preventing business email compromise, phishing, and malware delivery.
Security awareness training shows 300-500% ROI by reducing human error—the weakest link in cybersecurity. Training costs modest amounts but reduces incident rates substantially when implemented effectively with regular reinforcement.
Incident response capabilities save average $1.76 million per breach for organizations with dedicated IR teams compared to those without. Implementation of incident response plans saves average $2.66 million per breach. Given modest costs for IR planning and team establishment, ROI regularly exceeds 500%.
Strong ROI Categories
Endpoint Detection and Response (EDR) tools reduce successful attacks up to 80% with typical ROI of 300-400%. While more expensive than email security, EDR addresses multiple threat vectors including malware, ransomware, and post-compromise detection.
Multi-factor authentication (MFA) prevents approximately 90% of account compromise attacks at relatively low cost, delivering 200-400% ROI. MFA represents foundational control with excellent cost-effectiveness.
AI and automation in cybersecurity save average $3.58 million per breach compared to organizations not using these technologies. While AI-enabled security tools cost more than traditional alternatives, the substantial breach cost reduction justifies premium pricing.
Moderate ROI Categories
Advanced security capabilities like threat intelligence platforms, security orchestration, automation and response (SOAR), and advanced threat hunting deliver moderate ROI of 50-150%. These capabilities provide value but require sophisticated security programs to use effectively and address less frequent but high-impact threats.
Organizations should pursue moderate-ROI investments after establishing foundational security with high-ROI tools. The progression reflects security maturity—basic protection first, advanced capabilities later.
Budget Benchmarks
Security as Percentage of IT Budget
The average cybersecurity budget as percentage of IT spending increased from 8.6% in 2020 to 10.9% in 2025. This upward trend reflects growing cyber threats and increased organizational recognition of security importance.
Organizations should evaluate whether their security budgets align with industry norms. Those spending significantly below 10.9% might be underinvesting in security, accepting elevated risk, and potentially missing ROI opportunities. Those spending significantly above average should verify that premium spending delivers proportional security improvements.
However, appropriate security spending varies by industry, risk profile, and maturity level. Healthcare and financial services typically spend higher percentages while lower-risk industries spend less.
Optimal Investment Levels
The Gordon-Loeb Model suggests optimal security investment should not exceed 37% of expected loss. This theoretical framework provides upper bounds for security spending—investing more than 37% of potential losses to prevent those losses produces negative returns.
In practice, most organizations invest far below this theoretical maximum, suggesting room for increased security spending with positive ROI. Organizations currently spending 10-15% of potential annual losses on security could likely increase investment cost-effectively.
Cost Per Employee
Some organizations benchmark security spending per employee. Typical ranges vary by organization size and industry but generally fall between $200-$1,000 per employee annually. Technology companies and financial institutions skew toward higher per-employee spending while lower-risk industries spend less.
Per-employee metrics provide useful proxies but should be interpreted carefully. Organizations with many non-IT employees might calculate low per-employee security costs while actually investing appropriately in protecting IT infrastructure and data.
Interpreting ROI Results
What Constitutes "Good" ROI?
Given benchmark data, cybersecurity investments delivering ROI above 150% should be considered good, performing reasonably well. ROI of 200-400% represents very good performance, matching or exceeding industry norms. Returns exceeding 400% indicate exceptional performance, though organizations should verify calculations and ensure they're not overestimating risk reduction or undercounting costs.
However, context matters enormously. A 100% ROI for advanced threat intelligence platform might represent excellent value if the organization faces sophisticated targeted threats, while 200% ROI for basic anti-virus replacement might indicate outdated baseline comparison.
Security investments with negative or very low ROI require careful evaluation. In some cases, poor ROI reflects bad investment decisions and should trigger reconsideration. In others, investments address low-probability but catastrophic risks where expected value calculations produce low ROI but risk management principles justify investment.
Beyond Financial Returns
Organizations should recognize that ROI calculations capture only financial dimensions of security value. Security investments delivering 150% financial ROI might provide additional intangible benefits including brand reputation protection, customer confidence enhancement, competitive differentiation, regulatory resilience, and employee attraction and retention.
Similarly, security investments with modest financial ROI might deserve pursuit for strategic reasons including enabling business initiatives, supporting digital transformation, protecting mission-critical assets, or demonstrating due diligence to stakeholders.
Improving Security ROI
Focus on High-Impact, High-Probability Risks
Maximize security ROI by prioritizing investments addressing both high-impact and relatively high-probability risks. Rare but catastrophic risks might justify investment for risk management reasons, but highest ROI comes from preventing frequently-occurring, high-cost incidents.
Conduct thorough risk assessments identifying top threats facing your organization. Invest first in controls addressing these priority risks before expanding to edge cases and unlikely scenarios.
Optimize Tool Selection and Implementation
Select security tools carefully based on effectiveness data, fit with your environment, integration capabilities, and total cost of ownership. Avoid tool proliferation—more tools don't equal better security and additional tools increase costs while potentially decreasing effectiveness through alert fatigue and complexity.
Implement tools properly with adequate configuration, tuning, integration, training, and ongoing optimization. Poor implementation destroys potential ROI even for excellent tools.
Measure and Improve Continuously
Establish metrics measuring security control effectiveness. Track vulnerability reduction, mean time to detect and respond, successful attack prevention rates, and other meaningful indicators. Use this data to optimize investments over time, shifting resources from lower-performing to higher-performing capabilities.
Regular security program assessments identify opportunities for improvement. Security that looked effective two years ago might be obsolete today, requiring investment updates to maintain ROI.
Leverage Managed Services Strategically
Many organizations achieve better security ROI through managed security services for capabilities difficult to build in-house. Managed detection and response, managed SIEM, and security operations center services provide sophisticated capabilities at lower cost than building internal teams.
However, managed services work best for specific functions—not as wholesale security outsourcing. Maintain strategic control and core capabilities while leveraging managed services for operational scaling.
Common ROI Pitfalls
Overestimating Risk Reduction
Organizations often overestimate how much risk security investments reduce. A new firewall might reduce some risks 90% but others only 30%. Weighted average risk reduction across all threat vectors typically falls below maximum reduction for any single vector.
Use conservative risk reduction estimates in ROI calculations. Vendor marketing claims should be discounted substantially. Real-world effectiveness typically runs 60-80% of claimed maximum effectiveness.
Undercounting Costs
Incomplete cost accounting inflates ROI calculations. Remember to include implementation costs, ongoing operational expenses, staff time requirements, training expenses, opportunity costs, and integration costs. Many security tools require more staff time than organizations anticipate.
Ignoring Interdependencies
Security works as a system. ROI for individual tools should account for how they integrate with other security capabilities. Some tools deliver value only when combined with others, making isolated ROI calculations misleading.
Short-Term Thinking
Cybersecurity ROI calculations should span multi-year horizons matching investment useful life. Single-year ROI might appear poor while three-year ROI proves excellent. Avoid short-termism that leads to underinvestment in security capabilities requiring time to mature.
Conclusion
Good cybersecurity ROI typically ranges from 179% to over 500% depending on specific investments, implementation quality, and organizational context. Industry research consistently demonstrates that well-executed security investments deliver substantial positive returns through breach prevention, compliance efficiency, and operational benefits.
Organizations should evaluate their security investments against these benchmarks while recognizing that individual circumstances vary. Factors including industry sector, organization size, threat environment, and existing security posture significantly influence ROI outcomes.
Rather than focusing solely on maximizing ROI, organizations should balance financial returns with strategic security objectives. Some investments warrant pursuit despite modest financial ROI due to strategic importance, while others delivering exceptional ROI deserve increased investment. The goal is not merely achieving good ROI but building comprehensive security programs that appropriately manage risk while delivering strong value.
Understanding what constitutes good cybersecurity ROI enables security leaders to evaluate investment performance, justify budgets to stakeholders, and optimize security spending for maximum organizational benefit. In an environment where average breach costs exceed $4.88 million and continue rising, investments delivering 200%+ returns deserve serious consideration from any organization seeking to protect assets, reputation, and stakeholders.
