The internet is going from strength to strength, so do the hackers and their methods of cyberattacks. In the past, almost 80% of the businesses and government organizations have suffered from cyberattacks. The numbers continue to rise at an alarming rate. While only a small portion of these attacks gets reported, the reality is much more severe.
Judging by the reports, it’s possible to have an impression that only the large conglomerate like Target, JP Morgan, Netflix, or the NHS is vulnerable to cyberattacks. The reality is that every organization – small, medium, or large, are in huge risks of getting attacked by hackers. In fact, the risks are much greater for the small businesses, as they neither have the most advanced security measures, nor the financial might of big companies to recover the losses. According to a study conducted by the National Cyber Security Alliance shows that 60% of the small and midsized companies goes out of business within six months, in the aftermath of a cyberattack.
Therefore, it’s the biggest risk for a modern business that need to be managed with thoughtful preparations. Below, we discuss the unfortunate case of a company called Distribute.IT that went out of business because of a cyberattack.

Background of the Company
In 2002, brothers Carl Woerndle and Alex Woerndle founded their online start-up Distribute.IT. It was a wholesale internet provider with a channel sales strategy. With the help of resellers, the company used to on-sale its internet related services like domain registration, hosting, etc.
In 9 years, the company managed to expand their services into cloud-based web server hosting, SMS services, and SSL certificates distribution. With impressive strategic planning and high-quality services, Distribute.IT managed to claim a 10% stake in the Australian domain selling market by 2011. Everything looked bright and sunny for the business. They already had a portfolio of multiple international domain accreditations, some 30,000 clients, as well as a network of 3,000 online distributors. The company was growing rapidly, with 4% growth a month.
Just when the company was poised to take a big leaf into the global market, with their service offerings expanded to Asia; the devils with a huge plan of destruction arrived at their doorsteps wearing a black veil. The devils were the hackers, who launched a highly malicious, coordinated cyberattack to cripple their servers.

First Phase of Attack and Recovery
It was in the evening on Friday, 3rd June, 2011. Carl Woerndle was sipping on a cup of coffee, probably pondering about the exciting future ahead. Or maybe, he was just planning for the forthcoming weekend.
When he received the call from his CIO, he couldn’t possibly have imagined what was he going to hear. The CIO has called him to inform that a distributor has identified a security breach in their network. It was nothing to panic about. DOS attacks are pretty common for hosting providers, with 2 of their hosted websites being attacked every day. He also knew that his company had a strong cybersecurity measures in place.
However, this particular attack was different. Like a simulated insider testing used for pen testing, the hackers had managed to get behind the firewall and take control of the access information of their master user, entirely bypassing the security protocols.
In the following week, the company went through a nightmare, put in the shifts, and managed to rebuild most parts of its network. By this time, the twitter went crazy with complaints from customers and distributors, the regulatory authorities started sniffing, and Distribute,IT was staring at a long barrel of damaged reputation.
It was still unforeseeable what was about to happen next!

The Second and the Decisive Attack
It was again in the afternoon, Saturday, 11th June, when all of their efforts in the previous week went out of the window. The exhausted technicians, in the middle of their third 72-hour shift, witnessed some crazy behaviors in their servers. It was repeatedly going offline with a couple of seconds interval, with the hackers regaining their access into the network.
This time, the hackers didn’t wait to play out their final plan. They locked out the IT team, and destroyed all four of Distribute.IT servers including the backup. They also targeted the primary trading and hosting systems, including the shared servers and backup systems. By June 13, they managed to switch back their networks again, but without the primary website and the VoIP system. Some 4,000 websites were lost and beyond any chance of recovery. By 14th June, the company started to loose clients.
The company has lost all of its reputation and value built up over the last 9 years. By the end of 20th June, many of their resellers lost their entire livelihood and the company was forced to seek an alternative strategy. They couldn’t afford to continue running their business anymore, and needed to sell out their assets to fellow online service provider Netregistry.

Final Words
The fateful cyberattack that doomed Ditribute.IT was performed by taking advantage of a much vulnerable, yet equally ignored security loophole.
The hacker’s targeted a vulnerable employee, installed a logging malware into his laptop, and managed to create a database of sensitive passwords. Later, they used the password and the company’s VPN protocol in order to gain access to the networks. This was an intelligent move, as it bypassed the entire security protocols and positioned hacker as an insider, with the power to do a mass destruction, which they duly did.
The brothers later recognized that the attack could possibly be prevented with consistent penetration testing and vulnerability assessment. The incident also has put cybersecurity under bright spotlight, prompting years-long discussions about the importance of cybersecurity measures, the importance of a comprehensive approach, as well as the importance of continuous monitoring.