The Danger of Lateral Movement Explained

Shadowed iron gate

Lateral movement in cybersecurity is a highly undesirable situation, one that can expose your organization to substantial financial risk and reputational harm. 

Custodians of an organization’s financial health, chief financial officers, board members and other non-technical stakeholders need to be as aware of this concept as any cybersecurity specialist.

What is Lateral Movement?

Lateral movement refers to techniques cybercriminals use to progressively move through a network in search of valuable assets after gaining initial access. 

This process is often stealthy and low-key, allowing the attacker to lurk around your environment, gradually escalating their privileges and gaining access to critical data, systems, or information.

Microsegmenting a network; is a tactic for minimizing the amount of damage an attacker can do, after making their way inside. When used in combination with a zero-trust approach, microsegmentation can create an iron-clad layer to serve as the foundation of your cybersecurity program.

Why is Lateral Movement so Undesirable?

Lateral movement signifies an advanced stage in the cybersecurity attack lifecycle, the point where an attacker has already breached the organization’s outer defenses and is now operating freely within the network. 

This situation is akin to having a thief within your walls, stealthily moving room to room, slowly gathering information, planning the grand heist.

Financial Implications

You’re likely aware that the true cost of a cyber breach isn’t just the immediate financial impact. Yes, the cost of incident response, remediation, regulatory penalties, and potential ransoms in a ransomware scenario can be substantial. But the implications run far deeper.

1. Operational Downtime: When systems are compromised, they often need to be taken offline for investigation and remediation. This downtime can halt revenue-generating operations, incurring significant losses.

2. Loss of Intellectual Property: In many industries, IP is the lifeblood of an organization. If an attacker manages to steal or compromise this IP through lateral movement, the damage can be catastrophic.

3. Third-party Liabilities: If your network is connected to partners or clients, the breach could extend to their networks too. This could lead to legal liabilities and damage to crucial business relationships.

Reputational Damage

In addition to direct financial consequences, cyber breaches often result in serious reputational harm. This might be even more damaging in the long run, as trust once lost is difficult to regain. Organizations that have suffered breaches often see a decline in share price, customer trust, and overall market image.

Real-world Examples

  1. Target: The infamous 2013 Target breach is a classic case of lateral movement in a supply chain attack. The attackers initially gained access to Target’s network through an HVAC vendor and then moved laterally, eventually compromising the point-of-sale systems. The breach affected approximately 110 million customers—credit card data of 40 million customers and 70 million customer records were stolen—and cost Target over $200 million.
  2. Sony Pictures: In 2014, Sony Pictures experienced a devastating cyber-attack. The attackers used lateral movement to spread across Sony’s network and stole large amounts of sensitive data, which was later made public. The attacker released four films the studio had not previously released. The attack resulted in a significant operational disruption and damaged the company’s reputation.
  3. Equifax: The 2017 Equifax breach when attackers exploited a vulnerability in a web application, gained access to the network, and then moved laterally to access databases containing personal data of nearly 147 million people. The company’s handling of the breach led to a significant public backlash, and Equifax agreed to a settlement of up to $700 million. 


It’s clear that lateral movement is a serious threat to any organization. The direct financial impact and reputational damage of a successful cyberattack can be devastating. To protect your organization, it is crucial to understand this risk and invest in proactive measures like incorporating microsegmentation into a your robust security program. 

The cost of prevention is typically far less than the cost of a breach. As a CFO, your role in securing these resources and reinforcing a culture of security is pivotal in ensuring your organization’s long-term success.

It’s not that any one solution could have stopped these breaches from happening, but in each of these cases a segmented network would have significantly limited the amount of damage the attacker could have inflicted.

Enclave is our take our approach to microsegmentation. We invite you to explore how it can secure your network today.