Businesses are getting better at defending themselves against viruses and worms, suggests a recent report by analyst group Computer Economics, with the cost of dealing with such malware dropping substantially in 2005.

The amount that organisations around the world spent on protecting themselves against the effects of malicious code fell from $17.5 billion in 2004 to $14.2 billion in 2005. This is the first time since 2002 that the financial impact of malware has decreased.

The authors of “The 2005 Malware Report” – based on data from 150 global organizations – say that the positive trend results from the facts companies had tightened network security and there have been major improvements in malware protection software.

But the nature of malware is evolving, the report concludes, to become more focused on individual organisations and more specifically designed to steal funds, rather than just on causing the most widespread damage. This means that the economic impact of malicious code is concentrated on a few companies in sectors that attract attacks such as online betting organisations.

The report also found that the most expensive element of dealing with malicious code in 2005 was the labour involved in analysing, repairing and cleansing systems. In 2004, the biggest cost related directly to revenue lost as a result of attacks.

The authors also acknowledge that costs related to malware may be underestimated, with some businesses keen to downplay losses.