The Hidden Cybersecurity Tax
Companies are reportedly paying what industry experts describe as a substantial “cybersecurity tax” that doesn’t appear as a formal line item but manifests through escalating costs across multiple business functions. According to reports, this includes IT infrastructure refresh cycles every three years, per-user licensing fees that increase with each new hire, and insurance premiums climbing 15-25% annually.
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Sources indicate the most significant component remains the $4.4 million average cost of a data breach, with business disruption and post-breach customer support driving the largest financial impacts. The report states that reputational damage alone averages $1.47 million, before accounting for the years required to rebuild customer trust. Major incidents have reportedly cost companies hundreds of millions in damages and regulatory fines, with some exceeding a billion dollars.
The Architectural Shift Gaining Momentum
Analysts suggest 2025 marked a turning point as companies bypassing traditional VPNs with software-defined mesh networks have reportedly figured out how to stop paying this cybersecurity tax. When Cloudflare experienced widespread outages in June, organizations running decentralized architectures reportedly maintained operations because they had eliminated the single points of failure that create the tax initially.
According to Cybersecurity Insiders’ 2025 VPN Exposure Report, 48% of companies still relying on VPNs have already experienced breaches. Meanwhile, alternative infrastructure is gaining significant traction, with platforms like ZeroTier closing 2024 with 5,000 paid accounts and now supporting over 2.5 million connected devices across 230 countries. The company’s double-digit, quarter-over-quarter revenue growth reportedly signals that enterprises are voting with their wallets for this new approach.
Three Ways Legacy VPNs Incur Costs
Operational Overhead: Multiple VPN products often run simultaneously because different departments purchased different solutions, requiring hardware replacement every three years and per-user licenses scaling with headcount. IT teams reportedly spend approximately half their time managing access instead of building product.
Insurance Burden: Companies maintaining legacy VPNs are seeing 15-25% premium increases because actuaries can read breach statistics. The pattern appears clear from incidents affecting Colonial Pipeline, Collins Aerospace, and repeated attacks on Palo Alto Networks equipment by state actors.
Breach Lottery: When cybersecurity incidents occur, they reportedly halt payroll and wire approvals, spike cart abandonment rates, knock out call centers, and trigger SLA penalties, overtime costs, and SEC disclosures. Analysts suggest one weak link—an unpatched gateway or phished credential—can freeze operations entirely.
How Mesh Networks Eliminate The Tax
The companies eliminating this cybersecurity tax are reportedly using software-defined mesh networks that function fundamentally differently than VPNs. Instead of routing all traffic through central gateways, these systems create direct, encrypted peer-to-peer connections between devices.
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ZeroTier’s platform exemplifies this new architecture, where lightweight agents installed on each device provide unique cryptographic identities. Devices then connect directly with end-to-end encryption, while the controller handles authentication without creating data chokepoints.
“With Internet-connected devices outnumbering humans by a factor of three, the need for secure connectivity is skyrocketing,” Andrew Gault, CEO of ZeroTier, stated in the report. “But most enterprises are paying a massive tax to legacy architectures that create more problems than they solve.”
Competitive Advantages Emerging
Organizations adopting these modern security architectures are reportedly gaining significant competitive advantages. They’re not just achieving better security but underpricing competitors who continue carrying the cybersecurity tax burden.
Metropolis, which offers checkout-free parking payments, is reportedly scaling from thousands of devices to 100,000 within two years without purchasing new VPN hardware. Similarly, Forest Rock, a technology company with significant building controls and IoT operations, leverages the platform for highly scalable endpoint management into critical systems.
Insurance underwriters are reportedly responding favorably, offering better rates to companies using zero-trust mesh networks because breach data suggests the attack surface is fundamentally smaller. This trend aligns with broader industry shifts toward modern infrastructure, similar to Scale AI’s strategic restructuring and technology consortium acquisitions reshaping competitive landscapes.
The Strategic Imperative
The question reportedly isn’t whether this architectural shift will happen, but whether companies will transition before competitors use their cost advantage to gain market share, or before a breach forces the issue. As organizations like Rad Intel’s leadership appointments and government migration projects demonstrate, the movement toward modern infrastructure is accelerating across sectors.
With modern attackers consistently finding weakest links and available tools growing more sophisticated, particularly with AI support, the cybersecurity tax continues climbing. Companies eliminating this burden can reportedly reinvest savings into price reductions, product development, or margin improvement—creating sustainable advantages in increasingly competitive markets, similar to strategic shifts seen in technology platform development across the industry.
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