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Let the games begin. It seems that Radiant Systems, a point of sale terminal company, and Computer World, the company that sold and maintained the Radiant system, are in a bit of a pickle. Seven restaurants are suing them for producing insecure systems that led to security breaches, which led to fines for the breached companies, chargebacks, card replacement costs, and investigative costs. These are real costs, people, none of that silly “lost business and reputation” garbage. The credit card companies forced him to hire a forensic team to investigate the breach, which cost him $19,000. Visa then fined his business $5,000 after the forensic investigators found that the Radiant Aloha system was non-compliant. MasterCard levied a $100,000 fine against his restaurant, but opted to waive the fine, due to the circumstances. Then the chargebacks started arriving. Bond says the thieves racked up $30,000 on 19 card accounts. He had to pay $20,000 and managed to get the remainder dropped. In total, the breach has cost him about $50,000, and he says his fellow plaintiffs have borne similar costs. The breaches seemed to result from two failures – one by Radiant (who makes the system), and one by Computer World (who installed and maintained it). The Radiant system stored magnetic track data unencrypted, a violation of PCI standards. Computer World enabled remote access for the system (the control server on premise) using a default username and password. While I’ve railed against PCI at times, this is an example of how the system can work. By defining a baseline that can be used in civil cases, it really does force the PoS vendors to improve security. This is peripheral to the intent and function of PCI, but beneficial nonetheless. This case also highlights how these issues can affect smaller businesses. If you read the source article, you can feel the anger of the merchants at the system and costs thrust on them by the card companies. Keep in mind, they are already pissed since they have to pay 2-5% on every transaction so you can get your airline miles, fake diamond bracelets, and cheap gift cards. The quote from the vendor is priceless, and if the accusations in the lawsuit are even close to accurate, totally baseless: “What we can say is that Radiant takes data security very seriously and that our products are among the most secure in the industry,” Paul Langenbahn, president of Radiant’s hospitality division, told the Atlanta Journal-Constitution. “We believe the allegations against Radiant are without merit, and we intend to vigorously defend ourselves.” Maybe they can go join a certain ex-governor from Illinois on the next season of The Celebrity Apprentice, since they are reading from the same playbook. There are a few lessons in this situation: The lines have moved, and PCI now affects civil liability and government regulation. PCI compliance, and Internet-based cardholder security, now affect even small merchants, even those without an Internet presence. We have a growing body of direct loss measurements (time to revise my Data Breach Costs model). We are seeing product liability in action… by the courts, not legislation. As with many other breaches, following the most basic security principles could have prevented these. I think this last quote sums up the merchant side perfectly: “Radiant just basically hung us out to dry,” he says. “It’s quite obvious to me that they’re at fault… . When you buy a system for $20,000, you feel like you’re getting a state-of-the-art sytem. Then three to four months after I bought the sytem I’m hacked into.” Share:

I spent about 8 hours on the phone yesterday discussing the Guardium acquisition with press, analysts, security vendors, and former associates in the Database Activity Monitoring space. The breadth of questions was surprising, even from people who work with these products – enough that I thought we should do a quick recap for those who have questions. First, for those of you looking for a really quick overview of Database Activity Monitoring, I just completed an introductory series for Dark Reading on The ABCs of DAM and What DAM Does. Here are some specific questions I have gotten pertaining to the acquisition, in no particular order: What does this mean for the remaining DAM vendors? It means lots of good things. It means that a major firm has placed a big bet on Database Activity Monitoring, spotlighting the technology in a such way that a wider set of customers and competitors will be paying attention to this technology. That means more press coverage. But most importantly it means IBM will now advocate the suitability of DAM for compliance. Additionally, the remaining DAM players will be furiously tuning their marketing materials to show competitive differentiation. What did IBM want to accomplish and how will the software group roll this out? and What does this say about IBM’s security strategy? These are great questions and will require a more in-depth examination of IBM’s security strategy. I will tackle this in a future post. Is this justification for DAM as a compliance platform? Yes it is. IBM provides validation in a way that companies like Fortinet and Netezza simply cannot. DAM has never had a single “must have”, killer application, and may never. But with thousands of Global Services personnel trained on this technology and out educating customers on how it helps with security, operations management, and compliance; I expect a big uptick in acceptance. How does this fit with existing IBM products? Great, poorly, and both. Philosophically, it’s a great fit. IBM has a handful of auditing technologies for every one of their database platforms, and they have the SIM/Log Management platform from the Consul acquisition, so there are some complimentary pieces to DAM. In many ways, DAM can be used as a generic database event collection and analysis engine. It can fit a lot of different purposes from real time security analytics to detailed forensic analysis. On a more practical level this is a poor fit. The Guardium product is not on an IBM stack (Websphere, DB2, Tivoli, etc). IBM really needs a comprehensive vulnerability assessment product to fill in compliance gaps even more than it needed DAM. This is one of the reasons many felt Application Security Inc. would have been a better fit. And despite what was said at the press launch, Guardium is still viewed as a hardware firm, not a software vendor. I am going to get hate mail on these last two points, but I have spoken with enough customers who share this perspective that IBM has more to worry about than my opinions. Does the mainframe database security market needs a facelift? OK, no one really asked this specific question, but was behind several different questions on DB2 security. Mainframe database security is old school: Access controls (ACF2, RACF, Top Secret), small numbers of administrators with SOD, use of tailored audit trails and physical isolation. Encryption to secure backup media is fairly common. While the use cases for mainframes continue to grow as companies look to leverage their investments, the security model has changed very little in the last 10 years. Monitoring provides the capability to verify usage, near-real-time analysis and non-database event collection. These all advance the state of mainframe DB security. Is this an internally-facing deal to serve existing customers or is there a genuine security global strategy? It’s a little of both. I do not believe what was said in the press call: that this is all about heterogenous database security. They have it and they will use it, but the focus will be on existing IBM customers. IBM Global Services will absolutely want support for every database environment they can get because their customers have everything, but the rest of IBM will want mainframe support first and foremost. I know firsthand that there were many in IBM pushing for iSeries-AS/400 support, and a smattering who wanted Informix capabilities as well. I imagine for the time being they will continue with the current support matrix, provide deeper and more seamless mainframe monitoring, and then service the squeakiest of the wheels. I am not exactly sure which that will be, but believe the first efforts are introspective. Does this mean that DAM is mature? DAM products have been reasonably mature for a while now. Once the vendors fixed their gawd-awful UI, had appropriate compliance and security policy bundles, and offered multiple data collection and deployment models, it became a mature product space. Visibility and a must-have use case have been elusive; so DAM has not gained the same kind of traction as DLP, email, and web security. Who is going to be bought next? Probably the most common question I got and, really, I don’t know. You tell me who the interested buyer is and I can tell you who the best fit would be and why. But as [shameless promotion] product and market analysis is how I make my living [/shameless promotion], I am not sharing that information unless you are serious. Share:

We hate that we have to moderate comments, but the spammers are relentless and there’s no way we’ll let those jerks ruin our site. I realized I can disable moderation on a per-account basis without having to give you editing or moderation rights. All you have to do is register with the site, and drop us an email with your username at info@securosis.com. We’ll add you to our super secret group, and you can login and skip all that moderation silliness. A few of you comment on the blog pretty regularly, and we hate that we have to review everything first and slow the discussion down. Hopefully this will help ease the problem. Share:

When there is good news in holiday retail, we usually hear. In this economic climate, it’s headline news. When there is bad news, we don’t hear much. The news from PayPal, according to PC Magazine’s article on Record Breaking Black Friday, was that total transactions were way up – in some cases by 20%. What they are not disclosing is the total dollar volume. In fact, most of the quotes I saw from individual retailers are along the lines of “We did well”, but we don’t know how low their expectations were, and I have yet to see hard sales numbers. Which is annoying because they have the data, so I typically assume the worst. As I was reading the reports I started to wonder what the fraud rates were this year. I am willing to bet the fraud curve would see higher growth than total online sales. If we see a 10-20% uptick in online transactions, did we see a 20-30% increase in fraud? If mobile transactions – the new greenfield for attackers – are up 140%, did we see exploitation of this new medium? It dawned on me that, with all of this commerce tracked and analyzed so closely, most fraud data should be available immediately, and fraud rates should be confirmed within a week or two. If retailers share holiday sales numbers with analysts, why not the fraud data? I know most credit card processing houses and companies like First Data have reasonably sophisticated fraud detection tools, and I am told that PayPal and eBay have incredibly advanced analysis capabilities. I would love to see even a generic breakdown of rates of ecommerce fraud, credit card fraud and fraud rates by location. I don’t need specifics, but trends would be nice – something like the a percentage they were certain was fraud, what percentage was suspect, and what sort of after-the-fact complaints are coming in. It’s a big part of the payment processors’ business, so I know they are watching closely and tracking the activity. Come on, all I want for Christmas is a little forensics! It’s the season of sharing. I know they have the data, but I guess I should not hold my breath in anticipation. Share:

Good job! You paid tens of thousands of dollars for that shiny new name-brand VPN, and then decided to deploy its web VPN functionality because, well, it was just easier than deploying software clients. An underpinning of common web security that dates back to Netscape Navigator 2.0 is the “same origin” policy for JavaScript. Your clientless SSL VPN intentionally breaks this, and that’s considered a feature. What does this mean for you? If your implementation allows dynamic URL rewriting (i.e., end users can put in any URL and have the web VPN fetch it) it’s GAME OVER, since every website a user views through that service appears to come from the same domain – your trusted VPN server. This is worst-case, but there are many other scenarios where an attacker could set up shop to exploit the session, especially if the end user is on a public network where DNS is compromised. There are a bunch of ways to exploit this, especially in multi-step attacks when the bad guy can get on the internal network (easy enough with malware). Don’t be surprised if this shows up in BeEF (a comprehensive tool for exploiting browser vulnerabilities) soon. Friends don’t let friends connect clientless – fix it the right way. Read the US-CERT vulnerability note for more detailed information. You can mitigate many of the potential problems by only authorizing the SSL VPN to manage traffic for trusted domains, and avoid tunneling to random destinations. If it’s a full SSL VPN product with a re-browsing feature, turn that capability off! Oh, not to add to the confusion, but Sun’s JRE is also recently vulnerable to same origin policy violations as well. Share:

Like many of you, for a long time I really couldn’t see the use of those URL shortener service thingies. Sure, when I was designing sites I tried to avoid long, ugly URLs, but I never saw slapping some random characters after a common base URL as being any more useful. I considered my awareness of the existence of these obscure services as an aberration induced by my geek genes, rather than validation of their existence or popularity. Then came Twitter, and the world of URLs was never the same. Twitter firmly swapped URL shorteners out of the occasionally useful into the pretty darn essential column. That magical 140 character limit, combined with the propensity of major sites to use URLs nearly as long as their software user agreements, thrust shorteners in front of millions of new eyeballs. One issue, pointed out by more than a few security pundits and rickrolling victims, is that these shorteners completely obscure the underlying URL. It’s trivial for a malicious attacker to hide a link and redirect a user to any sort of malicious site. It didn’t take long for phishers and drive-by malware attacks to take advantage of the growing popularity of these obfuscation services. Some of the more popular Twitter clients, like Tweetie, added optional URL previews to show users the full link before clicking through to the site. In part, this was enabled by shorteners like bit.ly enabling previews through their APIs. A nice feature, but it’s not one that most users enable, and it isn’t available in most web interfaces or even all standalone Twitter clients. Bit.ly announced today that they are taking things one major step further and will soon be scanning all links, in real time, using multiple security services. Bit.ly will be using a collection of databases and scanning services to check both new and existing links as users access them. Websense’s cloud-based scanner is one of the services (the one that pre-briefed me), and bit.ly will use at least one other commercial service as well as some free/open databases. Update: according to the bit.ly blog, VeriSign and Sophos are the other scanning/database engines. In the case of Websense, bit.ly will tie directly into their content scanning service to check links in real time as they are added to the bit.ly database. Websense uses a mix of real time scans (for things like malware and certain phishing techniques) and their database of known bad sites. The system won’t rely only on the database of previously-detected bad sites, but will also check them at access time. If a link is suspected of being malicious, Websense marks it and bit.ly will redirect users to a warning page instead of directly to the site. Users can still click through, and I’m sure plenty will, but at least those of us with a little common sense are less likely to be exploited. Bit.ly won’t only be scanning new links added to the database, but will be checking existing links in case they’ve become compromised. This also reduces the chances of the bad guys gaming the system by adding a clean version of their site for an initial scan, then sneaking in malware for future visits. I like bit.ly’s approach of checking existing links in case they get compromised, rather than only scanning new links as they are added. This will make it harder for bad guys to game the system. This solution is a lot better than the anti-phishing built into browsers and some search engines, since those rely only on databases of previously-discovered known bad sites. It’s also a two-way system, and although Websense is being paid for the scanning, they gain the additional benefit of now leveraging the results once millions of new (and old) links start flowing through their service. Every bad website Wensense finds when a user submits a link to bit.ly is added to the database used by all their other products. Finally, there’s nothing that says we’re only allowed to use bit.ly for Twitter. The entire Internet now gains a real-time security scanning service… for free. Have a questionable link? Shorten it through bit.ly and it’s scanned by Websense and at least one other commercial service, as well as all the free/open/cheap databases bit.ly uses (sorry, I don’t know what they are). This isn’t to say that any of the individual scans, or all of them together, can identify every malicious link they encounter, but this is a significant advance in web services security. It’s a perfect example of cloud computing enhancing security, rather than creating new risks. Links sent through bit.ly will now be safer than the original links viewed directly. This isn’t live yet, but should be by the end of the year. Share:

Tel Aviv newspaper TheMarker reports that IBM will complete its acquisition of database activity monitoring company Guardium Monday, November 30th. While it is early, and I have yet to confirm the number with anyone at IBM or Guardium, the sale price is being listed at $225 million. This is by far the largest acquisition in the DAM space to date! I had estimated Guardium’s revenue for 2008 at $35-38M, and $38-40M for 2009. If the $225M acquisition price is accurate, at a standard 5x multiple, it would suggest that they were closer to $45M. But my guess is, with an impressive customer list like Citigroup and BofA, the bookings multiple is a little higher than standard. Rumors have been circulating for over a year that large firms have approached Guardium and Imperva about being acquired. These two firms are the unquestioned leaders in database activity monitoring, and for larger technology firms looking to fill gaps in their data security portfolio, these discussions made sense. IBM has been interested in DAM for many years, with multiple divisions playing footsie with different DAM vendors, but most didn’t fit IBM’s business. Guardium is one of the only firms still standing with a mainframe monitoring solution, which is a major prerequisite for much of IBM’s customer base. From the IBM perspective, the functionality makes sense and fits well into some of their existing security products. From an architectural standpoint, integration (as opposed to just sharing data and events) will be a challenge. I do not know which section of IBM will own this product or how it will be sold, but those are certainly questions I will ask when I get the chance. Last year around this time I predicted, based upon the harsh economic climate, that several vendors in this space would be acquired or out of business by now. Tizor was sold for $3.1 million, and as predicted the remnants of IPLocks disappeared. From the rumors I thought Guardium would be next and it was. I was dead wrong, though, in that many security vendors – such as in the SIEM space – were seeing revenue growth despite the miserable economic climate. The impressive $225M figure really surprised me. I had estimated the DAM market at $70-80 million last year, the wide range resulting from the many smaller firms with unknown revenue. For 2009, I estimate revenue has climbed into the $85M range, and that’s with fewer players overall. Where does that leave us? With Guardium & Tizor now sold to IBM & Netezza respectively, and the list of viable competitors having thinned out, I think that Imperva, Sentrigo, AppSec, and Secerno just became a little more valuable. I hate to call it validation, but this is the first time we have seen a big dollar buy. There remain a lot of firms like EMC, McAfee, Oracle, Symantec, and others who would really benefit from gaining DAM technology, so I expect additional acquisitions in the next 6 months. I spoke with some security product vendors who are building their own DAM variants in house, with anticipated launch this coming year. Still others, like Fortinet, launched a DAM product based upon a combination of in house product development in conjunction licensed code. Rich and I still consider DAM more a collection of markets and tools than a single market, but regardless, IBM is betting on the value DAM can provide their customers. I must add a personal note regarding this sale, having competed against the Guardium product and team head to head for four years. In 2004, I thought they had a terrible product. I used to tell them as much, which made me a very popular guy! I also remember a particular ISSA meeting where the Guardium presenter was ridiculed mercilessly by the audience for what was perceived as a failed implementation (honestly, I was not one of the hecklers!), but it showed that at that time security professionals did not believe Guardium’s proxy model would work. But Guardium is the only vendor to have truly focused on their monitoring product and offer significant improvement quarter over quarter, year over year. By 2006 they were consistently beating their competition in head to head evaluations of database activity monitoring. While they started with a product that was barely good enough, I have to applaud their staff for being responsive to market trends, for consistently addressing customer complaints, and for systematically outstripping most of their competition in performance and out-of-the-box functionality. I still think the product is hard to deploy and the appliance based model has scalability and large deployment manageability issues, but hey, no one’s perfect. They have stayed focused better than anyone else in this space, and most importantly, have the most tenacious and omnipresent sales force I have ever seen in a small company. This is a personal ‘Congratulations!’ to the Guardium team on a job well done! You guys deserve it. Share:

I admit it’s not even 2:00 in the afternoon and my mind has already gone on vacation. Apple pies are in the oven, and pumpkin pies are queued up and waiting to go in. We decided to forgo the Friday summary this week because we are pretty sure no one would read it even if we wrote one, so we decided on a pre-Thanksgiving “What are we thankful for in security?” post instead. Rich: “I’m thankful for good, old-fashioned human behavior; especially its propensity to never change. Without it, I’d have to find a real job.” Adrian: “I am thankful most attackers exploit well known defects to penetrate defenses … they are so much harder to detect when they are clever. I am thankful for Mordac, Preventer of Information Services, who has created a face for our industry.” Mortman: “I’m thankful for people who think our capabilities are far better then they actually are and as a result don’t do certain things under the assumption that they’d get caught. Without them, I’d have to work much harder.” Chris: “I am thankful that I can get away with spending so little attention on personal security as a Mac user. I am pretty paranoid, but if I’d spent the same attention on securing Windows systems over the past 10 years, I would have been compromised many times. I’m thankful national breach disclosure laws are on the table.” Have a wonderful Thanksgiving holiday! We’ll be back Monday. Share:

Given how much PR email I get on a daily basis – which does help keep me up to date on what’s happening in the market segments I cover – I seldom miss newsworthy security events. On occasion I totally miss something of interest, like the M86 acquisition of Finjan … three freakin’ weeks ago! For those of you interested in email and web security, big firms don’t offer a lot of interesting tidbits to write about, which makes the smaller firms more fun to watch. In a mature market segment like email and web security, small security businesses need to innovate with technology and sales. To compete with established players like Google and Symantec, where “follow the leader” is a bad business strategy, you need to employ creative thinking in order to survive. This acquisition makes me think M86 has a slightly different vision than their competitors. The Finjan product is an interesting mix of capabilities for web security. Primarily they sold appliances, sitting in the enterprise, acting as gateway servers for content security. Enterprise endpoints are configured to go through the gateway for screening. The product is focused on outbound content, with URL, anti-spyware and basic ‘DLP’ content screening (i.e., regular expression checks). The interesting aspects are the introduction of a proxy model not too long ago, sending remote users through a virtual gateway (in the cloud, of course) that screens and then routes requests. In essence they extend a virtual perimeter around the end point. This is sensible, as most firms will want to secure the endpoint and enforce usage policies regardless if the user is at home, on the road or in the office. Their ‘Vital Cloud’ gives users a pathway to a hybrid appliance/SaaS model, so they can leverage existing hardware while gaining access to additional features not supported by their existing hardware. This is not moving your data to the cloud, but instead offloading the service, which matters if your company worries about security of remote data storage. The remote client and SaaS feature, if I understand the technology correctly, is nothing more than a VPN connection to a virtual server with the client policies. Simple, but it should be effective. You have probably noticed that the M86 team has been aggressive with acquisitions, working to create a complete portfolio of features for web content. The merger between 8e6 and Marshal gave them the web and email security pieces needed to compete on a very basic level; those two features are the minimum requirements for entry. But the Avinti acquisition seemed out of place. Rather than a cloud or SaaS play like their competition, they bought a type of behavior analysis tool. Both a powerful and flexible approach to detecting malware in what I was calling virtual Habitrail, but certainly not a novice tool. It required some skill to use, and was not something to put into the hands of your typical 8e6/Marshal customer. What’s more, neither the deployment model nor functions quite fit market trends. But in light of the the Finjan acquisition (and I am guessing here), it looks as if M86 is trying to carve a niche as a managed service platform. For many SMB’s, content and email security is a problem they want to pay to have solved. It’s not just that they don’t want to worry about which box is the right one, but they cannot afford to hire specialists to understand threats, create policies, manage gateways, perform content analysis, create blacklists, detect malware, and all the rest. Managed service providers care less about the deployment, and more about leverage of effort. The merger of these products and deployment models would appeal to companies like Perot / Fishnet / Solutionary / SecureWorks, and so on. They would be able to deal with the complexities of Avinti and specifics of how to set up DLP. Being able to drop in an appliance and couple it with a virtual server in your data center for both monitoring and policy enforcement would be appropriate. Granted, Finjan gives M86 a hybrid deployment model previously missing (8e6 and Marshal were on-site appliance and software companies, respectively), allowing customers to stave off hardware obsolescence and still accommodate new features and overhead associated with new policies, but I still don’t think that’s where they are headed. They cannot compete head to head on uptime, pricing, SaaS options and scalability with Websense, Cisco and Proofpoint, but they can offer a depth of function that should be potent in the right hands. Share:

There was a tiny blurb in the Sunday Arizona Republic regarding a request by the Arizona Attorney General to Health Net regarding a data breach notification. It seems they delayed telling anyone that data was stolen or missing for six months or so: Attorney General Terry Goddard wants a Connecticut-based insurance company to tell Arizona policyholders whether their personal, medical or financial information was lost or stolen in a security breach six months ago. Goddard’s office says a hard drive containing personal data on 316,000 current and former Health Net policyholders from Arizona has been missing since May from the company’s headquarters in Shelton, Conn. He says the company did not notify the Arizona Department of Insurance until Wednesday. It’s not clear whether this has anything to do with the breach reported back in February, but from the details provided this appears unrelated, as that was a case of inadvertent disclosure. I did a little more digging and it appears a few other states are getting the same letter, as mentioned in this Computerworld post Health Net says 1.5M medical records lost in data breach: Connecticut A.G. calls six-month delay in reporting loss ‘incomprehensible’. A hard drive with seven years’ worth of personal financial and medical information on about 1.5 million customers of Health Net of the Northeast Inc. was reported missing to state officials yesterday – six months after the drive went missing. Excuse me, but what the $%(@ were the details of 1.5 million Health Net customers doing on a portable device? Is there really a major U.S. firm out there without laptop & media encryption mandated? This comes right on the heels of the BofA data compromise I mentioned last Friday, which also does not appear to have been disclosed. And if Health Net’s attorney’s interpreted Arizona’s law the same way I did, it’s not clear they felt compelled to. If you didn’t read Rich’s post on The Anonymization of Losses: A Market Forces Failure , or Bruce Schneier’s post Security in a Reputation Economy, now is a good time. Both are excellent and both discuss the hidden costs of lax security such as this, along with the lack of market forces necessary to avoid stupid @$$ stuff with patient data. It appears that whatever checks and balances are supposed to be in place to prod health organizations into securing personal, financial, and medical data are absent. If there is no penalty, why change? Share: