Valuing Security and Prioritizing Your Expenditures

I often blog on various market trends related to information security and try to provide an in-depth coverage of emerging or current trends -- in between active comments. In previous posts "FBI's 2005 Computer Crime Survey - what's to consider?", "Spotting valuable investments in the information security market", "Why we cannot measure the real cost of cybercrime?", "Personal Data Security Breaches - 2000/2005" and, "To report, or not to report?" I emphasized on the following key points in respect to data security breaches and security investments :



- on the majority of occasions companies are taking an outdated approach towards security, that is still living in the perimeter based security solutions world


- companies and data brokers/aggregators are often reluctant to report security breaches even
when they have the legal obligation to due to the fact that, either the breach still hasn't been detected, or the lack of awareness on what is a breach worth reporting


- the flawed approaches towards quantifyingthe costs related to Cybercrime are resulting in overhyped statements in direct contradiction with security spending


- companies still believe in the myth that spending more on security, means better security, but that's not always the case


- given the flood of marketing and the never ending "media echo" effect, decision makers often find themselves living with current trends, not with the emerging ones, which is what they should pay attention to



It is often mistaken that the more you spend on security, the higher level of security would be achieved, whereas that's not always the case -- it's about prioritizing and finding the most suitable metrics model for your investment.



Here's an article describing exactly the same impression :



"Security breaches from computer viruses, spyware, hacker attacks and equipment theft are costing British business billions of pounds a year, according to a survey released Tuesday. The estimated loss of $18 billion (10 billion pounds) is 50 percent higher than the level calculated two years ago, according to the survey that consultancy PricewaterhouseCoopers conducted for the U.K. Department of Trade and Industry. The rise comes despite the fact that companies are increasing their spending on information security controls to an average 4 percent or 5 percent of their IT budget, compared with 3 percent in 2004."



That's pretty much the situation everywhere, companies are striving to apply metrics to security investments and this is where it all gets blur. Spending more on security might seems to be logical answer, but start from the fact that open networks, thus exposed to a great deal of uncontrollable external factors, undermine the majority of models so far. Bargaining with security, or "Getting paid for getting hacked" remains a daily practice whatsoever. Let's consider various social aspects concerning the participants.



A financial executive often wants to know more on :

- Do I get any return on my investment (ROI) ?
- What % of the risk is mitigated and what are your benchmarking methods?
- What may I lose if I don't invest, and where's the sweet spot?
- How much is enough?
- How do I use basic financial concepts such as diversification in the security world?
- How would productivity be influenced due to the lack of solutions, or even their actual use?



A security consultant on the other hand might be interested in -- How do I convince senior management in the benefits of having a honeyfarm in respect to mitigating the overall risk of having real systems breached into, without using Cyberterrorism as the basis of discussion?



These different school's of though, positions, responsibilities and budget-allocation hungry individuals are constantly having trouble communicating with each other. And while you cannot, and perhaps even should not try to educate your security workforce in to the basics of finance, an understanding of both side's point of view may change things -- what you don't see value in, is often someone else's treasure.



Another recent article on the topic of justifying security expenditure, or mostly assigning value made me an impression :



"So we came up with Value Protection," Larson says. "You spend time and capital on security so that you don't allow the erosion of existing growth or prevent new growth from taking root. The number-one challenge for us is not the ability to deploy the next, greatest technology. That's there. What we need to do now is quantify the value to the business of deploying those technologies." "It adds value; we're very supportive of it," says Steve Schmitt, American Water's vice president of operations, of Larson's Value Protection metric. For a while, people were just trying to create reasonable security, Schmitt says, "but now you need something more—something that proves the value, and that's what Bruce developed. Plus, as a secondary benefit, it's getting us better visibility from business owners and partners on risks and better ways to mitigate the risks."



Good point on first estimating the usefulness of current technologies, before applying the "latest", or "newest" ones. The rest comes to the good old flaws in the ROSI model, how would you be sure that it would be the $75,000 virus outbreak that will hit your organization, and not the $5000 one? "Return On Security Investment (ROSI) – A Practical Quantitative Model" emphasized on the challenges to blindly assigning the wrong value to a variable :



"The virus scanner appears to be worth the investment, but only because we’re assuming that the cost of a disaster is $25,000, that the scanner will catch 75% of the viruses and that the cost of the scanner is truly $25,000. In reality, none of these numbers are likely to be very accurate. What if three of the four viruses cost $5,000 in damages but one costs $85,000? The average cost is still $25,000. Which one of those four viruses is going to get past the scanner? If it’s a $5,000 one, the ROSI increases to nearly 300% – but if it’s the expensive one, the ROSI becomes negative!"



Among the first things to keep in mind while developing a risk management plan, is to identify the assets, identify the potential attackers, and find ways to measure the threat exposure and current threatscape as well. In a publication I wrote three years ago, "Building and Implementing a Successful Information Security Policy", that as a matter of fact I still find a quality and in-depth reading on the topic, I outlined some ideas on achieving the full effect of the abovementioned practices -- it's also nice to came across it given in assignments and discussed in lectures too. An excerpt on Risk Analysis :

"
As in any other sensitive procedure, Risk Analysis and Risk Management play an essential role in the proper functionality of the process. Risk Analysis is the process of identifying the critical information assets of the company and their use and functionality -- an important (key) process that needs to be taken very seriously. Essentially, it is the very process of defining exactly WHAT you are trying to protect, from WHOM you are trying to protect it and most importantly, HOW you are going to protect it."



Identifying the threats and some current threats worth keeping in mind
- windows of opportunities/0day attacks
- lousy assets/vulnerability/patch management
- insecure end users' habits
- sneaky and sophisticated malicious software
- wireless/bluetooth information leakage
- removable media information leakage



How would you go for measuring the risk exposure and risk mitigated factor?



Risk exposure and risk mitigated are both interesting and hard to quantify, should we consider the whole population given we somehow manage to obtain fresh information on the current threats ( through the use of Early Warning System such as Symantec's DeepSight Analyzer, The Internet Storm Center, or iDefense's Intelligence services for instance). Today, it is often based on :



- the number of workstations and network assets divided by the historical occurrence of a particular security event on the network -- the use of mobile agents for the specifics of a company's infrastructure effects is hard sometimes


- on the historical TCO data related to typical breaches/security events



Risk mitigated is often tackled by the use of Best practices -- whether outdated or relevant is something else, Cyber Insurance and the current, sort of, scientifically justified ROSI model are everyday's practice, but knowing the inner workings of your organization and today's constantly changing threatscape and how it(if) affects you is a key practice while prioritizing expenditure. You cannot, and should not deal with all the insecurities facing your organization, instead consider prioritizing your security expenditure, not just following the daily headlines and vendor-released, short-term centered research.



It's hard to quantify intellectual property's value, the way it's hard to quantify TCO loses due to security breaches and it's perhaps the perfect moment to mention the initiative that I undertook in the beginning of this year - a 50/50 security/financial cross-functional team on coming up with a disruptive idea -- more on the current status soon, still, thanks for the time and efforts folks! To sum up, a nice quote by the authors of the research I mentioned : "Most of the problems stem from the fact that security doesn’t directly create anything tangible – rather it prevents loss. A loss that’s prevented is a loss that you probably won’t know about."



At the bottom line, are you making money out of having security, that is thinking business continuity, not contingency planning, and should we keep on trying to adapt financial concepts, and not rethinking them all?



Recommended reading/resources on the topic of justifying security expenditure :
Return on Information Security Investment
Risk - A Financial Overview
Calculated Risk - Guide to determining security ROI
The Return on Investment for Network Security
Analysis of Return on Investment for Information Security
Methodologies for Evaluating Information Security Investments
Risk Assessment for Security Economcis - very informative slides
Economics and Security Resource page
Information Security in the Extended Enterprise: Some Initial Results From a Field Study of an Industrial Firm
PKI and Financial Return on Investment
Privacy Breach Impact Calculator
Guide to Selecting Information Technology Security Products

Terrorist Social Network Analysis

In previous posts "Visualization, Intelligence and the Starlight project" and "Visualization in the Security and New Media world" I covered various security and intelligence related projects and mostly emphasized on the future potential of visualizing data. Data mining is still everyday's reality -- social networking as well. Just came across this at DefenseTech :



"It'd be one thing if the NSA's massive sweep of our phone records was actually helping catch terrorists. But what if it's not working at all? A leading practitioner of the kind of analysis the NSA is supposedly performing in this surveillance program says that "it's a waste of time, a waste of resources. And it lets the real terrorists run free." Re-reading the USA Today piece, one paragraph jumped out: This kind of data collection from phone companies is not uncommon; it's been done before, though never on this large a scale, the official said. The data are used for 'social network analysis,' the official said, meaning to study how terrorist networks contact each other and how they are tied together. So I called Valdis Krebs, who's considered by many to be the leading authority on social network analysis -- the art and science of finding the important connections in a seemingly-impenetrable mass of data. His analysis of the social network surrounding the 9/11 hijackers is a classic in the field."



It gets even more interesting with a comparison of a Fortune 500 company's network and Al Qaeda's one. Social networks are among the driving forces of Web 2.0, and I find the concept of communication and planning online a very realistic one. And if you really want to know more about social networks in the business world, corporate anthropologist Karen Stephenson - The Organization woman is really up to it, very good article. And of course, Valdis Kreb's blog on smart economic networks.

Travel Without Moving - Scratching the Floor

You don't really need a reconnaissance satellite to spot this, it's precisely the type of "sight" you can see for yourself on daily basis -- but he's still moving isn't he? :)

Pocket Anonymity

While the threats posed by improper use of removable media will continue to make headlines, here's a company that's offering the complete all-in-one pocket anonymity solution -- at least that's how they position it. From the article :



"Last month, a company called Stealth Ideas Inc. of Woodland Hills, Calif., came out with its StealthSurfer II ID Protect. The miniature flash drive lets you surf anonymously from any computer using an integrated browser that runs in an encrypted mode. It comes loaded with several tools, including Anonymizer Anonymous Surfing 1.540 (which has IP masking), RoboForm Pass2Go 6.5.9 (a user ID/password management application) and Thunderbird 1.0.7 (for e-mail access). But before you buy, check to see if the company has upgraded its browser, which, according to company officials at the product’s launch, is Firefox 1.5.0.1. US-CERT and others have warned about significant vulnerabilities in certain versions of Firefox (and Thunderbird, for that matter). The version available as of press time, Version 1.5.0.2, addresses those flaws."



Is the Anonymizer behind the idea, or is it a middleman trying to add value to the Anonymizer's existing offer, and harness the brand powers of Firefox and Hushmail all in one? Wise, but the entire idea of anonymity is based on the Anonymizer's service, when anonymity still can be freely achieved to a certain extend. Very portable idea, the thing is there are already free alternatives when it comes to pocket anonymity and that's TorPark: Anonymous browsing on a USB drive, and I think I can live without the enhancements.