Web server hacking

Russia’s Hacking Success Shows How Vulnerable the Cloud Is

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Russia’s Sunburst cyberespionage campaign, discovered late last year, impacted more than 100 large companies and U.S. federal agencies, including the Treasury, Energy, Justice, and Homeland Security departments. A crucial part of the Russians’ success was their ability to move through these organizations by compromising cloud and local network identity systems to then access cloud accounts and pilfer emails and files.

Hackers said by the U.S. government to have been working for the Kremlin targeted a widely used Microsoft cloud service that synchronizes user identities. The hackers stole security certificates to create their own identities, which allowed them to bypass safeguards such as multifactor authentication and gain access to Office 365 accounts, impacting thousands of users at the affected companies and government agencies.

Russia’s Sunburst cyberespionage campaign, discovered late last year, impacted more than 100 large companies and U.S. federal agencies, including the Treasury, Energy, Justice, and Homeland Security departments. A crucial part of the Russians’ success was their ability to move through these organizations by compromising cloud and local network identity systems to then access cloud accounts and pilfer emails and files.

Hackers said by the U.S. government to have been working for the Kremlin targeted a widely used Microsoft cloud service that synchronizes user identities. The hackers stole security certificates to create their own identities, which allowed them to bypass safeguards such as multifactor authentication and gain access to Office 365 accounts, impacting thousands of users at the affected companies and government agencies.

It wasn’t the first time cloud services were the focus of a cyberattack, and it certainly won’t be the last. Cloud weaknesses were also critical in a 2019 breach at Capital One. There, an Amazon Web Services cloud vulnerability, compounded by Capital One’s own struggle to properly configure a complex cloud service, led to the disclosure of tens of millions of customer records, including credit card applications, Social Security numbers, and bank account information.

This trend of attacks on cloud services by criminals, hackers, and nation states is growing as cloud computing takes over worldwide as the default model for information technologies. Leaked data is bad enough, but disruption to the cloud, even an outage at a single provider, could quickly cost the global economy billions of dollars a day.

Cloud computing is an important source of risk both because it has quickly supplanted traditional IT and because it concentrates ownership of design choices at a very small number of companies. First, cloud is increasingly the default mode of computing for organizations, meaning ever more users and critical data from national intelligence and defense agencies ride on these technologies. Second, cloud computing services, especially those supplied by the world’s four largest providers—Amazon, Microsoft, Alibaba, and Google—concentrate key security and technology design choices inside a small number of organizations. The consequences of bad decisions or poorly made trade-offs can quickly scale to hundreds of millions of users.

The cloud is everywhere. Some cloud companies provide software as a service, support your Netflix habit, or carry your Slack chats. Others provide computing infrastructure like business databases and storage space. The largest cloud companies provide both.

The cloud can be deployed in several different ways, each of which shift the balance of responsibility for the security of this technology. But the cloud provider plays an important role in every case. Choices the provider makes in how these technologies are designed, built, and deployed influence the user’s security—yet the user has very little influence over them. Then, if Google or Amazon has a vulnerability in their servers—which you are unlikely to know about and have no control over—you suffer the consequences.

The problem is one of economics. On the surface, it might seem that competition between cloud companies gives them an incentive to invest in their users’ security. But several market failures get in the way of that ideal. First, security is largely an externality for these cloud companies, because the losses due to data breaches are largely borne by their users. As long as a cloud provider isn’t losing customers by the droves—which generally doesn’t happen after a security incident—it is incentivized to underinvest in security. Additionally, data shows that investors don’t punish the cloud service companies either: Stock price dips after a public security breach are both small and temporary.

Second, public information about cloud security generally doesn’t share the design trade-offs involved in building these cloud services or provide much transparency about the resulting risks. While cloud companies have to publicly disclose copious amounts of security design and operational information, it can be impossible for consumers to understand which threats the cloud services are taking into account, and how. This lack of understanding makes it hard to assess a cloud service’s overall security. As a result, customers and users aren’t able to differentiate between secure and insecure services, so they don’t base their buying and use decisions on it.

Third, cybersecurity is complex—and even more complex when the cloud is involved. For a customer like a company or government agency, the security dependencies of various cloud and on-premises network systems and services can be subtle and hard to map out. This means that users can’t adequately assess the security of cloud services or how they will interact with their own networks. This is a classic “lemons market” in economics, and the result is that cloud providers provide variable levels of security, as documented by Dan Geer, the chief information security officer for In-Q-Tel, and Wade Baker, a professor at Virginia Tech’s College of Business, when they looked at the prevalence of severe security findings at the top 10 largest cloud providers. Yet most consumers are none the wiser.

The result is a market failure where cloud service providers don’t compete to provide the best security for their customers and users at the lowest cost. Instead, cloud companies take the chance that they won’t get hacked, and past experience tells them they can weather the storm if they do. This kind of decision-making and priority-setting takes place at the executive level, of course, and doesn’t reflect the dedication and technical skill of product engineers and security specialists. The effect of this underinvestment is pernicious, however, by piling on risk that’s largely hidden from users. Widespread adoption of cloud computing carries that risk to an organization’s network, to its customers and users, and, in turn,…

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