Click here to close now.

Welcome!

Web 2.0 Authors: Carmen Gonzalez, ScriptRock Blog, Yeshim Deniz, Elizabeth White, Alena Prokharchyk

Related Topics: Security, XML, Web 2.0, Open Web

Security: Article

Victim-nomics: Estimating the “Costs” of Compromise

Should you pay now or pay later?

Since launching ThreatConnect.com, Cyber Squared's Intelligence Support Team has become more effective in managing, analyzing and sharing our Threat Intelligence. While understanding the threat remains one of our core requirements, we have also begun to fill a key gap that, we feel, many within the industry are failing to address.

Providing effective Threat Intelligence requires more than just characterizing the threat from a technical perspective.  Instead, you must strike a balance between providing technical context as well as non-technical relevancy to the victim.  Industry report authors will often admire the cyber espionage problem all the while promoting their technical talents.  Unfortunately, these overly technical threat details are not easily interpreted or acted upon by today's non-technical business leaders.  So, ultimately, this shortcoming often overwhelms and distances the customer from the reality of the issue. It also reduces their ability to fully appreciate and understand how an investment toward Threat Intelligence can protect their business operations and enhance their overall corporate risk mitigation strategy.

Caveats
In the following scenario, we have masked the possible victim companies in an effort to protect their identities and have addressed the threat and its infrastructure in very general terms to acknowledge operational equities without contextually identifying the possible victim companies. We have used the data obtained in our recent discovery to walk through several hypothetical scenarios while making assumptions that give the reader a better understanding of the potential financial impact of dealing with a targeted attack.  Finally, we have notified the appropriate authorities and possible victim companies, so that they are aware of the threat and the tailored infrastructure which we believe may be directed against them or their customers.

The Facts
While recently researching a known threat group within ThreatConnect.com, we identified several interesting observables associated with targets of a single Chinese-based Advanced Persistent Threat (APT) group.  Over the course of seven days, we watched the adversary tailor their command and control infrastructure toward the specific target companies and industries.  Ten suspected targets were readily identified; they consisted of U.S. based, publicly and privately held companies across the following industries:

  • Mining & Metals
  • Aerospace & Defense
  • Manufacturing & Fabrication
  • Construction & Engineering

We researched the collective group of target organizations and found that the sum of the companies' annual revenues was approximately $54 Billion dollars.  The relative size of each company and specific industries give us insights into what the intelligence collections requirements of the attackers may have been at the time of compromise.

Company

Rounded Revenue

U.S. Company 1

$26,000,000,000

U.S. Company 2

$11,000,000,000

U.S. Company 3

$6,000,000,000

U.S. Company 4

$5,000,000,000

U.S. Company 5

$4,000,000,000

U.S. Company 6

$1,500,000,000

U.S. Company 7

$600,000,000

U.S. Company 8

$20,000,000

U.S. Company 9

$20,000,000

U.S. Company 10

$2,500,000

Total:

$54,142,500,000

In this use case, we made some assumptions based on the information available to us.  Our first assumption was that the victim companies were likely committed to making a short to mid-term investment in mitigating the immediate risk and eradicating the threat from their network.  Unfortunately, we did not have any data available to us that revealed the severity of the compromise nor did we have access to the actual budgets or investments toward a response and future threat mitigation efforts in which these respective companies may choose to make.

The cost of getting "RSA'ed":
When making assumptions, it is important that we compare apples to apples.  We can assess with a high level of confidence that the threat we are monitoring in this case is an APT of Chinese origin.  We can confidently assess that the threat is most likely persisting within the respective enterprises with the intent of conducting long term data exfiltration of proprietary information from the respective organizations.

One example that helped us put the scenario in perspective is from the 2011 RSA breach.  Between April and June 2011, RSA spent $66 million dollars in the aftermath of a March 2011 APT breach, which also resulted in the compromise of information associated with RSA's SecurID two-factor authentication technology.   It is important to note that the $66 million cleanup figure did not include the post breach expenses from the first quarter of 2011 when EMC began investigating the breach, nor does it account for any of the long-term associated costs.  EMC's 2011 earnings statement cited a consolidated revenue of $20 billion dollars.  The $66 million cleanup figure would account for 0.33% of EMC's overall $20 billion dollar revenue.  However, if we apply the same $66 million cleanup costs for RSA's total revenue of $828.2 million for 2011, we find that the intrusion had a direct impact of 7.96% of RSA's 2011 revenue.

What if?
All of the target organizations are not the same.  Their roles, sizes and revenues within their respective industries all differ.  Furthermore, many of these companies do not have a parent company the size of EMC which could absorb the cost of a $66 million dollar incident. However, each organization could respond and invest in a similar manner as RSA.  If we theorize that each company identified were to invest 7.96%, of their annual revenues to mitigate the effects of this persistent APT, the effect would be:

Company

Rounded Revenues

Cost of getting "RSA'ed"

U.S. Company 1

$26,000,000,000

$2,069,600,000

U.S. Company 2

$11,000,000,000

$875,600,000

U.S. Company 3

$6,000,000,000

$477,600,000

U.S. Company 4

$5,000,000,000

$398,000,000

U.S. Company 5

$4,000,000,000

$318,400,000

U.S. Company 6

$1,500,000,000

$119,400,000

U.S. Company 7

$600,000,000

$47,760,000

U.S. Company 8

$20,000,000

$1,592,000

U.S. Company 9

$20,000,000

$1,592,000

U.S. Company 10

$2,500,000

$199,000

Total:

$54,142,500,000

$4,309,743,000

Irrespective of size, could these companies really all afford a 7.96% hit in response to a major enterprise breach? Considering that many of the victims are either publicly traded or provide direct support to U.S. Government funded programs, most would be compelled to notify various stakeholders, such as investors, the U.S. Security Exchange Commission, and their primary customers or government contract managers.

Based on our long term understanding of this threat group, we are almost certain that a resourced Chinese state sanctioned or sponsored threat group is responsible for establishing and using the observed command and control infrastructure we have detected within ThreatConnect.com.  We also conclude that the threat group is likely conducting economic espionage on behalf of an unknown Chinese benefactor who may be in an advantageous position to operationalize and monetize the information.  What we do not know is who, when or how the information may be employed.

The targeted and persistent nature of the threat suggests that the threat actor knows what type of information they want to acquire and are concentrating their collection by targeting multiple victims within overlapping industries.  Left unchecked, enterprise compromises could facilitate access to corporate intellectual property such as research and development, confidential corporate insights, and operational plans.  Access to confidential information regarding the mining and metals industry, as well as U.S. defense aerospace, engineering and fabrication could allow the attacker to enable the manipulation of markets, conduct restricted defense related technology transfers and or obtain unfair advantages within international business or trade negotiations.

Conclusion
Until more companies come forward with details of Chinese corporate espionage, little data will be available to us regarding the associated short and long term costs. In 2011 the U.S. International Trade Commission issued a report titled "China: Effects of Intellectual Property Infringement and Indigenous Innovation Policies on the U.S. Economy".  The report details estimates of Chinese Intellectual Property Rights (IPR) infringement had cost the U.S. economy approximately $48 billion in 2009 alone, caveating the $48 billion figure that many companies were unable to quantify their losses.  The ITC report also highlighted that if China improved their current international obligations to protect and enforce IPR, 2.1 million jobs could have been created in the U.S.

Although there are numerous variables that cannot be accounted for with the data available to us, we can apply a simple model based on the RSA data that supports our hypothetical scenario and begin to see what the financial and economic effects would be across ten companies of various industries and revenues.  It is important to understand the scenario outlined above is associated with a real threat that has tailored their infrastructure and is likely exploiting the U.S. companies. Any associated enterprise exploitation would have an obvious direct and indirect effect to each company's respective annual revenues.   All of the threat data obtained is based on real-world data collected and analyzed within ThreatConnect.com.

More Stories By Rich Barger

Rich is the Chief Intelligence Officer for Cyber Squared and the ThreatConnect Intelligence Research Team (TCIRT) Director. Rich has over 17 years of experience supporting the commercial sector, defense industry, and intelligence community with threat intelligence and computer network operations. Rich is a passionate and creative thought leader that has led talented teams of researchers in producing quality analysis and actionable intelligence. After his commitment to the United States Army, Rich has supported the U.S. Army Command and Control Support Agency, the U.S. Army 1st Information Operations Command, the Joint Task Force Global Network Operations, and the NSA/CSS Threat Operations Center. Rich possesses a variety of industry certifications and a BS in Information Systems Security with Honors from American Military University.

@ThingsExpo Stories
SYS-CON Events announced today that On the Avenue Marketing Group, a sales and marketing firm that utilizes events to market and sell products to consumers, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. On the Avenue Marketing Group (OTA) is a sales and marketing firm that utilizes events to market and sell products to consumers. On behalf of our clients, we attend thousands of fairs, festivals, expos, concerts, conferences, and sporting events annually, helping them reach millions of individuals ...
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Health care systems across the globe are under enormous strain, as facilities reach capacity and costs continue to rise. M2M and the Internet of Things have the potential to transform the industry through connected health solutions that can make care more efficient while reducing costs. In fact, Vodafone's annual M2M Barometer Report forecasts M2M applications rising to 57 percent in health care and life sciences by 2016. Lively is one of Vodafone's health care partners, whose solutions enable older adults to live independent lives while staying connected to loved ones. M2M will continue to gr...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
SYS-CON Events announced today that Ciqada will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Ciqada™ makes it easy to connect your products to the Internet. By integrating key components - hardware, servers, dashboards, and mobile apps - into an easy-to-use, configurable system, your products can quickly and securely join the internet of things. With remote monitoring, control, and alert messaging capability, you will meet your customers' needs of tomorrow - today! Ciqada. Let your products take flight. For more inform...
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applications - creating more engaging experiences for their customers and boosting collaboration and productiv...
Dave will share his insights on how Internet of Things for Enterprises are transforming and making more productive and efficient operations and maintenance (O&M) procedures in the cleantech industry and beyond. Speaker Bio: Dave Landa is chief operating officer of Cybozu Corp (kintone US). Based in the San Francisco Bay Area, Dave has been on the forefront of the Cloud revolution driving strategic business development on the executive teams of multiple leading Software as a Services (SaaS) application providers dating back to 2004. Cybozu's kintone.com is a leading global BYOA (Build Your O...
The best mobile applications are augmented by dedicated servers, the Internet and Cloud services. Mobile developers should focus on one thing: writing the next socially disruptive viral app. Thanks to the cloud, they can focus on the overall solution, not the underlying plumbing. From iOS to Android and Windows, developers can leverage cloud services to create a common cross-platform backend to persist user settings, app data, broadcast notifications, run jobs, etc. This session provides a high level technical overview of many cloud services available to mobile app developers, includi...
SYS-CON Events announced today that BroadSoft, the leading global provider of Unified Communications and Collaboration (UCC) services to operators worldwide, has been named “Gold Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BroadSoft is the leading provider of software and services that enable mobile, fixed-line and cable service providers to offer Unified Communications over their Internet Protocol networks. The Company’s core communications platform enables the delivery of a range of enterprise and consumer calling...
While not quite mainstream yet, WebRTC is starting to gain ground with Carriers, Enterprises and Independent Software Vendors (ISV’s) alike. WebRTC makes it easy for developers to add audio and video communications into their applications by using Web browsers as their platform. But like any market, every customer engagement has unique requirements, as well as constraints. And of course, one size does not fit all. In her session at WebRTC Summit, Dr. Natasha Tamaskar, Vice President, Head of Cloud and Mobile Strategy at GENBAND, will explore what is needed to take a real time communications ...
What exactly is a cognitive application? In her session at 16th Cloud Expo, Ashley Hathaway, Product Manager at IBM Watson, will look at the services being offered by the IBM Watson Developer Cloud and what that means for developers and Big Data. She'll explore how IBM Watson and its partnerships will continue to grow and help define what it means to be a cognitive service, as well as take a look at the offerings on Bluemix. She will also check out how Watson and the Alchemy API team up to offer disruptive APIs to developers.
The IoT Bootcamp is coming to Cloud Expo | @ThingsExpo on June 9-10 at the Javits Center in New York. Instructor. Registration is now available at http://iotbootcamp.sys-con.com/ Instructor Janakiram MSV previously taught the famously successful Multi-Cloud Bootcamp at Cloud Expo | @ThingsExpo in November in Santa Clara. Now he is expanding the focus to Janakiram is the founder and CTO of Get Cloud Ready Consulting, a niche Cloud Migration and Cloud Operations firm that recently got acquired by Aditi Technologies. He is a Microsoft Regional Director for Hyderabad, India, and one of the f...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
WebRTC is an up-and-coming standard that enables real-time voice and video to be directly embedded into browsers making the browser a primary user interface for communications and collaboration. WebRTC runs in a number of browsers today and is currently supported in over a billion installed browsers globally, across a range of platform OS and devices. Today, organizations that choose to deploy WebRTC applications and use a host machine that supports audio through USB or Bluetooth can use Plantronics products to connect and transit or receive the audio associated with the WebRTC session.
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
SYS-CON Events announced today that Litmus Automation will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Litmus Automation’s vision is to provide a solution for companies that are in a rush to embrace the disruptive Internet of Things technology and leverage it for real business challenges. Litmus Automation simplifies the complexity of connected devices applications with Loop, a secure and scalable cloud platform.
In 2015, 4.9 billion connected "things" will be in use. By 2020, Gartner forecasts this amount to be 25 billion, a 410 percent increase in just five years. How will businesses handle this rapid growth of data? Hadoop will continue to improve its technology to meet business demands, by enabling businesses to access/analyze data in real time, when and where they need it. Cloudera's Chief Technologist, Eli Collins, will discuss how Big Data is keeping up with today's data demands and how in the future, data and analytics will be pervasive, embedded into every workflow, application and infra...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, will provide some practical insights on what, how and why when implementing "software-defined" in the datacenter.