Category Archives: Security Software

Why the Department of Defense Failed to Secure Our Computers

Every day, new viruses emerge that compromise the security of millions of computers – both personal and corporate. As government agencies increasingly rely upon commercial software for Top Secret computer systems, they found themselves facing a difficult dilemma: continue using their 80’s era software or upgrade to the latest commercial systems, while exposing themselves to the security vulnerabilities that plague everyday users.

From 1999-2001, Robert Meushaw, the director of the NSA’s Information Assurance Reserach Laboratory (NIARL), and his team worked on a solution that coul dgive hte best of both worlds. The system he developed, codenamed NetTop, uses a “sandbox” technique whereby inherently insecure software (such as Microsoft Windows and MS Office) is granted access to a limited portion of the computer. Even if one of the insecure applications was infected with a virus, it is unable to spread beyond the specific machine.

Unfortunately, the results were disappointing. Two crucial missteps ultimately led to its slow adoption within government agencies and by the general public.

The first problem was that NetTop compromised security for functionality. By being neither 100% secure, nor 100% functional, security experts were unsatisfied, and users were frustrated.

The second problem was around cost. Each “virtual” system required its own licenses. Thus, Top Secret computers that accessed six separate networks would require 6 licenses for Microsoft Windows on a single computer! Furthermore, the virtualization component was developed by a for-profit startup named VMWare (now publicly traded NYSE: VMW). As VMWare grew larger and more successful, Microsoft started to tamp down the competition by restricting its licensing terms to make virtualization even less cost-effective.

The end result has been another expensive government project with limited application and a dim future.


Hackers Target Intelligence Community Job Board

Dice Holdings (NYSE: DHX) subsidiary ClearanceJobs, an online job board for the Intelligence Community, has been hacked.

The Ukrainian-based  hackers stole the names and contact info (including email, phone and/or physical address) of members who possess active U.S. security clearance (including Top Secret / SCI for NSA and CIA).

The hackers sent the victims email messages that appeared to be an official ClearanceJobs communication. The messages included a document attachment (with a potential virus), and began as follows:

From: Pamela Jones <>
Subject: Job offer-flexible schedule and high salary.ClearanceJobs

Hello, you have received this message because you have published your CV at ClearanceJobs and you meet our requirements.

Our company is one of the best in the field of e-currency. We specialize in purchasing, selling and exchanging electronic currencies for our clients all over the world. Our firm is ISO certificated. The company has been found in 1998 and by now we are one of the leaders in this market. Our main goal is: 100% customer satisfaction that is why we are looking for honest, confident and reliable employees.

Evan Lesser, founder of ClearanceJobs, indicated that the resultant “phishing scam” was similar to those that plagued in August.

According to WashingtonTechnology, ClearanceJobs had 64,000 registered users in 2006.

From a strategic standpoint, the danger here is obvious. The Intelligence Community consists of a tight-knit group of professionals who are very discreet. In order to offer a service to these people, their primal need for secrecy must be understood, respected and protected.

Current trends on Security Software M&A Activity

I was recently asked to comment on the state of the Security Software industry. Here is how I responded:

Companies such as Symantec and McAfee are experiencing increased pressure from Microsoft, which has beefed up the built-in security capabilities in Vista. In an effort to counter this competition, the larger firms have made numerous acquisitions that will help differentiate their product portfolio and maintain product superiority. Acquisitions typically focus on two areas:

  1. Acquisitions with next-generation feature/functionality that can be incorporated into the core product suite
  2. Acquisitions that target a niche or highly specialized market that will remain impervious to any mass-market product that Microsoft introduces

As Symantec and McAfee reevaluate their portfolios over the next year, they are likely to continue acquisitions at a slower rate, as management fills gaps in the portfolio and focuses on integrating previously made acquisitions.

Whether consolidation in the industry is good or bad depends on who you are.

  • Consolidation reflects a defensive posture against Microsoft; however, it will not alter Microsoft’s slow entry into the market (nor will it alter Microsoft’s ineptness at developing secure products)
  • Symantec and McAfee will become larger and more stable, in a better position to hold off Microsoft
  • VC-backed startups will find it more difficult to scale organically to the size needed to generate 10x returns for their investors
  • Bootstrapped startups will continue to be able to find niche segments that are under the radar of the incumbents (even during and after this period of consolidation)
  • Customers will see fewer, more stable products and services with consistent levels of quality…for a price