What an interesting coincidence: I’m writing this just after finishing a webinar where we talked about the latest trends in strong authentication and the ways to eliminate passwords within an enterprise. Well, this could not have been a better time for the latest announcement from Microsoft, introducing Azure Active Directory support for passwordless sign-in using FIDO2 authentication devices.

Although most people agree that passwords are no longer an even remotely adequate authentication method for the modern digital and connected world, somehow the adoption of more secure alternatives is still quite underwhelming. For years, security experts warned about compromised credentials being the most common reason for data breaches, pointing out that just by enabling multi-factor authentication, companies may prevent 99% of all identity-related attacks. Major online service providers like Google or Microsoft have been offering this option for years already. The number of vendors offering various strong authentication products, ranging from hardware-based one-time password tokens to various biometric methods to simple smartphone apps is staggering – sure there is a solution for any use case on the market today…

Why then are so few individuals and companies using MFA? What are the biggest reasons preventing its universal adoption? Arguably, it all boils down to three major perceived problems: high implementation costs, poor user experience, and lack of interoperability between all those existing products. Alas, having too many options does not encourage wider adoption – if anything, it has the opposite effect. If an organization wants to provide consistently strong authentication experiences to users of different hardware platforms, application stacks, and cloud services, they are forced to implement multiple incompatible solutions in parallel, driving costs and administration efforts up, not down.

FIDO Alliance was founded back in 2013, promising to establish certified interoperability among various strong authentication products. KuppingerCole has been following their developments closely ever since, even awarding the Alliance twice with our EIC Awards for the Best Innovation and Best Standard project. Unfortunately, the adoption rate of FIDO-enabled devices was not particularly universal, and mostly limited  to individuals, although large-scale consumer-oriented projects supported by vendors like Samsung, Google or PayPal succeeded. Lack of consistent support of the standard in browsers restricted its popularity even further.

Fast forward to early 2019, however, and the second version of the FIDO specification has been adopted as a W3C standard, ensuring its consistent support in all major web browsers, as well as in Windows 10 and Android platforms. The number of online services that support FIDO2-based strong authentication is now growing much faster than in previous years and yet, many experts would still argue that the standard is too focused on consumers and not a good fit for enterprise deployments.

Well, this week, Microsoft has announced that FIDO2 security devices are now supported in Azure Active Directory, meaning that any Azure AD-connected application or service can immediately benefit from this secure, standards-based and convenient experience. Users can now authenticate themselves using a Yubikey or any other compatible security device, the Microsoft Authenticator mobile app, or the native Windows Hello framework.

With Azure Active Directory being the identity platform behind Microsoft’s own cloud services like Office 365 and Azure Cloud, as well as one of the most popular cloud-based IAM services for numerous 3^rd party applications, can this be any more “enterprise-y”?

We realize that the service is still in the preview stage, so there are still a few kinks to iron out, but in the end, this announcement may be the final push for many companies that were considering adopting some form of modern strong authentication but were wary of the challenges mentioned earlier. Going fully passwordless is not something that can be achieved in a single step, but Microsoft has made it even easier now, with more traditional MFA options and even support for legacy apps still available when needed.

And, of course, this could be a major boost for FIDO2 adoption in the enterprise world, which we can only wholeheartedly welcome.

Security has seldom been the focus of device manufacturers who have historically taken their own approach for securing the devices in the IoT. Most devices in enterprise, consumer or industrial IoT continue to be developed and designed to perform specific functions and security is often a neglected theme in the majority of product development lifecycles. The proprietary protocols these devices operate on are primarily characterized by the purpose they are built to serve and offer very limited or no interoperability. With the increasing convergence of IT and OT towards IoT, lack of a common operating framework and security principles pose some serious challenges for device manufacturers and also the consumers.

In an increasingly connected world where we see an explosion of networked and cloud-enabled devices ranging from home appliances to medical devices to consumer electronics, creating and maintaining device and user identities, the relationships between the various entities and ensuring the integrity of devices has remained a constant challenge for consumers as well as for the security leaders. The industry has seen the emergence of several standards from governing bodies and consortiums but we still lack appropriate mechanisms that define how the identity of things (IDoT) should be defined, standardized and deployed across operating networks and entities. Besides the need for verifying identity and establishing trust levels of various entities such as devices, people, applications, cloud services and/or gateways operating in an IoT environment – there’s a need to manage ‘Identity of Things’ or IDoT throughout the lifecycle of things.

An effective authentication and identity framework for IoT devices should be able to provide appropriate protection against cyber threats throughout the distinct operational life-cycle stages of a device depicted here in the figure:

Authentication for the devices in IoT is different and considerably lighter weight than people authentication methods prevalent today due to the potential resource constraints of devices, the bandwidth of networks they operate within, and the nature of interaction with the devices.

A lack of established industry standards for IoT authentication has led vendors to develop proprietary authentication methods. Since many IoT devices can be resource-constrained with low computing power and storage capacity, existing authentication methods are not a good candidate due to their significant bandwidth and computational requirements. There is a growing need to evaluate and streamline the methods adopted for device and service authentication over constrained IoT networks. It is important to analyze and use the factors essential for verifying the identity of ‘things’ to establish the desired level of trust in the device identity without overburdening the fit-for-purpose computing abilities of the IoT device. While there is increased adoption of the adaptations/ deviations of standard authentication methods such as PKI, OAuth and OIDC to serve the required scope and scale of the IoT use-cases, we also see the use of standards from OAM DM, LWM2M and TR-069 specifications for establishing secure communication between the constrained nodes in the IoT networks.

The resource-constrained nature of many IoT endpoints severely limits their ability to sustain prevalent authentication methods which have further led to the adoption of proprietary authentication methods in the market that do not conform to trust requirements and offer very limited or no interoperability. This is, however, changing rapidly as the industry moves from considering security as an afterthought to including it as part of the system design process. The majority of embedded systems today implement device authentication methods that rely predominantly on a software-based approach. Popular examples include use of MAC (Message Authentication Code) to enable secure key exchange for device authentication over constrained IoT protocols, as well as light-weight adaptations of PKI and OAuth2 protocols to match the scope and scale of IoT use-cases.

The software implementation of IoT authentication has notable cost and maintenance advantages but the protection offered by these methods is severely restricted by the security of embedded OS and coding practices of embedded system developer. Largely ineffective against the common software-based attacks and physical device tempering, software implementation of IoT authentication methods are known to offer limited or no protection against the next-gen IoT threats that exploit specific IoT device functions such as remote administration, device provisioning and boot sequence.

Hardware-based security approaches such as Hardware Root of Trust (HRoT) and Trusted Execution Environment (TEE) are fast becoming an industry-wide standard for securing desktops, tablets and mobile phones. These approaches have found an increased relevance to securing IoT devices. Hardware-based ‘root of trust’ offers on-chip security functions including key generation, integrity checks and attestation, which are executed in an isolated hardware environment and, therefore, offer effective protection against physical thefts. Trusted Platform Module (TPM), a prime example of HRoT implementation, when combined with software-based PKI delivers high trust authentication for IoT devices. Other than securing digital credentials, TPM trust measurements provide secure control over the boot sequence of IoT devices thereby validating the authenticity of each device as it loads up in the IoT network.

The choice of an appropriate authentication method for a given set of IoT devices is largely driven by the identity assurance requirements that vary from device to device, depending primarily on the operating environment, device lifecycle stages (as depicted in the figure above) and the impact of potential compromise through unauthorized access. IoT security designers and architects should make use of defined metrics that correlate the trust level(s) offered by available device authentication methods to the trust requirements of IoT devices. Hardware-based authentication methods such as TPM are most suited for IoT use-cases where the requirement of establishing higher levels of trust (equivalent to FIPS 140-2, level 3 to 4) in the device identity is paramount.

Since strong authentication methods that provide a higher level of trust in the device identity are not a viable option for many IoT use-cases where the concerns of additional component cost and increased device size restrict the adoption of TPM or TEE methods, considerable loss in the strength of authentication method and hence in the associated level of assurance is expected. IoT security architects should work to find out the right balance and realize an appropriate trade-off in the level of trust offered by authentication methods for each category of IoT devices in operation.

Acronyms are an ever-growing species. Technologies, standards and concepts come with their share of new acronyms to know and to consider. In recent years we had to learn and understand what GDPR or PSD2 stand for. And we have learned that IT security, compliance and data protection are key requirements for virtually any enterprise. The following acronyms and more importantly the concepts behind them can teach us about what forward-looking organizations and their leaders should be thinking of. 

MTPD stands for "Maximum Tolerable Period of Disruption". Its value determines the longest possible amount of time an organization can endure until the impact of an incident leading to a partial or complete disruption of service becomes inacceptable or a recovery becomes more or less useless. Determining this period is an exercise every reader of this text might want to do just now. It might be surprisingly low.

MBCO, closely related to the MTPD, is short for "Minimum Business Continuity Objective". It describes the baseline of services that are necessary for an organization to survive during a disruption. Another important aspect for all of us to think of. MTDL describes the “Maximum Tolerable Data Loss”. It is usually defined as the largest possible amount of data in IT systems (or analog media, like files and binders) an organization can accept to lose and still be able to recover successful operations afterwards. These terms (and many more related and relevant concepts) stem originally from the area of Business Continuity Planning, but they become increasingly important also to management and staff of IT security departments.  

One reason for that is yet another acryonym, namely “KRITIS”, which is an abbreviation of „KRITische InfraStrukturen“ (“critical infrastructure”). Critical infrastructure is defined as organizations or institutions of major importance to the state community whose failure or degradation would result in sustained supply shortages, significant public safety disruptions or other dramatic consequences.  

Originating from an EU Directive in 2008 the term is closely linked to the Federal Republic of Germany, its legislation and its efforts to reduce potential vulnerabilities of critical infrastructure. The concept aims at improving protection and resilience as a result of the increasing extent of pervasiveness and dependence of almost all areas of life with and from critical infrastructure. A German law (“IT-SiG”), and a regulation “BSI-Kritisverordnung” (“Kritis regulation”) issued in 2015/2016 are the foundation for the specification and enforcement of this significant set of requirements.  

Many countries are already looking at regulating and securing critical infrastructure as well, including  the US (Department of Homeland Security), so this is far from being just yet another German or European issue. But taking Germany as an example, the overall picture of critical infrastructure includes Energy, Information Technology and Telecommunications, Nutrition and Water, Healthcare, Finance and Insurance, Transport and Traffic. The actual scope of organizations affected can be looked up online. The core legislation is the same for each critical infrastructure, the challenge for individual industries is that sector-specific requirements need to be identified individually. The definition of industry-specific requirements is the responsibility of the individual industries, their industry associations and key corporations as exemplary representatives of their sector. However, these documents need to be government-approved.

Implementing these requirements requires organizations to think in more than just in terms of IT security. While the industry-specific requirement documents often have some IT security specific bias (usually starting with implementing an ISO 27xxx ISMS), organizations also need to consider the acronyms in the beginning of this text. This “paradigm shift” that critical infrastructure has to deal with now (and obviously had to deal with before already) is an important step for any organization. Extending security towards resilience, business continuity will be essential for almost any organization within a world of increasing challenges, including but not limited to cyber threats.

To make systems, processes and organizations future-proof, it is highly recommended to consider security, safety and business continuity more holistically. Why not use related KRITIS-requirements as a benchmark that could help you to increase your organizational maturity? Just because you are not obliged to comply does not mean that going beyond your individual, mandatory requirements cannot improve your overall security posture and business continuity approach.  

The definitions and requirements concerning critical infrastructure as they exist at an European and, in particular, German level can be regarded as exemplary in many respect. Even if they have direct relevance primarily for operators of critical infrastructure in Germany, they can serve as a basis for the design, operation and documentation of resilient architectures in Europe and beyond, due to the degree of detail and their comprehensive coverage of a multitude of sectors and industries.

And as a heads up for German readers, the update of the IT-SiG (“IT-Sicherheitsgesetz 2.0”) could be yet another game changer, so they should be prepared for more major changes in systems, processes and organization.

 

Healthcare organizations must use IAM as an integral part of their IT infrastructure in order to cope with challenges in various fields, such as compliance, regulations, cybersecurity, and Digital Transformation. In this respect, IAM not only serves as a security technology but also as a mechanism that helps responding to new business challenges and drivers.

While every industry currently has to deal with the disruptive nature of the Digital Transformation and ever-increasing cyberattacks, some of the developments are endemic to healthcare organizations. For instance, complying with new regulations such as Electronic Prescribing for Controlled Substances (EPCS) or the well-known Health Insurance Portability and Accountability Act (HIPAA).

Due to their sensitivity, patient data are a highly valuable target for hackers, which is why the healthcare industry is among the most regulated ones.

In order to protect sensitive patient data, it is inevitable for any given healthcare organization to implement a strong Identity and Access Management as a central pillar of the IT infrastructure. Control and restriction of access with the help of a sophisticated IAM is a prerequisite to the protection of information that network firewalls and single sign-on (SSO) cannot deliver.

Altogether, there are five areas a strong IAM infrastructure will bolster:

• Compliance & Regulations
• Security
• Organizational & Financial Challenges
• M&A Activity
• Digital Transformation

Compliance & Regulations: In recent years, the regulatory bar that healthcare organizations have to comply with has been raised. HIPAA, ECPS and state-level regulations, like the California Consumer Privacy Act (CCPA) are just a few. The regulations have strong authentication and refined access control at their core. They are complemented by a detailed registration of user activities. In stark contrast to other industries, healthcare providers may find themselves in emergency situations, when data must be accessed quickly. IAM delivers the infrastructure for such regulation-compliant emergency access processes.

Security: As cyberattacks rise in number and intensity, organizations have to take precautions more than ever. IT security teams in healthcare organizations must prioritize this kind of risk, especially regarding incidences of ransomware attacks against hospitals.

Most healthcare organizations still focus too little on detection while being caught up in prevention. Despite external prevention being necessary, it does not protect against internal attacks. Therefore, it is unavoidable to restrict access to sensitive data and critical infrastructure, particularly when the attacker is already in the system. IAM does not replace firewalls and other preventive measures but should always go hand in hand with them.

Organizational & Financial Challenges: Apart from having to care for their patients’ wellbeing, healthcare organizations, ultimately, are also businesses and should keep an eye on profits. Here, IAM helps increasing efficiency and convenience for user experience, for instance with an SSO portal.

The number of user types accessing systems and data within healthcare organizations is sheer incalculable: Doctors, nurses, students, patients are just a few and the number is growing. The careful distribution of user rights has its litmus test when emergency situations arise and EMR data must be accessed quickly.

Like any other kind of business, healthcare businesses often lack the resources and ownership for IAM. The latter must be clearly defined, and projects need support from sponsors within the organization.

M&A Activity: Healthcare is not exempt from M&A activity and IAM infrastructures should be designed to make a merger go as smoothly as possible. The merging organizations must federate identities and give employees, patients, and contractors adequate levels of access.

Digital Transformation: Telemedicine, EMR, and Patient Access Management result in an increase in identities as well as in complexity in access entitlements which must be controlled. The role of IAM is to support these processes in working together seamlessly. Where SSO is not enough, IAM gains center stage: Provisioning and deprovisioning of accounts, management of access entitlements, audit and governance, and granular access control.

As healthcare services become more digitalized and “consumerized”, it is IAM that must support these hybrid environments and multi-cloud infrastructures. Different types of users have different types of devices, all of which has to be considered when setting up an IAM solution, especially one that goes beyond SSO. This is the only way to address the challenges of digitization and provide secure access at the same time. Ultimately, IAM is the foundation for supporting the consumerization of healthcare businesses.

This week, Facebook announced details about its cryptocurrency project, Libra. They expect it to go live for Facebook and other social media platform users sometime in 2020. The list of initial backers, the Founding Members of the Libra Association, is quite long and filled with industry heavyweights such as Coinbase, eBay, Mastercard, PayPal, and Visa. Other tech companies including Lyft, Spotify, and Uber are Founding Members, as well as Andreesen Horowitz and Thrive Capital.  

Designed to be a peer-to-peer payment system, Libra will be backed by a sizable reserve and pegged to physical currencies to defray wild currency floats and speculation. The Libra Association will manage the reserve, and it will not be accessible to users. The Libra Association will mint and destroy Libra Coins in response to demand from authorized resellers. Founding Members will have validator voting rights. As we can see from the short list above, Libra Founding Members are large organizations, and they will have to buy in with Libra Investment Tokens. This investment is intended to incentivize Founding Members to adequately protect their validators. Libra eventually plans to transition to a proof-of-stake system where Founding Members will receive voting rights proportional (capped at 1%) to their Investment Tokens. They expect this to facilitate the move to permissionless blockchain at some point in the future. Libra blockchain will therefore start off as permissioned and closed. The Libra roadmap can be found here.

Let’s look at some of the interesting technical details related to security that have been published at https://libra.org. Libra protocol takes advantage of lessons learned over the last few years of blockchain technologies. For example, unlike Bitcoin, which depends on the accumulation of transactions into blocks before commission, in Libra, individual transactions compose the ledger history. The Consensus protocol handles aggregation of transactions into blocks. Thus, sequential transactions and events can be contained in different blocks.  

Authentication to accounts will use private key cryptography, and the ability to rotate keys is planned. Multiple Libra accounts can be created per user. User accounts will not necessarily be linked to other identities. This follows Bitcoin and Ethereum model for pseudonymity. Libra accounts will be collections of resources and modules. Libra “serialize(s) an account as a list of access paths and values sorted by access path. The authenticator of an account is the hash of this serialized representation. Note that this representation requires recomputing the authenticator over the full account after any modification to the account... Furthermore, reads from clients require the full account information to authenticate any specific value within it.”  

Transaction fees in Libra will adhere to an Ethereum-like “gas” model: senders name a price they are willing to pay, and if the cost to the validators exceeds the number of units at that price, the transaction aborts. The ledger won’t be changed, but the sender will still be charged the fee. This is designed to keep fees low during times of high transaction volumes. Libra foresees that this may help mitigate against DDoS attacks. It also will prevent senders from overdrawing their accounts, because the Libra protocol will check to make sure there is enough Libra coin to cover the cost of the transaction prior to committing it.

The Libra Protocol will use a new programming language, called Move, which will be designed to be extensible to allow user-defined data-types and smart contracts. There will be no copy commands in Move, only create/destroy, to avoid double-spend. Programmers will be able to write in higher level source and intermediate representation languages, which will be output to a fairly simple and constrained bytecode which can be type- and input-verified for security. Transactions are expected to be atomic, in that each should contain a single operation. In Libra, modules will contain code and resources will have data, which is in contrast to Ethereum, where a smart contract contains both code and data.  

Another interesting concept in Libra is the event. An event is defined as a change of state resulting from a transaction. Each transaction can cause multiple events. For example, payments result in corresponding increases and decreases in account balances. Libra will use a variant of the HotStuff consensus protocol called LibraBFT (Byzantine Fault Tolerance), which is architected to withstand multiple malicious actors attempting to hack or sabotage validators. The HotStuff consensus protocol is not based on proof-of-work, thereby avoiding performance and environmental concerns. Libra intends to launch with 100 validators, and eventually increase to 500-1,000 validator nodes.

Libra Core code will be written in Rust and open sourced. Facebook and Libra acknowledge that security of the cryptocurrency exchange depends on the correct implementation of validator node code, Move apps, and the Move VM itself. Security must be a high priority, since cryptocurrency exchanges are increasingly under attack.  

Facebook’s new subsidiary Calibra will build the wallet app. Given that Coinbase and others in the business are on the board, it’s reasonable to expect that other cryptocurrency wallets will accept Libra too. Facebook and other cryptocurrency wallet makers must design security and privacy into these apps as well as the protocol and exchange. Wallets should take advantage of features such as TPMs on traditional hardware and Secure Elements / Trusted Execution Environment and Secure Enclave on mobile devices. Wallets should support strong and biometric authentication options.

Users will have no guarantees of anonymity due to international requirements for AML and KYC. Facebook claims social media profile information and Libra account information will be kept separate, and only shared with user consent. Just how Facebook will accomplish this separation remains to be seen. The global public has legitimate trust issues with Facebook. Nevertheless, Facebook, WhatsApp, and Instagram have 2.3B, 1.6B, and 1.0B user accounts respectively. Despite some overlap, that user base is larger than a couple of the largest countries combined.

The moral argument in favor of cryptocurrencies has heretofore been that blockchain technologies will benefit the “unbanked”, the roughly 2B people who do not have bank accounts. If Libra takes off, there is a possibility that more of unbanked will have access to affordable payment services, provided there is sizable intersection between those with social media accounts and who are unbanked.  

Much work, both technical and political, remains to be done if Libra is to come to fruition. Government officials have already spoken out against it in some areas. Libra will have to be regulated in many jurisdictions. An open/permissionless blockchain model would help with transparency and independent audit, but it could be years before Libra moves in that direction. While Libra runs as closed/permissioned, they will face more resistance from regulators around the world.  

Facebook and the Libra Association will have to handle not only a mix of financial regulations such as AML and KYC, but also privacy regulations like GDPR, PIPEDA, CCPA, and others. There was no mention in the original Libra announcement about support for EU PSD2, which will soon govern payments in Europe. PSD2 mandates Strong Customer Authentication and transactional risk analysis for payment transactions. Besides the technical and legal challenges ahead, Facebook and Libra will then have to convince users to actually use the service.

Initiating payments from a social media app has been done already: WeChat, for example. So it’s entirely possible that Libra will succeed in some fashion. If Libra does take off in the next couple of years, expect massive disruption in the payments services market. It is too early to accurately predict the probability of success or the long-term impact if it is successful. KuppingerCole will follow and report on relevant developments. This is sure to be a topic of discussion at our upcoming Digital Finance World and Blockchain Enterprise Days coming up in September in Frankfurt, Germany.  

 

One of my favorite stories is of a pen-test team who were brought in and situated next door to the SOC (Security Operations Centre); and after a week on-site they were invited for a tour of the SOC where they queried a series of alarms [that they had obviously caused] only to be told “oh that’s normal, we’ve been getting these continuously all week”.

People perform penetration tests (pen-tests) for a multitude of reasons; “I inherited a budget with an annual pen-test” or “it’s required by the audit committee” are the most common. Security teams use them to justify their budgets and hopefully show how good they are, but in the worst of cases people are paying consultancy rates for a simple vulnerability scan; but rarely are they used to find the “known unknowns” or even the “unknown unknowns”.

“because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns”
- United States Secretary of Defence Donald Rumsfeld, 2002

Aside from a specific pen-test to test, say, a new website before it goes live to the Internet, pen-tests will vary in scope and quality.

So, what does a bad pen-test look like? All pen-test companies will tell you of the phone calls that start “we need a pen-test” but when quizzed they have no idea what needs testing – they just need a “standard” pen-test because they’ve been told (by their management, auditors, audit committee that) they need to perform one – the “tick in the box”.

Conversely a good pen-test will be part of a series, each testing specific aspects of security – against a plan that is informed by a business-wide threat-assessment process that strives to understand who would want to harm your business and/or steal your data combined with the motivation behind your various adversaries; everyone from script-kiddies who do it for a laugh, organized crime who want to ransom your data, to the competitor funded by state intelligence who wants to steal your pre-patent intellectual property.

The best pen-tests are those that augment a security regime where the basics are already in place and part of everyday life. Why pay for a pen-test that conducts a one-off manual vulnerability assessment, when for probably less money you can implement continuous automated vulnerability assessment?

Going back to my initial story; every pen-tester will tell you how they’ve NEVER failed to get physical access to a building; and almost all companies run flat internal networks; therefore, simply assume they will get in, and simply give them a room with a network jack for the duration of the test.

The best pen-tests, in my opinion, use your threat assessment to identify “targets” or “flags to capture”, give the pen-testers access to the output from their automated vulnerability scanning system as well as physical access to their network, and then pay a bonus for every flag they capture, web-site they actually modify, or senior executive they manage to socially engineer. Because only this type of pen-test will help identify both the “known-unknowns” and “unknown-unknowns”.

Finally, before you start any pen-test you need to understand what you will do with the results – all pen-tests will expose a level of failing – such is the nature of modern IT systems.  If you are able to pat yourself on the back and report to management “they did not manage to get in” then you either designed the pen-test wrong or hired the wrong company to perform the test.

Microservice-based architectures allow businesses to develop and deploy their applications in a much more flexible, scalable and convenient way – across multiple programming languages, frameworks and IT environments. Like with any other new technology that DevOps and security teams started to explore in the recent years, there is still quite a lot of confusion about the capabilities of new platforms, misconceptions about new attack vectors and renewed discussions about balancing security with the pace of innovation. And perhaps the biggest myth of microservices is that their security somehow takes care of itself.

Let’s get this thing out of the way first: microservices on their own are nothing more than a method of designing applications as an interconnected system of loosely coupled business-focused components. There is nothing inherent to microservices that would make them more resilient against cyber threats or prevent sensitive data from being stolen. On the contrary, microservice-based architectures rely on new tools and technologies, and those bring in new security challenges and new skills needed to mitigate them efficiently.

In fact, even if we disregard the “architectural” risks of microservices, like cascading failures or service discovery abuse, we have to agree that a modern loosely coupled application is subjected to the same risks as a traditional monolithic one – ranging from the low-level infrastructure exploits to the communication layer and all the way up to attacks targeting the application users. And perhaps no other attack vector is more critical than APIs.

As we have discussed in a recent KuppingerCole webinar, even for more traditional scenarios, API security is still something that many businesses tend to underestimate and neglect, hoping that existing tools like web application firewalls will be sufficient to secure their business APIs. Unfortunately, this could not be further from truth – APIs are subject to numerous risks that can only be successfully mitigated with a properly designed strategy that covers the whole API lifecycle – even before any code is written, let alone deployed to a backend.

In microservice-based applications, where hundreds of individual microservices are communicating with each other and with the outside world exclusively through APIs, the difficulty of securing all those interactions increases exponentially. Due to the nature of these applications, individual API endpoints become ephemeral, appearing as new containers are spun up, migrating between environments and disappearing again. And yet each of them must be secured by proper access control, threat protection, input validation, bot mitigation, and activity monitoring solutions – all those jobs which are typically performed by an API gateway. How many API gateways would you need for that?

Another challenge of microservice-based architectures is their diversity – when individual microservices are written using different development frameworks and deployed to different platforms, providing consistent authentication and authorization becomes a problem – ensuring that all components agree on a common access rights model, that they understand the same access token format, that this token exchange scales properly, and that sensitive attributes flowing between services are not exposed to the outside world. The same considerations apply to network-level communications: isolation, segmentation, traffic encryption - these are just some issues developers have to think about. Preferably, in advance.

Does all this mean that making microservices secure is too much of a hassle that undoes all the speed and convenience of the architecture? Not at all, but the key point here is that you need to do it the right way from the very beginning of your microservice journey. And luckily, you do not have to walk alone – everyone had faced the same challenges, and many have already figured them out. Others have even come up with convenient tools and frameworks that will take care of some of these problems for you.

Consider modern API security solutions that do not just focus on static infrastructure, but cover everything from proactive risk assessment of your API contracts to ensuring that each of your microservices is secured by a tiny centrally managed API microgateway. Or the protocols and standards designed specifically for microservices like Secure Production Identity Framework for Everyone (SPIFFE) – essentially the “next-gen PKI” for dynamic heterogeneous software systems. Or even full-featured service mesh implementations that provide a control and security foundation for your microservices – reinventing the wheel is the last thing you need to think about.

In fact, the only thing you absolutely must do yourself is to keep an open mind and never stop learning – about the recent technologies and tools, about the newest design patterns and best practices, and, of course, about the latest cyber threats and other risks. Needless to say, we are here to support you on this journey. See you at one of our upcoming events!

It seems almost every week in cybersecurity and IAM we read of a large company buying a smaller one. Many times, it is a big stack vendor adding something that may be missing to their catalog, or buying a regional competitor. Sometimes it’s a medium-sized technology vendor picking up a promising start-up. In the olden days (15+ years ago), start-ups hoped for going IPO. IPOs are far less common today. Why? Mostly because it’s an expensive, time-consuming process that doesn’t achieve the returns it once did. Many times, going IPO was an interim step to getting acquired by a large vendor, so why not just skip ahead? 

Mergers are not common for a few reasons. Merger implies a coming together of near-equals, and executives and boards of directors don’t usually see it this way. So even when mergers happen, they’re often spun as simply acquisitions, and one brand survives while the other fades away. Mergers also mean de-duplication of products, services, and downsizing of the workforces. Mergers can be difficult for customers of both former brands to endure as well.

In the last few years, we’ve increasingly seen equity firms purchase mature start-ups and assemble portfolios of tech vendors. I say “mature start-up” because, instead of the “3 years and out” that occasionally worked in the early 2000s, now vendors are often taking investment (Series A, B, C, D, etc.) 5-7 years or more after founding. When equity firms pick up such companies, the purchased vendor generally retains their brand in the marketplace. The equity firms typically have 3-5 year plans to streamline the operations of the components in their portfolios, make each company profitable, build value, and then sell again.

Other times large companies spin off divisions that are “not part of their core competencies”.  Maybe those divisions are not doing well under current management and might fare better in the market where they can have some brand separation and autonomy.

What motivates acquisitions? There are four major reasons companies merge with or buy others:

1. To acquire technology
2. To acquire customers
3. To acquire territory
4. Unknown

Getting a new technology to integrate into an existing suite is very straightforward. Picking up a smaller competitor to access their customer base is also a common strategy, provided it doesn’t run afoul of anti-trust laws. Large regional vendors will sometimes buy or merge with similar companies in other regions to gain overall market share. These can often be smart strategies toward building a global footprint in the market.  

Every now and then, however, we read about deals that don’t make sense in the industry. This is the unknown category. Sometimes big companies do acquire smaller competition, but do not integrate, extend, or service the purchased product. Dissatisfied customers leave. Overall brand reputation suffers. These deals turn out to be mistakes in the long run, only benefitting the owners of the purchased company. A better plan is to out-compete rather than buy-out the competition.  

Customers of vendors that are being bought or divested have questions: what will happen to the product I use? Will it be supported? Will it go away? Will I have to migrate to combined offering? If so, is now the time to do an RFP to replace it?

IT executives in end-user organizations may hold conflicting views about M&A activities. On the one hand, consolidation in the market can make vendor and service management easier: fewer products to support and fewer support contracts to administer. On the other hand, innovation in large companies tends to be slower than in smaller companies. It’s a momentum thing. As an IT manager, you need your vendor to support your use cases. Use cases evolve. New technical capabilities are needed. Depending on your business requirements and risk tolerance, you may occasionally have to look for new vendors to meet those needs, which means more products to support and more contracts to manage. Beware the shiny, bright thing!

Recommendation: executives in companies that are acquiring others or are being divested need to 

1. Quickly develop, or at least sketch, roadmaps of the product/services that are being acquired or divested. Sometimes plans change months or years after the event. When they do, let customers know.
2. Communicate those roadmaps as well as known at the time of acquisition or divestiture. Explain the expected benefits of the M&A activity and the new value proposition. This will help reduce uncertainty in the market and perhaps prevent premature customer attrition.

In summary: there will always be mergers, acquisitions, and divestitures in the security and identity market. Consolidation happens, but new startups emerge every quarter in every year with new products and services to address unmet business requirements. IT managers and personnel in end-user organizations need to be aware of the changes in the market and how it may impact their businesses.  

Likewise, executives in vendor companies, investors, VCs, and equity firms need to be cognizant of current market trends as well as make predictions about the impact and success of proposed ventures. This can help to avoid those deals that leave everyone scratching their heads wondering why did they do that? At KuppingerCole, we understand the cyber and IAM markets, and know the products and services in those fields. Stay on top of the latest security and identity product evaluations at www.kuppingercole.com.

Like many people with a long career in IT, I have numerous small computer-related side duties I’m supposed to perform for my less skilled friends and relatives. Among those, I’m helping manage a G Suite account for a small business a friend of mine has. Needless to say, I was a bit surprised to receive an urgent e-mail alert from Google yesterday, telling me that several users in that G Suite domain were impacted by a password storage problem.

Turns out, Google has just discovered that they’ve accidentally stored some of those passwords unencrypted, in plain text. Apparently, this problem can be traced back to a bug in the G Suite admin console, which has been around since 2005 (which, if I remember correctly, predates not just the “G Suite” brand, but the whole idea of offering Google services for businesses).

Google is certainly not the first large technology vendor caught violating one of the most basic security hygiene principles – just a couple months earlier we’ve heard the same story about Facebook. I’m pretty sure they won’t be the last as well – with the ever-growing complexity of modern IT infrastructures and the abundance of legacy IAM systems and applications, how can you be sure you don’t have a similar problem somewhere?

In Google’s case, the problem wasn’t even in their primary user management and authentication frameworks – it only affected the management console where admins typically create new accounts and then distribute credentials to their users. Including the passwords in plain text. In theory, this means that a rogue account admin could have access to other users’ accounts without their knowledge, but that’s a problem that goes way beyond just e-mail…

So, what can normal users do to protect themselves from this bug? Not much, actually – according to the mail from the G Suite team, they will be forcing a password reset for every affected user as well as terminating all active user sessions starting today. Combined with fixing the vulnerability in the console, this should prevent further potential exploits. 

However, considering the number of similar incidents with other companies, this should be another compelling reason for everyone to finally activate Multi-Factor Authentication for each service that supports it, including Google. Anyone who is already using any reliable MFA authentication method – ranging from smartphone apps like Google Authenticator to FIDO2-based Google Security Keys – is automatically protected from any kind of credential abuse. Just don’t use SMS-based one-time passwords, ok? They’ve been compromised years ago and should not be considered secure anymore.

As for service providers themselves – how do you even start protecting sensitive information under your control if you do not know about all places it can be stored? Comprehensive data discovery and classification strategy should be the first step towards knowing what needs to be protected. Without it, both large companies like Google and smaller like the one that just leaked 50 million Instagram account details, will remain not just subjects of sensationalized publications in press, but constant targets for lawsuits and massive fines for compliance violations.

Remember, the rumors of password’s death are greatly exaggerated – and protecting these highly insecure but so utterly convenient bits of sensitive data is still everyone’s responsibility.

Digital Transformation is one of those buzzwords (technically a buzzphrase, but buzzphrase isn’t a buzzword yet) that gets used a lot in all sorts of contexts. You hear it from IT vendors, at conferences, and in the general media. But Digital Transformation, or DT as we like to abbreviate it, is much more than that. DT is commonly regarded as a step or process that businesses go through to make better use of technology to deliver products and services to customers, consumers, and citizens. This is true for established businesses, but DT is enabling and creating entirely new businesses as well.

When we hear about DT, we think of smart home products, wearable technologies, connected cars, autonomous vehicles, etc. These are of course mostly consumer products, and most have digital device identity of some type built in. Manufacturers use device identity for a variety of reasons, to track deployed devices and utilization, to push firmware and software updates, and to associate devices with consumers.

To facilitate secure, privacy-respecting, and useful interactions with consumer of DT technologies, many companies have turned to Consumer Identity and Access Management (CIAM) solutions. CIAM solutions can provide standards-based mechanisms for registering, authenticating, authorizing, and storing consumer identities. CIAM solutions usually offer identity and marketing analytics or APIs to extract more value from consumer business. CIAM is foundational and an absolutely necessary component of the DT.  

CIAM solutions differ from traditional IAM solutions in that they take an “outside-in” as opposed to the “inside-out” approach. IAM stacks were designed from the point of view that an enterprise provisions and manages all the identities of employees. HR is responsible for populating most basic attributes and then managers add other attributes for employee access controls. This model was extended to business partners and B2B customers throughout the 1990s and early 2000s, and in some cases, to consumers. Traditional IAM was often found lacking by consumer-driven businesses in terms of managing their end-user identities. HR and company management doesn’t provision and manage consumer identities. Moreover, the types of attributes and data about consumers needed by businesses today was not well-suited to be serviced by enterprise IAM systems.  

Thus, CIAM systems began appearing in the 2010s. CIAM solutions are built to allow consumers to register with their email addresses, phone numbers, or social network credentials. CIAM solutions progressively profile consumers so as not to overburden users at registration time. Most CIAM services provide user dashboards for data usage consent, review, and revocation, which aids in compliance with regulations such as EU GDPR and CCPA.

CIAM services generally accept a variety of authenticators that can be used to match identity and authentication assurance levels with risk levels.  CIAM solutions can provide better – more usable and more secure – authentication methods than old password-based systems. Consumers are tired of the seemingly endless trap of creating new usernames and passwords, answering “security questions” that are inherently insecure, and getting notified when their passwords and personal data are breached and published on the dark web. Companies with poor implementations of consumer identity miss out on marketing opportunities and sales revenue; they also can lose business altogether when they inconvenience users with registration and password authentication, and they suffer reputation damage after PII and payment card breaches.

In addition to common features, such as registration and authentication options, consider the following functional selection criterion from our newly published Buyer’s Guide to CIAM. Compromised credential intelligence can lower the risks of fraud. Millions of username/password combinations, illegally acquired through data breaches, are available on the dark web for use by fraudsters and other malefactors. Compromised credentials intelligence services alert subscribers to the attempted use of known bad credentials.  All organizations deploying CIAM should require and use this feature. Some CIAM solutions, primarily the SaaS vendors, detect and aggregate compromised credential intelligence from across all tenants on their networks.  The effectiveness of this approach depends on the size of their combined customer base.  On-premises CIAM products should allow for consumption of third-party compromised credential intelligence.

Lastly, CIAM solutions can scale much better than traditional IAM systems. Whereas IAM stacks were architected to handle hundreds of thousands of users with often complex access control use cases, some CIAM services can store billions of consumer identities and process millions to hundreds of millions of login events and transactions.  

Over the last few years, enterprise IAM vendors have gotten in on the CIAM market. In many cases they have extended or modified their “inside-out” model to be more accommodating of the “outside-in” reality of consumer use cases. Additionally, though traditional IAM was usually run on-premises, pure-play CIAM started out in the cloud as SaaS. Today almost all CIAM, including those with an enterprise IAM history, offer CIAM as SaaS.

Thus, CIAM is a real differentiator that can help businesses grow through the process of DT by providing better consumer experiences, enhanced privacy, and more security. Without CIAM, in the age of DT, businesses face stagnation, lost revenues, and declining customer bases. To learn more about CIAM, see the newly updated KuppingerCole Buyer’s Guide to CIAM.