Social Media – C-Levels Tricked and Trapped

During various conversations at the dmexco 2012 in cologne I realized that Social Media Risk Management already hit the boardroom but almost nobody is aware of it. So was I!

The reason why I believe that social media already reached the boardroom is so simple and so complex at the same time.

Almost everybody knows that you need to be active on social media. As social networks and social media is constantly gaining more and more power it is the ultimate source to solve a couple of challenges companies and their C-Levels experience:

Marketing Efficiency

Who wants to spend millions for marketing campaigns some really enthusiastic and creative brains build without giving you the tools to find out how effective your campaign is.

War for Talents

New employees are the lifeblood of every professional services firm. Attracting the right people and retaining them is key. But how do you do that? Go social! Young people leaving university and school have an incredibly huge social media competence and define themselves different than people like I did at their age. During interviews with potential candidates for our firm I had to realize that the questions I am asked are different than 10 years ago. People ask for BYOD, Smartphones, Work Life Balance Concepts, Mobility Concepts and much more. Most of the time they already used social media to inform themselves about my company. They even do not use our website, but they use facebook and twitter. So going social is not optional! It’s mandatory and therefore it’s a boardroom issue. The C-Suite usually approves this “HR stuff”.


Is customer relationship management an application to plugin to you ERP system or buy a monumental application that stores all your client data. I believe we will see distributed CRM systems in the future. These are the Facebook profiles, twitter lists and Xing / linked in groups which are the data marts for future CRM systems. Right now most of the professional people, being active on social networks, maintain not only private but also business contact lists and support sales and delivery through these channels. It became more viral than most of the non social networking C-Levels believe. In the end it means that you need to rely on those people acting in social networks and facilitate sales and generate leeds. In most of the companies (especially the professional services firms)  this is done unintentionally and the leaderships are overwhelmed by the “new” opportunities that arise.

What is the conclusion

You might ask yourself or me why a blogger about security and risk management writes something about CRM and war for talents and what this has to do with Social Media Risk Management.

As I already said it is simple but also complex. Everybody accepts that social media is in important factor in people’s life and business matters. We design campaigns for our businesses.  We sometime try to enforce social media policies. But do we really think that there is a difference between private and professional social media? We think so but it’s not! People have to disclose which company they are working for or they should not write one word about this company and stay private.

When asking people about their profiles on social network sites like facebook I very often get the answer:

Uuuh good question, but I am prepared for this! I arranged this in a propper way: facebook is used privately and linkedin is used in the professional part of my life!

Sounds reasonable but reality looks different. If you look at those facebook profiles you see that people disclose their company name and their position in the firm. This is the moment when a private account is not private any more. In Germany there was a law suite about where the judges came up and said that the use of a company name and maybe writing that you want to get (business contacts) is sufficient to assume you are not a privateer and that you have to behave professional.

Following this argumentation the C-Levels need to be in control over what their employees do just in case a third party cannot find out ad hoc if a person is a private or a professional person when looking at posts or their profiles.

C-Levels need to have an overview, who is acting as an employee of their company (even when knowing it). And last but not least it means that C-Levels have to enforce and monitor the use of policies in these open spaces. Right now I believe that boardroom members do not realize that they have to extend their control to social media or tell their people that they may not act on behalf of the firm and have to stay strictly private.

But who wants this? Nobody! You would loose the viral effect of social networks!

I know that this is a provocating statement but I absolutely believe what I wrote. Any comments are highly appreciated.

Collateral Damage of Cyberwarfare is Unpredictable – Security 2.0

During the last quarter of this year I had a lot of talks with CISOs and CIOs from major European companies about the impact of cyber warfare on their organizations.

Most of them refused even thinking about the impact of cyber warfare, which I can absolutely understand since most of them are not working in the defense industry and thinking about warfare is nothing we like to do. Nevertheless I feel that everybody should be encouraged to think about this topic and what it means to civil organizations in general.

Remember the latest press releases about Stuxnet, Duqu and Flame. What was / is the difference between cyber warfare and traditional war concepts.


Artwork found on jewlicious

The main difference – and that is what makes it so important to me – is that collateral damages can never be linked directly to the armed conflict. In traditional warfare concepts you will always be able to see the collateral damage caused by a bomb. You will see it on TV. You will see it in the press. You will hear it on the radio.

With cyber arms no one really knows who fired the gun – remember distributed attacks – and who is the target. Companies or organizations experience that they are hit by a serious attack but never know if they have been really the target. They just feel like it.

But what does that mean to civil organizations and companies?The situation regarding cyber attacks is heating up. We increasingly see serious attacks which are linked to those three “governmental” viruses (Stuxnet, Doqu, Flame) or experience malicious code like the trojan code built by the German government, called the “Staatstrojaner”. After Stuxnet we saw a huge number of organizations that had security incidents linked to Stuxnet which underpins the opinion that the company might experience a collateral damage without even knowing that it is the result of a (cyber) armed conflict. One nationstate might attack the other using cyber arms turning off the light in small and medium businesses in other, not in this conflict involved, countries, disturb operations in hospitals and so forth.

In the future companies need to built their own “cyber shield” to protect themselves against this kind of “advanced persistent threat”. In case of Stuxnet, Duqu and others we can learn that these intelligent pieces of code have been distributed in a way where traditional concepts like IDSes, IPSes and firewalls have been useless. Distribution was done using eMails, USB sticks, removable media and other very simple vehicles. They did not cross traditional company borders.

The conclusion is: Perimeter security does not work anymore and companies need to rely on safeguards they will have to put around individual assets. We arrived at the absolute need to create asset based security mechanisms instead of big walls! This is another reason why I believe: We reached security 2.0! We need to change the way we are doing security. I absolutely know that I do not meet everyone’s opinion of this serious topic but nevertheless I encourage you to discuss it with me and discuss what you feel what security should look like in the future. Maybe I am wrong. Convince me if I am wrong!

Cloud Computing – Security versus Industrialization

Some of you asked me to write more about Cloud Computing and issues related to this topic from the security and forensics space.

I would like to share some experiences that I made during the last year mainly from (Public) cloud projects where my team and I discussed security issues with business owners but also with security experts. Sometimes I am really worried about what I see and hear.

The Mystery of Cloud Computing Hardware

I can’t resist to write this paragraph because it was so surprising to me. In one of the project kick offs an experienced penetration tester of major German security firm said:

“Hm – the stuff I saw in the presentation was ordinary IT – I am missing the cloud technology!”

I found this comment a little bit bizarre because it shows that there is not yet a common understanding of what Cloud Computing is.

According to the NIST definition it is not a hardware or software model. It is a service delivery approach for IT services. The conclusion must be: Never expect to see a hardware register or a software register that tells you “This is a Cloud”.

Key criteria to name a service a cloud service are:

  • On demand self service
  • Broad network access
  • Ressource pooling
  • Rapid elasticity
  • Metered service

Taylormade Public Clouds for each Client – lessons learnt about cloud strategy

Just in case a security advisor tells you:

Let me take a look at the cloud offering of provider XYZ and I’ll tell you what you need to change to be secure.

What is wrong about this statement? From my perspective this approach helps you to leave your path of industrialization and helps you to move back to IT manufacturing. I know that this is sarcastic thinking but the reason why I believe that you are a on a path of industrialization is that you are thinking about a highly automated delivery approach for IT when thinking about Cloud Computing. In case that you will tell your provider

  • “Implement this control”
  • “Create that report”
  • “Change authorizations in this way”
  • “Move my data to a single datastore”
  • “Do not host any other clients in the same environment you are using for me”

you are loosing the efficiency of a cloud service that is usually designed to run without paying attention to individual needs.

If you want to have your own resources you are stepping back to traditional service delivery concepts which are called “IT Outsourcing”.

Let me clarify my thoughts: It is the right idea to test your suppliers and find out whether they are able to deliver the level of security you need. But it is the wrong idea to start negotiating what they need to change to meet your expectation. The only moment when I feel that this is acceptable is the moment when your requirements would be accepted as general requirements to be implemented for each cloud user.

The consequence of negotiating hardware and software architecture as well as the delivery model and individualizations of a service model would be one of the following or even both in combination:

  1. Service Quality would remain the same like the contracted while other clients will benefit from continuous improvement processes.
  2. Cost model for the service will be higher than for the “standard service” due to individualizations.

I think you would not want to experience this.

Just in case that you experience breach of regulations you might want to discuss this with a cloud provider because complying with regulations is mandatory and not optional and is in the interest of the provider.


I want to summarize some basic Do’s and Dont’s when negotiating cloud service contracts:

  • Never change the delivery model – Do not try to change the IT architecture
  • Always test the service if it meets your requirements
  • Check for compliance
  • Never change the reporting format

I know that it attracts a huge number of consulting firms that tell you to negotiate changes with cloud providers to meet your expectations. Resist!

If you are talking about your own custom made cloud you can do whatever you want – but not with a public cloud service!

Security Goes Accounting

John D. Rockefeller IV, Chairman of the US Senate Committee on Commerce, Science and Transportation said:

“This guidance fundamentally changes the way companies will address cybersecurity … It will allow the market to evaluate companies in part on their ability to keep their networks secure.”

 What does that mean? 

To make a long story short: If your IT environment is critical to your business you need to consider the risk associated with it and evaluate potential risk caused by cybersecurity issues like DDoS, intrusions etc. and potentially include statements about this in your SEC filings.

The longer version of this short story!

Under „CF Disclosure Guidance: Topic No2. – Cybersecurity“ the SEC clarifies that existing disclosure requirements already include the evaluation of cybersecurity risks. They stated that potential investors may have an interest in evaluating a potential investment also based on security risk considerations.

Item 503(c) of Regulation S-K represents the heart of this guidance. Here registrants are requested to disclose significant risks that could affect investments in this registrant in a negative way, thus make investments speculative or risky in general. The guidance points out that regstrants shall disclose their risks associated with cybersecurity incidents or cybersecurity risks in general if they are considered tob e a material factor to the registrant.

As part of the evaluation registrants should consider likelihood and magnitude of those risks.

This includes various things like:

  • Outsourced functions
  • Business that might be affected by cybersecurity incidents
  • Already experienced cyberincidents

Where and how to disclose what?

Prevention / Software

Prevention of cyberattacks have to be registered in accordance with ASC (Accounting Standard Codification) 350-40, Intangibles – Goodwill and Other – Internal Use Software

Incentives / Penalties

To mitigate security breaches by providing incentives to clients have to be registered in accordance with ASDC605-50


Cyber Incidents may cause losses which have tob e registered in accordance with ASC 450-20, Contingencies – Loss Contingencies

Conclusion – Business Impact

First of all registrants need tob e aware of potential cybersecurity incidents and risks. This means that incident detection and response are absolutely mandatory to conclude on security breaches, but also a cyberthreat related risk approach is vital to determine potential monetary implications of a cybersecurity incident.

CFOs may tend to the position that IT itself is not critical to their business but as cybersecurity incidents become more and more serious and attacks become more and more focussed, a mind shift is essential to comply with accounting standards. Up to now there are only few companies that have a direct and effective link from their security function to their finance function. This is an essential requirement which can facilitate a mind shift in finance and security leading to improved skillsets in both functions.

Now CFOs have to understand security! With their 20-F filing at the SEC they confirm that they have taken security into their considerations and accounted for them propperly. This is not explicitely stated but implicitely. Since this guidance is in place no CFO can anymore deny the implications of security to their financial statements. SEC staff will question disclosures if in press and media registrants are mentioned together with security incidents that have caused business disruption. Certain industry sectors will not be able to deny anymore that they might be affected (e.G. Telcos seen as first line of defense by their countries).

The security function now needs to improve their accounting skills to better support the finance function regarding the compliance with disclosure controls and procedures. They need to understand the implication of security incidents on financial statements.

The last but most political consequence is that procurement organizations may take a look at the disclosures and add cybersecurity disclosures to their criteria list to register or remove suppliers from their supply chain. Nations may use this criteria to secure national supply chains.


Next Generation Security – See how Facebook, Cloud Computing and Tablets change our lives!

The use of IT has gone through radical change in recent years and will see increasingly radical change in the future. More and more enterprises are getting involved in the opportunities and risks of cloud computing in all its different forms. This would therefore be a good place to clarify what other hot topics would be wise to consider in the context of cloud computing and what this will all mean for information security in particular.

For instance, seeing cloud computing in connection with Bring Your Own Device (BYOD) and social networks – two of the latest IT hypes –can be particularly exciting as this raises new information security issues.

The first question is why there has been so much hype around BYOD and how it relates to cloud computing.

Given the demographic shift, the related lack of qualified experts and the resultant general employee situation among today’s enterprises – a veritable job-seeker’s market – it is now more important than ever before for enterprises to take the needs of their employees to heart so as not to lose sight of the target markets. New employees are attracted to enterprises that have their individual, personal needs in mind, while long-time employees expect their employers to offer an evolving personal working environment that keeps pace with the times.

By now, the use of consumer devices has grown to become part and parcel of an attractive working environment. An IDC study from 2010 shows that about 95% of all employees also use consumer devices. So it is only logical for them to want those devices to be more integrated into the business structure. That integration is increasingly made possible by web based services, which are provided as cloud services.

One good example is the provision of storage capacity, which can be accessed through enterprise devices, consumer devices or a range of general device types. Cloud services make it possible to use to these consumer devices all at one and the same work location. This is also evident from the number of cloud users: since the launch of Android-based consumer devices in 2008, public cloud computing services have grown. While this trend might not be directly attributable to the new generation of devices, the statistics show a define connection.

By analysing different studies on cloud computing (e.g. Cloud Monitor 2012 – one can conclude that public and private cloud services, in spite of the difference in popularity between the two cloud types at present, will converge in the future. The hybrid cloud will therefore be the de-facto cloud model of the future.

The proliferation of social networks can be seen as another phenomenon. While we see different social networks, whose business model is based on actual ‘networking’, the ‘main players’ in this industry see the network as a means to an end to generate large numbers of users. These are then marketed (e.g. advertising) as the actual value added. In particular, some networks have specialised in reusing the identities in their database for authentication services. Facebook, Twitter, Google Yahoo and LinkedIn can be cited as the main examples. Who the market leader is depends on the field of use ( Facebook and Twitter almost always range among the top three.

Banks, mobile telephone providers or government agencies would be more likely candidates for B2B authentication systems given the confidentiality issues. And yet, Facebook has grown to become the leading provider of authentication systems (Facebook: 39% market share followed by Google with 19%, source: Gigya, 14 July 2012). In the first year of Facebook Connect alone, Facebook had signed up 80,000 websites and continues to sign up about 100,000 website a year. That social networks have become the dominant public authentication providers is something we simply cannot ignore.

So what do BYOD and social networks mean for cloud computing? Assuming that the proliferation of mobile consumer devices will promote the growth of hybrid clouds, it will likewise be necessary to use authentication providers that support authentication across the widest range of different platforms, both public and private. That is exactly what the social networks are pushing for here.

If we follow this logic, we also see a change in the need for information security.

Neither social networks nor public clouds can be swayed by enterprise security measures. Security in the sense of conventional border defences is only effective to a limited extent. That makes it increasing important to protect enterprise value while being able to react effectively to security incidents in cloud environments once they are detected. In the end, the data – whether stored on mobile consumer devices, social networks or in a cloud – are owned by company management. They remain responsible!

This results in three main aspects, which are dealt with below:

  1. Prevention of security incidents through risk-oriented measures
  2. Detection of security incidents
  3. Effective incident reaction