Richard Stallman - the man that gave us GNU - doesn’t trust Cloud providers with his data and says you shouldn’t either.  Richard believes we should store our private data on our own computers using ‘free’ (as in freedom) software.  The ironic part for Richard is that a significant portion of the Cloud is powered by open source software which he indirectly created (think gcc).

Richard sees it as a question of control.  Control is important but it isn’t the only variable.  Rather, I see it as a question of control, competence and economics.

The quick rebuttal to Richards’ view is this: the average computer user is not as smart as you.  Control is not the same as competence.  Control is about exercising choice, not about requiring everyone in the world to develop sufficient skills to protect complex hardware and software systems (aka their computer) against ever increasing threats.

My view is that privacy is not ‘free’.  It comes at a cost.  Whether you run your own systems or rely on someone else to do it, there is a cost.  There is cost in designing and implementing mechanisms to support privacy.  Beyond upfront costs there are ongoing expenditures to ensure privacy is maintained e.g. maintaining access control lists, testing and applying security patches, data leakage prevention etc.  None of these things are ‘free’.

If we agree that privacy costs money then how much is your privacy worth?

Stop for a second - think of a number…  

Now did we all think of the same number?

The problem with a one size fits all approach to privacy is that we each place a different value on it.

Checking in on the EPIC site, I saw this:  

A new report from Pew Internet and American Life Project indicates that “cloud computing” applications, such as web-based email and other web apps, are raising new privacy concerns. The report Use of Cloud Computing: Applications and Services found that 69% of online Americans use webmail services, store data online, or use software programs such as word processing applications whose functionality is located on the web. At the same time, “users report high levels of concern when presented with scenarios in which companies may put their data to uses of which they may not be aware.” For example, 90% of respondents said that they “would be very concerned if the company at which their data were stored sold it to another party,” 80% say “they would be very concerned if companies used their photos or other data in marketing campaigns,” and 68% of “users of at least one of the six cloud applications say they would be very concerned if companies who provided these services analyzed their information and then displayed ads to them based on their actions.”

What does that tell us?

The average (American) Internet user finds Cloud services convenient but has concerns about how their privacy might be affected by Cloud providers actions (duh!).  The survey identifies a lack of awareness in how private data is used in some consumer based Cloud services (consistent with web advertising awareness surveys).  

Unfortunately, the results of this survey are not very actionable.  The survey doesn’t mention whether these are all ‘free’ Cloud services (we can only assume they are) or ask the respondents what their expectations of privacy are and how much they would be willing to pay for different privacy assurance levels. 

On a sidenote, respondents were not asked if they had actually read the privacy agreement for the services they signed up to.  But the providers know if they did or not…  Or at least, they have the data to figure it out.  At sign up time they can measure the time between displaying the privacy agreement and the user clicking ‘I accept’.  If its just a few seconds then its pretty obvious there was more scrolling than reading going on.  But I think we can probably guess the answer without the data ;-).

I believe we need to be able to link expectation of privacy with cost.

• How much are you willing to pay for privacy?  What level of privacy assurance do you need?
• How much is your Cloud Provider paying to protect your privacy today?  What privacy services could they reasonably offer if they had customers willing to pay?  How might this compare with how you manage your private data on your home computer today?

The cynical view is that we expect privacy but don’t want to pay for it.  Its a bit like uptime - there is a parallel universe out there, where internal IT departments allegedly meet their 99.999% uptime SLAs, but when Gmail goes down, the Sergey Brin witchcraft dolls come out.

From a provider perspective, the “cost” of privacy invariably gets bundled under that line item called ‘Information Security’.  And don’t be fooled, the cost of privacy in reality is more than the salary of the person employed to be the privacy advocate (if there is one).  If we can’t see how much our providers are spending on our privacy then how can we judge if they are spending enough?  And what is enough?  And what can I get if I’m willing to pay a little extra?

Personally, I would rather we get some transparency around privacy costs and assessment of offerings.  However, without a sufficiently sized market of customers willing to pay for privacy assurance and Cloud Providers willing to be more open, I won’t hold my breath.

What about you?  Would you be prepared to pay for privacy?  Should providers be more transparent about what they do and don’t do and how they do it?
 
 

I’m assuming the author wants us to read the title as “Things to Look Out For in Performing Risk Analysis” and not “Risk Management is Folly - Stop, Stop, Stop!” The former is fine, the latter isn’t supported by the evidence presented by the subjects of the article.
The subjects of the article are a good study from Wade Baker & Co. at Verizon, and a report from RSA’s Security for Business Innovation Council. Let’s take a look at each of these and examine why what they’re saying might contribute to poor risk management, shall we?

1.)  THE VERIZON REPORT

The Verizon report is an analysis of some 530 forensic investigations their company performed.  It is well worth your time as it’s chock full of interesting information.  As it relates to the Dark Reading piece, a coarse summary would be that “likelihood” is “different” for different people and so you can’t use the same “likelihood” across different industries.

Distilled through the lens of FAIR:

“different threat communities may be applicable based on Probability of Action factors which include: Value, Level of Effort and Risk (of Getting Caught).”

Or, even further distilled and in the words of my six year old son,

“Duh-uh”.

With regards to what I assume is the purpose of the article (What Doesn’t Work in Risk Analysis) this concept  seems just to rehash the old GIGO argument regarding risk analysis.  Great.  Can’t argue with that, nor it’s corollary QIQO (quality in, quality out).

But let me ask you -  is this really a problem common in your analysis?  Did reading this article make you go “Crap, we’ve been using data normalized across multiple industries in our analysis! They’re all wrong!”  Or have you already been accounting for the unique value proposition your company has to the specific threat community you’re worried about?  See, maybe I’m just not your average analyst, but even in my NIST/OCTAVE days, this has *never* been an issue for me.

Let me be specific, this is not a problem with Verizon’s very cool report.  It’s just that I don’t see what the big deal is.  This article is starting to feel like someone is running through the motions, trying to play the ” a crazy title gets people to read a boring article” game.

Speaking of cool reports - You know what would be cool?  I think it would be interesting to see is the quality of these companies’ “risk management process” established using good criteria,  and then correlated to the frequency and magnitude of real-world losses across the aggregate sample.  In other words, can we establish evidence that strong risk management practices not just reduce “risk” but also reduce actual incidents.

2.)  THE RSA COUNCIL “EXPLORES WHY LEGACY METHODS OF EVALUATING INFORMATION SECURITY RISK DON’T WORK IN TODAY’S CONNECTED WORLD, IN WHICH ANY NEW BUSINESS INNOVATION INHERENTLY CARRIES SOME LEVEL OF RISK TO INFORMATION.”

This report from the RSA council puts forth a seemingly obvious proposition, that risk must be balanced by reward.  Why is this news?  Now as I read the article it’s not clear if:

• The RSA Council is claiming that the CISO’s office should be the ones determining reward.  Absurd.

or

• Businesses aren’t doing a good job at determining risk and reward.

Let’s go with the latter.  So I’m pretty sure (good) businesses do a good job at estimating reward.  Businesses I’ve been a part of?  We LOVE(D) estimating reward.  We don’t tend to start projects all willy-nilly. No we tend to be careful to identify the size of the market and what it will cost to address the market.  So what could the problem be that this RSA council is trying to address?  Maybe it has to do with something like the following:

Yesterday, I got a demo of an IT-GRC application that shall remain nameless.  It seemed to be very good at the “C” bits - lots of information on regulations and expectations and even what sorts of controls would answer the regulations (which is goofy, but we’ll have to talk about that later).  It also gave you the ability to build workflow quite nicely.  But it measured NOTHING.  There really was no observable “G” and “R” was really Medium X Low X Low = High sorts of stuff.  So let’s use this relatively expensive tool as evidence of what your average CISO is armed with going into a Risk/Reward sort of meeting.  I imagine a nice board room with wood-grain paneling and glass bowls filled with little chocolate covered mints designed to give everyone involved in the meeting (CEO, CFO, CIO, CSO, VP S&M, etc…) a little sugar rush when needed and fresh breath.  The conversation goes a little something like this (apologies to Rich):

Business Guy Who Wants to Make Money Because That’s What Businesses Do: Based on market studies, we believe that initial gross revenues from the new product and technology rollout will be eleventy gazillion dollars based on a 37% market penetration in Scandinavia, alone.

CSO: Well now, we have a likelihood of “High” and a “C” impact of Medium, and an “I” impact of Low, and an “A” impact of “High” and because we are a (bank/hospital/retailer/basically any business that breathes anymore) we weight “C” by a factor of 2 - we multiplied those all together and got a “High”.

So can you guys delay the product rollout by 9 months and give me a bunch more money that’s not in the budget so that I can get this thing down to a “Medium”, please?

Again, I just don’t see the problem with Information Risk Management being that our businesses have no idea what the rewards of business might be.  Now maybe we need get a seat in that boardroom just to be able to talk about our “Mediums”, sure.  And maybe we’re infantile in our ability to describe our problem space.  But I cannot fathom that “Risk Management Doesn’t Work” because businesses haven’t been considering “reward”.

WHY RISK MANAGEMENT MAY  NOT BE WORKIN’ FOR YOU

Two meta-categories of causation:

• No skills

and/or

• No resources

Any ancillary “cause” can be mapped to one of these categories.  You could have significant resources but crappy models, and have conversations like our imaginary CSO, above.  You could have really good models and people trained and motivated to use them, but scarce time & money, so no conversation happens.

Now my question for you is - which does it make sense to acquire *first* to solve the “Why Risk Management Doesn’t Work” problems, skills or resources?

Charlie Rose:  
And so when you look at where we are going, there seems to be two issues that are apparent to me at least, risk and leverage.  We just lost sight of risk and leverage of what was appropriate?

Warren Buffett:  
Yeah.  Again, because it pays off for a while.  You know, you can lose leverage, and it's the only way a smart guy can go broke.  If you owe money, you can't pay them out.  You just pay for everything, you do smart things, you eventually get very rich.  If you do smart things and use leverage and do one wrong thing along the way, it could wipe you out, because anything times zero is zero.  But it's reinforcing when the people around you are doing it successfully, you're doing it successfully, and it's a lot like Cinderella at the ball.  I mean you know at midnight everything is going to turn to pumpkins and mice; right?  But if the evening goes along, I mean, you know, the guys look better all the time, the music sounds better, it's more and more fun, you think why the hell should I leave at quarter of 12.  I'll leave at two minutes to 12.  But the trouble is, there are no clocks on the wall.  And everybody thinks they're going to leave at two minutes to 12.

Charlie Rose:  
And should wise people have known better?

Warren Buffett:  
People should always know better.

Charlie Rose:  
Yeah.

Warren Buffett:  
I mean people -- people don't get -- they don't get smarter about things that get as basic as greed and you can't stand to see your neighbor getting rich.  You know you're smarter than he is, and he's doing these things, you know, and he's getting rich, and your spouse is getting unhappy with you because you aren't doing -- pretty soon you start doing it.  And so you get what I call the natural progression, the three Is.  The innovators, the imitators, and the idiots.  And that's what happens.  Everybody just kind of goes along.  And you look kind of silly if you disagree.  I mean, you know, you could have these crazy Internet valuations in the late 1990s, but they prove themselves out in the market.  The next day they were selling for more than they were the day before, and people said, you know, you're crazy if you don't get in on this.  So it's very human.  Now, with housing it's something even more dramatic than that, because most people aspire to own their own home.  And if you really think that houses prices are going to go up next year and the year after, you feel if I don't buy it this year, I'm going to have to buy it next year.  That's not true of an Internet stock.  But it's true of a home.  And when somebody makes it very easy for you to do it by saying you don't really have to put up my money, you can lie about your income a little, or we'll give you 100 percent mortgage, you're going to do it, because everybody that's done it has been proven right.  You have what they call social tools, and, you know, you're going to feel like an idiot if you didn't do it, because the house cost more.

Warren Buffett:  
Oh, I think confidence will come back.  I will tell you this.  This country is going -- be living better ten years from now than it is now.  It will be living better in 20 years from now than ten years from now.  The ingredients that made this country, you know, the miracle of the world -- I mean we had a seven for one improvement in the average American standard of living in the 20th century.  Now, we had the great depression, we had two world wars, we had the flu epidemic.  You know, we had oil shock.  You know, we had all these terrible things happen.  But something about the American system unleashed more and of a potential to human beings over that hundred years so that we had a seven for one improvement in -- there's never been any -- I mean, you have centuries where if you've got a 1 percent improvement, then it's something.  So we've got a great system.  And we've got more productive capacity now than we ever have.  The American worker is more productive than he's ever been.  We've got more people to do it.  We've got all the ingredients for a sensational future.  It's just that right now the athlete's on the floor.  But we -- this is a super athlete.

The announcement is of course Good News — because once the PCeU is up and running next Spring, it should plug (to the limited extent that £2 million a year can plug) the “level 2″ eCrime gap that I’ve written about before. viz: that SOCA tackles “serious and organised crime” (level 3), your local police force tackles local villains (level 1), but if criminals operate outside their force’s area — and on the Internet this is more likely than not — yet they don’t meet SOCA’s threshold, then who is there to deal with them?

In particular, the PCeU is envisaged to be the unit that deals with the intelligence packages coming from the City of London Fraud Squad’s new online Fraud Reporting website (once intended to launch in November 2008, now scheduled for Summer 2009).

Of course everyone expects the website to generate more reports of eCrime than could ever be dealt with (even with much more money), so the effectiveness of the PCeU in dealing with eCriminality will depend upon their prioritisation criteria, and how carefully they select the cases they tackle.

Nevertheless, although the news this week shows that the Home Office have finally understood the need to fund more ePolicing, I don’t think that they are thinking about the problem in a sufficiently global context.

A little history lesson might be in order to explain why.

Back in 1930’s, Bonnie and Clyde and other US bank robbers were using the new-fangled automobile to flee across state lines — creating jurisdictional problems as a result. The US solution was to make bank robbery (along with auto-theft and other related offences) into federal offences rather keeping them as state-specific infractions. In particular this meant that the FBI could provide federal level policing (tracking down and killing John Dillinger for example).

We have the same jurisdictional issues dealing with cyberspace, with criminals in one country fleecing consumers in another while using systems hosted in a third. The Convention on Cybercrime addresses part of the problem by trying to ensure international consistency where eLaws are specifically needed (which of course is only the case for small parts of eCriminality, fraud is fraud whether eEnabled or not). However, there is limited inter-jurisdictional co-ordination for eCrime investigations — for example Interpol (often incorrectly perceived to be international police force) merely keeps a large database and passes faxes from one place to another.

In practice, most cross-border investigations are done as “joint operations” and the jointness is usually very limited — one force does all the legwork and a liaison officer in the other country deals with local paperwork. There’s usually a quid pro quo element to these joint operations, for budgeting reasons if no other.

What isn’t happening, or at least only in a handful of very specialised areas, is any international co-operation in setting priorities or selecting cases to pursue. Every country is doing its own thing about eCrime, and there’s a widespread impression that any criminal who can operate from “across the state line” is essentially immune from serious investigation.

We identified this problem last year when we (Ross Anderson, Rainer Böhme, Tyler Moore and myself) wrote a report on Security Economics and the Internal Market for ENISA. It’s not an easy one to fix whilst politicians (and populaces) are unwilling to see “foreign” police officers operating in their country, and the establishment of a truly international “cyber police force” seems equally unlikely.

Our policy proposal to tackle the issue harks back to WWII’s SHAEF, which has morphed into similar arrangements within NATO. In essence liaison officers from multiple forces would sit around a single table, working with a central coordinator, to set policy and decide which investigations to pursue. They would then communicate back to their own countries, who have specifically budgeted to provide appropriate assistance. So it’s very like “joint operations”, but the scheme is multi-laterial, and has a true command and control function in the centre — who will quickly learn to shy away from politically sensitive topics and make a real impact on eCriminality.

To summarise then, a welcome to the Home Office for finally finding a small amount of funding for some country-wide ePolicing; but it’s well past time to be working on world-wide initiatives.