The Defense Department's geeks are spooked by a rapidly spreading worm crawling across their networks. So they've suspended the use of so-called thumb drives, CDs, flash media cards, and all other removable data storage devices from their nets, to try to keep the worm from multiplying any further.

The ban comes from the commander of U.S. Strategic Command, according to an internal Army e-mail. It applies to both the secret SIPR and unclassified NIPR nets. The suspension, which includes everything from external hard drives to "floppy disks," is supposed to take effect "immediately." Similar notices went out to the other military services.

In some organizations, the ban would be only a minor inconvenience. But the military relies heavily on such drives to store information. Bandwidth is often scarce out in the field. Networks are often considered unreliable. Takeaway storage is used constantly as a substitute.

IDG News has published a news report titled, “Researchers find vulnerability in Windows Vista“. The report says:

An Austrian security vendor has found a vulnerability in Windows Vista that it says could possibly allow an attacker to run unauthorized code on a PC.

The problem is rooted in the Device IO Control, which handles internal device communication. Researchers at Phion have found two different ways to cause a buffer overflow that could corrupt the memory of the operating system’s kernel.

In one of the scenarios, a person would already have to have administrative rights to the PC. In general, vulnerabilities that require that level of access somewhat undermine the risk since the attacker already has permission to use to the PC.

Somewhat undermine the risk? If you need admin rights to exercise a bug it is not a security issue since you could already run any code with whatever privilege you wanted. Microsoft is not issuing a patch, but creating a bug fix in a service pack, yet this is newsworthy? This story has no comment from anyone but the finder of the bug. Let’s see if other news outlets pick up on this one.

The next question from the president-elect was what single policy issue he could focus on that would most help entrepreneurs.

“The most important thing he’s got to do is kick-start a huge amount of research and innovation in energy,” said Mr. Doerr, who backed Google and Amazon.com and has invested heavily in clean energy technology for the last few years.

The nation now invests less than $1 billion a year in renewable energy versus $32 billion a year in health care, Mr. Doerr said. “I think we’ve just scratched the surface in terms of clean ways to use energy, to produce energy. It’s the challenge of our generation.”

How to do that? Double the number of engineers who graduate from American universities each year to 60,000, Mr. Doerr said. Bring more women into the field, and encourage foreigners who study engineering here to stay here.

“What we do is bring foreign nationals to the world’s greatest universities. We train them, invest in them and make them go home,” he said. “What kind of national strategy is that? So I would staple a green card to the diploma.”

In the paper, we propose a simple solution: take-down companies should share their raw, unverified feeds of phishing URLs with their competitors. Each company can examine the raw feed, pick out the websites impersonating their clients, and focus on removing these sites.

Since we presented our findings to the Anti-Phishing Working Group eCrime Researchers Summit, we have received considerable feedback from take-down companies. Take-down companies attending the APWG meeting understood that sharing would help speed up response times, but expressed reservations at sharing their feeds unless they were duly compensated. Eric Olsen of Cyveillance (another company offering take-down services) has written a comprehensive rebuttal of our recommendations. He argues that competition between take-down companies drives investment in efforts to detect more websites. Mandated sharing of phishing URL feeds, in his view, would undermine these detection efforts and cause take-down companies such as Cyveillance to exit the business.

I do have some sympathy for the objections raised by the take-down companies. As we state in the paper, free-riding (where one company relies on another to invest in detection so they don’t have to) is a concern for any sharing regime. Academic research studying other areas of information security (e.g., here and here), however, has shown that free-riding is unlikely to be so rampant as to drive all the best take-down companies out of offering service, as Mr. Olsen suggests.

While we can quibble over the extent of the threat from free free-riding, it should not detract from the conclusions we draw over the need for greater sharing. In our view, it would be unwise and irresponsible to accept the current status quo of keeping phishing URL feeds completely private. After all, competition without sharing has approximately doubled the lifetimes of phishing websites! The solution, then, is to devise a sharing mechanism that gives take-down companies the incentive to keep detecting more phishing URLs.

Here is our stab at devising a suitable sharing mechanism. We propose the creation of a members-only sharing club with compensation for net contributors paid for by net receivers. Take-down companies submit real-time copies of their entire feeds to a trusted third party (for the sake of argument, let’s assume that the APWG takes on this role). The APWG collates the individual feeds, marks the source of each submission (i.e., which take-down company) along with a timestamp. The APWG makes the amalgamated feed available immediately to all members. The members pick out phishing URLs impersonating their own clients, while ignoring the rest. Crucially, the expensive task of verifying phishing URLs and initiating take-down continues to be performed by the take-down company.

Periodically, the combined feed is audited to determine the reciprocity of contributions. Take-down companies provide a list of their clients to the auditor. The auditor then computes the number of phishing websites impersonating each take-down company’s clients that are missed by the takedown company but identified by others. The auditor also tallies the time difference for phishing websites that are identified by others first.

For example, suppose bank A1 has hired take-down company A to remove phishing sites on its behalf, and bank B1 has hired take-down company B. Suppose 500 phishing sites impersonate A1, and that A identifies 400 while B identifies an additional 100 sites missed by A. Likewise, suppose another 500 phishing sites impersonate bank B1, and that B identifies 300 while A identifies an additional 200 sites missed by B. B has received a net of 100 useful phishing sites more from A than B has given to A. Consequently, B should pay A a previously-agreed ‘finder’s fee’ for identifying these extra 100 websites.

The ‘finder’s fee’ provides additional incentive for take-down companies to invest in better phishing website detection. Designed properly, such a sharing club can overcome the potential for free-riding that companies such as Cyveillance fret about, while increasing sharing to shorten phishing website lifetimes.

Some subtleties must be mentioned, however. If the finder’s fee is big enough, some companies may be tempted to cheat to minimize their payout. For instance, underperforming take-down companies could claim to have independently discovered missing data from their feed shortly after collecting it from the shared feed. This can be mitigated by adding a credible threat of detection — inserting a few dubious fake phishing URLs that only appear in the shared feed. If the company claims to have ‘independently’ rediscovered these URLs, then they will be caught cheating. Another issue is that the auditing system does incur some overhead, which could be avoided if sharing was made unconditional.

To sum up, we recognize that many take-down companies will be reticent to share. However, we feel that sharing is too important to the goal of tackling phishing to brush aside because of a few inevitable complications. For the good of protecting consumers, the anti-phishing industry should learn to co-operate!

“Developed economics, especially in the United States and Western Europe, will be the worst affected, but emerging regions will not be immune,” said Peter Sondergaard, the global head of research at Gartner. “Europe will experience negative growth in 2009, the United States and Japan will be flat.”

Forrester is more optimistic (so far). Back in September, the analyst firm revised their prediction downward to an increase of 6.1% instead of the original 9.4%.

But both firms agree that the first IT purchases to feel the cut are in hardware – PCs, servers, storage devices, communications equipment, etc. Next up, software purchases and IT servers.

So are MSPs immune to the economic slow down? With expected layoffs and certainly hiring freezes across the board, turning to MSPs to pick up part of the load is starting to look better and better. At the recent MSP Alliance conference in Chicago, attending MSPs had a rosy view about growth in their industry, with sales cycles actually shortening from 6-12 months down to 2-6 months and 25% of them actually increasing prices in the past six months. It’s a good time to be a MSP.

Without replacing these poles, the city would be unable to use the municipal services from which it still plans to save $3.5m over the 10-year contract life, and thus it would be pennywise and pound foolish to leave the status quo.

Dan described the Managed Hosting and colocation sector as “on fire” The sector is humming – incredible growth, outstanding execution, blowing away expectations. I must say, looking back 5 years ago after the tech bubble collapse, I can’t believe how strong the sector bounced back from those very difficult times.

His presentation was focused on a future, and a longer view for the industry. The HTS conference is packed this year with the largest attendance of Datacenter owners, Managed hosting and colocation companies ever to attend this conference.

• Demand steady or increasing in all markets, driven largely by capex constraints and greater awareness and choices.
• Supply is growing more slowly in the past 18 months as the credit crunch has hurt the ability of providers to expand ( it is very hard to get mortgages, loans only on new datacenter projects). Expansion build-out of existing shells is occurring, but very little on spec.
• Demand Growth of 15% in 2008. (Steady and increasing in the out years) However after supply growth peaked at 7.5% in 2007 supply growth now has slowed to 5%
• Dan believes that supply growth will pick back up again in 2011

Conclusions – supply is tight, demand is high and growing…this very good news for the industry.

• Some other trends:
  • The green initiatives are more than just a trend as datacenter owners who don’t figure out how to maximize power efficiency will be painted as villains.
  • Internet traffic and services consumption are linked as Internet traffic growth has been doubling every year (2005-2007)
  • Prediction: 2011 -2012 - internet traffic will get an exaflood – it is coming with a new breed of applications (set to boxes HD Video, games, etc.) that will drive new traffic patterns. Growth driven by consumer broadband + applications (HD video) applications, which in turn will drive demand for Managed Hosting / Colocation Services…

Managed Hosting Services Highlights

• Incredibly fast growth 30%+
• $10 Billion worldwide revenue by end of 2008
• We’ll keep growth pace until at least 2011
• Good news, Dan believes that fears about slowdown in growth are wildly overblown.

Why is managed hosting growing so fast?

• Demographic shifts – new breed of IT employees that embrace outsourcing
• Growth in internet applications (SaaS) The acceptance and growth of browser based applications has been enormous!
• Ambiguity between web hosting and managed hosting has turned positive

Dan’s Key success factors managed hosting and services

• High margin services – and not too many – it is so tempting in our day to day business when a customer comes along and wants to come and give us money for a unique on-off service… at this point the answer has to be no – or do it through a partner.
• High level of support delivery is critical – don’t cut pay in support people or outsource support to save a nickel… what you are selling is support. Keep doing this well or you will head into a bad place… just as examples in retail like Home Depot and others who have struggled with customer service challenges – the whole business starts to slide into the toilet… High levels of support delivers a strong word of mouth buying cycle

Final thoughts, the industry is healthy and will continue to thrive. Customers are looking for the one stop shop, one company that is a trusted advisor to the customer. As customers place more eggs in the Managed Service bucket, the industry will need to tighten-up those SLA’s. Today some parts of the industry have been getting away with loose SLA’s… as customers get more sophisticated and have more on the line, they will become more demanding and require robust multi-component SLAs and back-it –up.