So, here is my next monthly "Security Warrior" blog round-up of top 5 popular posts and topics.

1. Shockingly, AGAIN this month, the "Top 11 Reasons to Secure and Protect Your Logs" came up as #1 most popular post (maybe driven by my poll).  BTW, see my other logging polls.
2. Security ROI - and its parent topic "security metrics"/"measuring security" - is definitely an ongoing HOT debate. Indeed, the old post "Security ROI Pile-Up!" takes the #2 spot this month, possibly propelled by a more recent post "Second ROI War."
3. Some say that "short blog posts rule", but, in reality, good, fun content is the best. Here is an example:  "Dumb Luck IS a Strategy!" post makes the top list. In it, I try to explore why people still ignore security concerns even if stare people in the face...
4. Discussion on what you can do to soften the impact of "getting 0wned" ( "What CAN You Do?") made the top list. Good!
5. As before, my post "11 Signs That Your SIEM Is A Dog or "Raffy, You Killed SIM!"". It is both humorous and sadly true (and backed up by other sources)
6. Still burning hot is a post with my irreverent comments on a Terry Childs saga. Namely, "On Doomsaying (Terry Childs case)", "So ... Am I? Maybe I Am!" and "Admins , Good Guys or "I am NOT an Idiot!""

See you in October.

Possibly related posts / past monthly popular blog round-ups:

• Monthly Blog Round-Up - August 2008
• Monthly Blog Round-Up - July 2008
• Monthly Blog Round-Up - June 2008
• Monthly Blog Round-Up - May 2008  
• Monthly Blog Round-Up - April 2008  
• Monthly Blog Round-Up - March 2008  
• Monthly Blog Round-Up - February 2008  
• Monthly Blog Round-Up - January 2008  
• Monthly Blog Round-Up - December 2007  
• Monthly Blog Round-Up - November 2007  
• Monthly Blog Round-Up - October 2007  
• Monthly Blog Round-Up - September 2007
• Monthly Blog Round-Up - August 2007

When I walked up on stage and accepted the Inc 500 award, it hit me square in the face that this is a rare accomplishment, and even more difficult for a product company that started without the benefit of VC funding.

Dave with wife, Anne, at the awards ceremony
Over the 2 day period, I heard from some great speakers with entrepreneurial passion, many who never had accomplished making the list. It is so highly competitive and just plain hard to do.

I loved hearing some of the speeches during the conference and getting to know other entrepreneurs that attended the conference talk about how they created their niche and ultimately built a successful company from a good idea.

Because I enjoyed hearing some of what I like to call “golden nuggets of wisdom” so much, I thought in my conference wrap-up I would pass on a few to our blog readers:

Tom Peters – Author In Search of Excellence and The New World of WOW

“Only 7% of our great nation works for Fortune 500 companies. Small businesses and the entrepreneurs are the jet fuel that makes our country fly.”

“Brand is shorthand for a collection of experiences, memories of what it will be like the next time a customer deals with you. With the advent of blogs and consumer activism, Brand is impossible to fake; it is like the temperature in the room… it is there… it exists.”

Chester Elton – SVP Carrot Culture Group

“At the casino – they train the heck out of the Valet! Why do they spend 3 months on Valet training? Because he is the first and the last person to greet and interact with a visitor during their trip! Who is your company Valet?”

Paul Bennett – Chief Creative officer IDEO – speaking on — Creating a culture of optimism:

“You need to ditch B-B and B-C Need to become P-P Person to Person.”

“You don’t buy loyalty… you earn it… this is an interesting challenge, but small allows us to behave like human beings… Going off script and doing something human is a great place to start.”

“Stop obsessing about ROI and start obsessing about ROC! Return on Customer/Consumer is much more powerful than ROI!!!!”

“Happy people, unabashedly doing, happy things, makes for happy companies, which create happy businesses which enable happy cultures… IN WHICH THRIVE”

Marilyn Carlson Nelson – Chairman and CEO Carlson Companies – A family owned $40 Billion empire including TGI Fridays, Radisson Hotels…

“My leadership was tested terribly - after 9/11 the travel industry was particularly harmed. It was an extraordinary time for Carlson. “

“Put tactics around these strategic initiatives”

• Whomever you serve, serve with caring
• Whenever you dream – dream with your all
• Wherever you go, go as a leader
• And never, never give up
• Whatever you do – do it with integrity

“That builds trust, trust builds relationships and relationships build results.”

=============================================

Actually, I took about 40 pages of notes throughout the two days… So I can’t say that this will be my last summary post on the Inc 500/5000 conference, but I can say that the conference did leave a strong impression about how I can help shape the future of ScienceLogic in an even more positive way.

• Moderator: Nick Hoover, Senior Editor, InformationWeek
• Speaker - Anne Berkowitch, Co-Founder & CEO, SelectMinds
• Speaker - J.B. Holston, CEO and President, NewsGator
• Speaker - Umberto Milletti, CEO, InsideView

Businesses can take advantage of social networks by finding innovative ways to reach out to people. Looking at who you know and how you know them can benefit you. Knowing a personal connection to someone that you are trying to contact (for sales) is helpful. The blurring between home, personal, and business life is making this information more available and better able to leverage. People are able to capture more valuable long term information from social networks.

A lot of social network applications can be taken from the talent management space. Deploying alumni networks as a talent source is also a great asset. Alumni represent a well-known and relevant population. This provides a great economic benefit from a social network.

If you are running a sales organization and looking at building a pipeline of leads, consider how these leads are relevant. The ability to get more leads is apparent in finding the right person, right connection, and right contact. Underlying everything are productivity and efficiency. How much time are sales reps spending researching and pursuing each opportunity? With information on social networks, the time can be greatly decreased. Knowledge sharing is something that can be actively measured.

The ROI varies with the business issue that’s trying to be addressed by a particular network. Recruiting for example has a very concrete, measurable ROI. Knowledge share gets a little more tricky. How do you measure how much is shared and the impact on business systems? Businesses need to determine what specific goal they are trying to address.

CFOs want to see ROI, not intuitive information. If you can demonstrate engagement and participation in these networks and knowledge sharing tools, more and more executives are getting comfortable seeing how it’s used at a qualitative and process level. It’s a very case by case basis.

One major crisis that we see in our customers is the competition between sales and marketing. Each wants to do their own thing, they go together like oil and water. However, the push of the economy is now forcing them work together. This is a great opportunity for IT to step in and help them collaborate and be more productive.

Other resistance from companies are how to manage what they are trying to accomplish while still giving employees free reign of sites like Facebook. What are the incentives for using these technologies? How does it fit into your company culture and productivity scale? You must bring meaning to the structure of engaging in social networks.

Social networks like LinkedIn and Facebook would not exist if people did not contribute information to them. However, if people don’t know that it is there, it does not exist. People need to see the value and get drawn in to engage. There are two ways that companies get into social networks. Tie it into the business process. The general idea of social networks are intuitive and easy to understand, which make it an easier case to present to chief executives. Make it clear - how do you go about it and what’s the value?

Social networks are intrinsically about extending the network, the more contacts you have, the more to choose from when researching a specific contact. It also has to be integrated into your dataworkflow. Companies are going to build a variety of networks inside and outside the enterprise. The big companies (SAP, IBM) are all rushing to offer collaborative and social network functionality. However, this is not entirely useful unless it’s integrated into the entire infrastructure.

• "Schneier on Security ROI": "It's a good idea in theory, but it's mostly bunk in practice." and "The term just doesn't make sense in this context."
• Richards adds to it: "Schneier Agrees: Security ROI is "Mostly Bunk""
• "Security ROI - The debate continues": "ROI  ... reared its ugly head."
• "FOI, Failure of Investment":  "Not that you asked, but IMHO: ROI and TCO are SWAG at best. And, they are rarely at their best." The secret weapon of ROI war - FOI -  is thus unleashed!
• This is also very relevant :-)

Overall, I love it when educated peoples' debate just falls waaaay down to the level of "I won't care what YOU call it as long as you don't care what I call it...." Yuck! :-)

All security ROI coverage is tagged here: http://delicious.com/anton18/ROI. The previous, "First ROI War", is summarized here.

It's become a big deal in IT security, too. Many corporate customers are demanding ROI models to demonstrate that a particular security investment pays off. And in response, vendors are providing ROI models that demonstrate how their particular security solution provides the best return on investment.

It's a good idea in theory, but it's mostly bunk in practice.

Before I get into the details, there's one point I have to make. "ROI" as used in a security context is inaccurate. Security is not an investment that provides a return, like a new factory or a financial instrument. It's an expense that, hopefully, pays for itself in cost savings. Security is about loss prevention, not about earnings. The term just doesn't make sense in this context.

But as anyone who has lived through a company's vicious end-of-year budget-slashing exercises knows, when you're trying to make your numbers, cutting costs is the same as increasing revenues. So while security can't produce ROI, loss prevention most certainly affects a company's bottom line.

And a company should implement only security countermeasures that affect its bottom line positively. It shouldn't spend more on a security problem than the problem is worth. Conversely, it shouldn't ignore problems that are costing it money when there are cheaper mitigation alternatives. A smart company needs to approach security as it would any other business decision: costs versus benefits.

The classic methodology is called annualized loss expectancy (ALE), and it's straightforward. Calculate the cost of a security incident in both tangibles like time and money, and intangibles like reputation and competitive advantage. Multiply that by the chance the incident will occur in a year. That tells you how much you should spend to mitigate the risk. So, for example, if your store has a 10 percent chance of getting robbed and the cost of being robbed is $10,000, then you should spend $1,000 a year on security. Spend more than that, and you're wasting money. Spend less than that, and you're also wasting money.

Of course, that $1,000 has to reduce the chance of being robbed to zero in order to be cost-effective. If a security measure cuts the chance of robbery by 40 percent -- to 6 percent a year -- then you should spend no more than $400 on it. If another security measure reduces it by 80 percent, it's worth $800. And if two security measures both reduce the chance of being robbed by 50 percent and one costs $300 and the other $700, the first one is worth it and the second isn't.

The Data Imperative

The key to making this work is good data; the term of art is "actuarial tail." If you're doing an ALE analysis of a security camera at a convenience store, you need to know the crime rate in the store's neighborhood and maybe have some idea of how much cameras improve the odds of convincing criminals to rob another store instead. You need to know how much a robbery costs: in merchandise, in time and annoyance, in lost sales due to spooked patrons, in employee morale. You need to know how much not having the cameras costs in terms of employee morale; maybe you're having trouble hiring salespeople to work the night shift. With all that data, you can figure out if the cost of the camera is cheaper than the loss of revenue if you close the store at night -- assuming that the closed store won't get robbed as well. And then you can decide whether to install one.

Cybersecurity is considerably harder, because there just isn't enough good data. There aren't good crime rates for cyberspace, and we have a lot less data about how individual security countermeasures -- or specific configurations of countermeasures -- mitigate those risks. We don't even have data on incident costs.

One problem is that the threat moves too quickly. The characteristics of the things we're trying to prevent change so quickly that we can't accumulate data fast enough. By the time we get some data, there's a new threat model for which we don't have enough data. So we can't create ALE models.

But there's another problem, and it's that the math quickly falls apart when it comes to rare and expensive events. Imagine you calculate the cost -- reputational costs, loss of customers, etc. -- of having your company's name in the newspaper after an embarrassing cybersecurity event to be $20 million. Also assume that the odds are 1 in 10,000 of that happening in any one year. ALE says you should spend no more than $2,000 mitigating that risk.

So far, so good. But maybe your CFO thinks an incident would cost only $10 million. You can't argue, since we're just estimating. But he just cut your security budget in half. A vendor trying to sell you a product finds a Web analysis claiming that the odds of this happening are actually 1 in 1,000. Accept this new number, and suddenly a product costing 10 times as much is still a good investment.

It gets worse when you deal with even more rare and expensive events. Imagine you're in charge of terrorism mitigation at a chlorine plant. What's the cost to your company, in money and reputation, of a large and very deadly explosion? $100 million? $1 billion? $10 billion? And the odds: 1 in a hundred thousand, 1 in a million, 1 in 10 million? Depending on how you answer those two questions -- and any answer is really just a guess -- you can justify spending anywhere from $10 to $100,000 annually to mitigate that risk.

Or take another example: airport security. Assume that all the new airport security measures increase the waiting time at airports by -- and I'm making this up -- 30 minutes per passenger. There were 760 million passenger boardings in the United States in 2007. This means that the extra waiting time at airports has cost us a collective 43,000 years of extra waiting time. Assume a 70-year life expectancy, and the increased waiting time has "killed" 620 people per year -- 930 if you calculate the numbers based on 16 hours of awake time per day. So the question is: If we did away with increased airport security, would the result be more people dead from terrorism or fewer?

Caveat Emptor

This kind of thing is why most ROI models you get from security vendors are nonsense. Of course their model demonstrates that their product or service makes financial sense: They've jiggered the numbers so that they do.

This doesn't mean that ALE is useless, but it does mean you should 1) mistrust any analyses that come from people with an agenda and 2) use any results as a general guideline only. So when you get an ROI model from your vendor, take its framework and plug in your own numbers. Don't even show the vendor your improvements; it won't consider any changes that make its product or service less cost-effective to be an "improvement." And use those results as a general guide, along with risk management and compliance analyses, when you're deciding what security products and services to buy.

This essay previously appeared in CSO Magazine.