SaaS is taking a bite out of the $18 billion IT management market. A new Forrester Research report forecasts SaaS-based IT management accounts will be 10% of the market by 2013. The reason: high level of interest from medium-sized and large enterprises. Forrester also predicts that enterprises with 1,000 or more employees will account for 50% of SaaS installations in 2009. We’ve seen this on the service desk side with the rapid growth of upstart Service-now.com. Companies are looking for easier and rapid deployment, lower upfront and capital costs and rapid time to value – all benefits of SaaS as well as our own appliance model.

IBM snapped up Transitive this week. Their QuickTransit software dynamically translates native code between architectures, enabling apps compiled for one processor to be run on another without any modification. Apple was the first licensee and used it to build Rosetta, a translation system that allowed users of Intel Macs to seamlessly run legacy PowerPC apps. IBM plans to use the technology to move workloads onto IBM systems without recompiling, allowing customers to “save on energy costs due to hardware consolidation and reduced TCO.”

At CA World, CA announced a partnership with Amazon to provide “management capabilities around Amazon’s EC2 utility computing platform, potentially including discovery of software running on EC2 instances, performance monitoring, configuration management, software deployment capabilities and provisioning”. John Willis, in spite of some pretty funny potshots and stories about CA (don’t we all have them), writes that “CA is the first of the Big Four to take the cloud serious”.

The analysts paired up today:
Antonio Piraino (Tier1 Research)
William Fellows (The 451 Group)

My usual disclaimers on live-blogging: doesn’t include everything covered (just what was most interesting to me) and had to paraphrase some answers because I simply cannot type that fast.

Quick definition of Cloud Computing
WF: The cloud is a continuum of grid, virtualization and utility done right. It is about provisioning services instead of servers; flexible computing instead of fixed assets. Done right, the cloud abstracts users from the complexity of grid. Cloud computing is IT as a service. Cloud computing is the Third Way – not entirely in-house or outsourced, but an optimized hybridized version of both. In light of the Goldman Sachs report out resetting IT spending forecast from up 6% to down 1%, don’t underestimate the ability for enterprises to move from capex to opex by buying cloud computing instead of building it themselves.

The 451 Group conducted a survey on cloud computing in March, and then revisited it a month ago. Some interesting results:

• 84% have no plans to develop an internal cloud. 5% had no answer to this question. And for the 10% who did answer – the uses for a private/internal cloud were the same as those for a public cloud.
• Top 6 vendors they look to help them develop an internal cloud: Microsoft, IBM, Cisco, HP, Oracle, VMware

Is it all “upside” when it comes to cloud computing?

WF: Watch out for the Trojan horse, the red flag. What about the software needed to manage all this stuff? Any management software needs to take a holistic approach to solve the problem.

AP: Increased management requirements and capability – this is actually a great story for managed hosters who can hold your hand while getting you up into the cloud. Hosters alleviate the pain points, and this is why we’re going to see continued growth and focus in the managed hosting sector.

WF: I would argue that they’re too expensive. Look at Amazon – 10 cents a hit adds up.

AP: It’s almost impossible to do an apples-to-apples comparison between cloud providers. One reason is that they charge differently. I’d say that when you’re talking about the big cloud providers, you are right – that they are expensive over the long-term, but for use in the short-term, they can be optimal.

WF: The cloud is setting big expectations. Can IT deliver? It’s nice to talk about “shared resources for the greater good” but in any organization, you will still run into issues of power and control! Plus it’s still early days for resolution of regulatory issues and compliance around the cloud.

Final Thoughts

AP: Think of the opportunities of using cloud computing resources in the areas of testing and pre-production – short-term use/environment (quick up/quick down), inexpensive, opex not capex. We’re already seeing the cloud fostering much innovation.

WF: “It’s okay to fall in love with the term.” It is real but keep the expectations lower and realistic.

AP: I agree with you. The reality is that the cloud is driving a very fundamental underlying platform change. This is not just a term or something that will fall out of fashion. There’s a real need to build trust in the cloud and leveraging shared resources in this way – so use the cloud computing term cautiously; don’t abuse it and make the cloud seem like IT’s new toy.

UPDATE:  @MYRCURIAL from the great site Liquidmatrix says that I need to post the following warning:

YOU MAY NOT WANT TO PROCESS THIS PRIOR TO YOUR 11TH CUP OF COFFEE

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

Carrying on from yesterday’s post a bit, I’m happy to admit that Chris’ poem is right: we don’t have nearly the information we need now when we’re supposed to have “control” over our assets, putting things in a hosted/asp/cloud/buzzword model ain’t going to help our quest for visibility. My intention was/is to show that you need visibility (in part one) and then today explain that unfortunately, that’s only half the picture.

Today’s follow-on is about the fact that whatever visibility we can contractually enforce (be it in the “cloud” or in our own perimeter) has to be informative (Amrit, this is why I was plugging you with those variance questions on Twitter yesterday).  That is, we can ask whatever IT department (ours, theirs, whomever) for all sorts of information, and maybe they’ll even give it to us.  But we’re not really ready to:

• Know what to ask for
• Use it to create wisdom

A really salient example of this from outside IT hit my browser this morning.  Now it’s not at all my intention to be political or endorse one candidate over another.  Those who know me know I’m fiercely independent.  But this morning there’s a headline on a well-read news website about how one candidate is now “+2″ over another in a Gallup poll of “likely voters”. The source is here.

That is a screen grab from Gallup’s website that shows the “+2″.   I have to ask - how informative is this information?  Part of the problem is that Gallup’s methods are hidden as some sort of “secret sauce” (their FAQ section doesn’t help much, either).  But regardless of the quality of the measurement, this “+2″ has no context - we don’t really know what this information means with regards to an actual election.  Nor is there any predictive element (I hate the using the word predictive, but it’s common nomenclature - so there you go).  We don’t have what we need from this Gallup poll to create wisdom about the ability of either candidate to be elected.

Allow me show you what I mean by way of contrast.  Take a look at Nate Silver’s work at http://www.fivethirtyeight.com/.  Now I’ve been long familiar with Nate due to his work in baseball.  He’s been at these sorts of ‘predictive’ analytics around our shared passion: creating wisdom from baseball statistics.

What Nate is doing at 538 is applying that acumen from his baseball work to the political process.  He’s breaking down the vote not just on popularity among likely voters, but in the context of the electoral college, accounting for variance and uncertainty, running Monte Carlo simulations and taking into account all sorts of polling information.  The result is really quite amazing. Here’s just one graph he presents - it’s the most similar to the Gallup one above, but you should really visit the site to understand the difference in quality of information and to check out the predictive elements he creates.

NOT ALL INFORMATION IS CREATED EQUAL, AND NOT ALL  JUDGMENTS ARE CREATED EQUALLY

And take a look at the contrast, here:

On one hand you have Gallup giving us a “+2″ advantage to a particular candidate.  Now Gallup themselves draws no conclusion but, as digested, how many readers do you think take this as evidence that the election is *really* close?

On the other hand, 538’s predictions show a 348/189 electoral college split, and one candidate winning 96% of the time in simulated elections.  That doesn’t seem close at all!

RISK MANAGEMENT

It is these predictive elements that we need in order to make better strategy and decisions.  I’ve been talking in the past about risk management’s inability to link current state to systemic causes, and this “context” is what predictive analytics provide.  We might have all sorts of visibility into our environment, and measurement of various amounts of variability that visibility gives us. But unless we have context to create wisdom, it’s all just, as Chris says, “machinations”.  We have to move beyond “+2″.

So Cloud/Grid/Utility/ASP/TimeShare/Whatever you want to call it - security will have to clean up our own mess first before we can do a good job with or without a perimeter.  Once we can start moving beyond “+2″ statements, then we can know what sort of visibility we require into an ability to Prevent, Detect, and Respond.

Lots being written about the Cloud, most of it quite dark and gloomy.  In fact I’m surprised, that Hoff hasn’t got a preso spooled up called “The Toxic Cloud” or something similarly ominous for his next speaking tour.
That said, the Economist does a great job distilling the issue into a simple statement -

Cloud computing is a trade-off between sovereignty and efficiency.

Let me ask you -  if you had to put your money on one of those horses, considering your average profit-preoccupied business, which would it be?  I’d put my bottom dollar on the thoroughbred named “Cost Center Reduction”, to place.

WHO ARE WE TO STAND IN THE WAY OF “PROGRESS”?

I’m always fond of Jack’s rule that the role of information risk management boils down to three deceptively simple premises:

• Reduce Risk.
• Reduce Loss.
• Create Operational Efficiencies.

So it would seem antithetical to the charter of the Chief Security Officer to stand in the way of progress as embodied by “cloud computing” (not to mention dangerous to long-term job security).  And I think that this presents opportunities to discuss strategies for managing risk, strategies that aren’t too theoretical and have practical application (though actual “cloud” use by enterprises may be rare at this point).

ON RISK REDUCTION IN THE CLOUD (or, How To Learn From the Shortcomings of PCI DSS)

The good news is, there’s already a well-established model for managing the risk around outsourcing the processing of “confidential” information.  The bad news is, that model kinda sucks it.

The Payment Card Industry, known as the “PCI” or “meal ticket” to many in the industry, faced a similar problem with the introduction of GLBA.  As I see it (and I’m not at all close to the PCI, at all, so this is all just abstract soliloquy) the PCI had one of two choices when faced with the prospect of other people managing their sensitive information:

1. Accept the *massive* amount of GLBA risk their business creates and spend a TON of money to build out the infrastructure (both process and IT) to manage the consumer data themselves (in conjunction with the banks, of course) and never have it grace the computing systems of the retailer.  Or,
2. Transfer the GLBA risk down to the retailer and have them bear the majority of the risk (and cost of reducing risk to a level that might be tolerable to the US Government).

(Martin, you may recall our Twittering about PCI a while back.  This is the crux of my view on the subj.)

Now fortunately, the CSO’s of the world are going to be a little more “invested” in protecting the information they are stewards over, and unlike the PCI, will remain primarily responsible for the C, I, & A of the data in the Cloud.  The cool thing is, this actually presents a great opportunity to start building a meaningful model for co-management of risk!  In fact, we can take the PCI model of contractual risk transference but modify where it goes all wrong, and start working to create something better.  And we can start by euthanizing some faulty assumptions.

JUST HOW INFORMATIVE IS PCI DSS?

What might be the.greatest.mistake of the standards compliance mentality is the assumption of value for the past-state measurement.  That is, I believe that the CSO needs more than some “past-state” assurance in order to understand their risk.    If you look at the concept of “PCI compliance” it really is an examination of a past state of nature that is assumed to be relevant to current and future states.   Many people (myself included) are not at all convinced that this past-state is nearly as informative as those who mandate it’s measurement believe it to be.

That’s not to condemn past-state measurements as completely non-informative,  they most certainly are useful.  It’s just that no self-respecting CSO sleeps well because they were deemed “PCI compliant” 10 months ago.  They sleep well because they have good visibility into current-state information and confidence in their strategy concerning future-state (based on that visibility and the outcomes of sound IRM models).

MOVING PAST THE VULNERABILITY SCANNER INTO INTELLIGENCE AND WISDOM

So realizing this new importance (to me, at least) concerning visibility and IRM models, I’m lead to the conclusion that if we are to manage risk in the Cloud, we’ll have to move beyond “PCI Compliance” or the concept that some regular “audit” of controls in place at the host is all we need to understand our ability to manage risk.  No, the CSO must have good information concerning current and probable future states.   This is that “visibility” I spoke of above.  In fact, we’ll need significant amounts of piercing, transparent visibility.  And in order to gain that visibility, our insight into Cloud Risk Management must include significant provisions for understanding a joint ability to Prevent/Detect/Respond as well as provisions for managing the risk that one of the participants won’t provide that visibility or ability via SLA’s and penalties . These SLA’s must be expressed in measurable terms (more visibility), and those metrics must have their roots in the things that help understand how we manage risk (those aforementioned IRM models).

THE CLOUD COMPUTING SECURITY SILVER LINING (sorry couldn’t resist)

As I mentioned earlier, I do see an opportunity to create insight.  The need for visibility and IRM models would allow us to create a “guidance” if you’ll allow me to use the term.  Not a standard or a “best practice” to audit by, but simply a reference document that says “if you’re going to put information on somebody else’s systems and still hold some significant responsibility for that information, here’s the considerations, why they are considerations, and how you might go about collaborating on the management of risk”.

And I think that if we undertake this journey, there is going to be a lot of growth and risk management innovation along the way.  But keen insights into what it means to manage risk will be necessary, and secure and forthright collaboration will be of absolute importance.

I say that last bit because, if these pundits are right about the utility of a hosted computing model - the Cloud will happen regardless of the CSO’s ability or desire to manage it.

On 13 August, jcorey asked about how to deal with those who firmly believe that the only answer to any security problem is to inspect everything at the edge. This is an important question, and I wanted to give Joe an answer. (You might have to scroll down when you click the previous link, it seems that linking to individual comments is broken.)

Today, 15 October, I wrote a little thesis as an answer to his question. I’m calling it out in a separate post because I want to make sure those of you with aggregators that don’t update when posts receive new comments still have a chance to reply with your thoughts. I’ll also repost it here:

jcorey-- You've nailed the biggest obstacle to deploying something like direct connect. Many security professionals have been taught that there simply is, and never will be, a process or technology that allows you to trust anything that originates from outside your corpnet. These professionals cling to this belief, and have been the cause that allowed the whole “detection” market to bloom.

Let me be clear: this total lack of trustworthiness is no longer absolutely true. Of course there will be times when unknown machines will be used by known and unknown people to access your information. But what about one particular subset -- known humans, with known portable computers -- can't we do something better than treat them as toxic invaders?

Indeed we can. And that's what I'm proposing with direct connect. The technology -- managed, of course, with the right processes -- exists so that you can extend the trust to known computers even though you don't trust the network they're connected to. This is because you have mechanisms that:

1. Allow you to configure the machine according to your requirements (domain join, group policy)

2. Dictate computer and user authentication requirements (IPsec policies, smart cards)

3. Limit what the users of these machines can do (UAC, non-admin, Forefront Client Security, Windows Firewall, even software restriction policies)

4. Validate the health of machines initiating incoming connections and remediate if necessary (NAP, System Center Configuration Manager)

5. Limit the threat of attacks against stolen computers (domain logon, smart cards, BitLocker with TPM)

With the robust authentication, validation, configuration, and control mechanisms available to you, I simply don't see that there's any need to fall back to “detection” now. Detection technologies were -- and remain -- necessary for the times when we have no clue about the health of client computers and when we had no way to gauge the intent of the users. But it is truly reflective of a head-in-the-sand mentality to assume that this is a complete description of what's capable today.

You know, someone once asked me what it takes to be a security professional. I answered that there are two primary elements: become a networking/packet wonk, and be willing to change your opinions when the right evidence comes along. Indeed, I suspect that many security folk have forgotten the need to keep their wonikness updated, which in turn makes them resist new ideas regardless of the strength of the evidence. I'm not very proud of what I just wrote, because I loathe generalities, but I'm not sure what else to think here. Sigh.

Joe’s question is important and strikes at the foundation of what it means to be a security professional today. I’m eager to continue this conversation, because it’s reflective of what I sense to be a radical shift in our jobs—we are, or should be, no longer the wolf-crying propeller-head who sits in the basement and twiddles with the firewall. Instead, our job should be defined as one who’s charged with protecting the organization’s information from attack, while maximizing its utility to authorized users, according to the principles of least privilege. Your thoughts?

What’s going on?

“Rubico”, as the hacker called himself, used an automated password recovery tool where he was asked fairly simple questions to identify himself as Gov. Palin [birthday, zip code, etc.]. Rubico found answers to these within 45 minutes on Google and Wikipedia! Wow! Is it really that easy to hack into email or messaging services that the common person uses globally?...]]> Mon, 29 Sep 2008 20:00:00 +0000 email palin free email mccain-palin campaign questions fairly simple questions email account breach gov palin birthday Gov. Palin, Yahoo! Email and SecurityA Call To Action? http://securityratty.com/article/e6b5db3dba618f48e7fa728ff2173006 http://securityratty.com/article/e6b5db3dba618f48e7fa728ff2173006 As General Manager of Worldwide Hosting, John Zanni is a key guy for every Managed Service Provider delivering Microsoft based solutions. At this year’s Hosting Transformation Summit, John gave a keynote titled: “Leadership Perspective: Cloud Computing – is Virtualization Enough?”

John talked about Microsoft’s mission, his perspectives on key industry trends and market opportunity; he touched on Cloud Computing and Virtualization and took some Q&A from the audience of Managed Service Provider executives.

One of his first proclamations - Microsoft has really embraced the heterogeneous environment. Really? How in the world is Microsoft going to help convince IT line managers, or mid level managers to believe this statement? I think they have a long way to go to achieve this vision with any credibility in the marketplace.  I do know that they are making small strides.

Microsoft has been widely credited with some very good blogs that are self critical and introspective. They have also been quite active in the standards boards within DMTF and many others such as Open WSMAN and CIMON (Open Pegasus). Microsoft in February published 30,000 pages detailed technical specifications – protocol documentation for Exchange, since that time they have published another 15,000 pages. They have had over 224,000 downloads since February 21, 2008. Thus they are trying to be more open by making some of these secret sauce protocol resources directly available on the web.

So for now, I will take a very cautious wait and see approach to this proclamation. Time will tell.

Trends

• Rapid growth continues
• Hosting Competition has a new face
  • Platform gorillas (amazooglesoft)
  • Ad supported Web 2.0 hosters (Google, Facebook,)
• Utility Cloud Computing models are expanding to non-traditional hosting companies
  • Wells Fargo vSafe - hard to believe that a big bank would start to offer a SaaS offering
  • New tools and markets digital ribbon, CohesiveIT

IDC Data shows that growth of SaaS ISV’s is the biggest layer of growth. The fastest growing services are complex, custom applications. IDC says this area will be bigger than the hosting area in the next 5 years. John said that Microsoft is spending a lot of time, money and energy on this right now.

John said:

“when Microsoft thinks about the building blocks that make-up the cloud, virtualization is a core piece of the puzzle. However you also need also identity services, Operating system with standard set of libraries to tap into… or remote storage that application developers will tap into.. Developers will consume these set of services, but you will also need a set of tools to manage your physical, virtual and geographically distributed datacenter infrastructure.” (that is where ScienceLogic comes in!!)

He went on to say,

“In some ways, virtualization enables decentralization – allows you to move from data centers, enables fast scaling out, business to move from on premise to the cloud and off again…. Automation is very important – this will help you scale your business – this is core to your future success.”

He talked about a new breed of knowledge worker: He called them Digital Natives (compared to grey haired guys like me who are left out of this category).

Definition of a Digital natives? A young adult who has grown up with cellphone, web based applications, Facebook account, as their primary mode of communications.

John commented that we are 5 years into a 10 year journey. Only 12% of all servers in the world are virtualized today… in the next 4 years it will double to 25%. This is the time to think through how this business will affect you.

‘Virtualization without good management is more dangerous than not using virtualization in the first place.” Thomas Bittman, Analyst Gartner

Patching and provisioning nightmare – no scalable administration – sprawl chaos.

John posed a question to the audience: How do you partner to provide the ISV support in application development with specific market needs… partner by keeping the hosting to SaaS solution providers up and running and provide the quality of service that their customers expect…. Complimentary services of storage and backup is a big win with a huge market-upside over the next 5 years..

John said that Microsoft continues to make  huge investments with Managed Service Providers.

• Investing in the windows hosting platform
• Hyper V and SQL2008 GoLive program - getting beta code out to service provides to find as many bugs as early as possible.
• Software + Services (S+S) incubation center program
• Partnering for cloud platform market offers
• Cloud platform guidance and best practices

During the Q&A, David Burns from Cincinnati Bell asked the very best question… “when are you going to make it easier for the Service Provider market to deal with the Microsoft Service Provider Licensing Agreement (SPLA) quarterly statistics pull and change the SPLA pricing to be more efficient and creative for the new Virtualization and Cloud offerings you have talked about?”

John’s response: “We hear your frustrations loud and clear and are working on some new ideas for the future version of SPLA.” My interpretation – “Dear Service Providers don’t expect anything new or easier to deal with in the next 6 months!”

His closing remarks: “Cloud is evolving = very early stages, lots of hype, but think of how this evolution will effect your business and how you can plug into it.”

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.