Security Threats Won't Let Up

Four out of five businesses were hit by a virus or worm in 2003, according to a survey of 404 security decision makers by the Yankee Group. Denial-of-service attacks were the second-most-common security incident, hitting about 40% of those surveyed.

The problem will get worse and continue to eat up substantial amounts of companies' IT budgets. More than half of those surveyed by the Yankee Group expect their security budgets to increase during the next three years, while only 8% expect security spending to decline. Some of that money will be used to patch security holes in desktop software. Patching a desktop can cost from $189 to $264, the survey says.

Security analysts and vendors predict that 2004 will bring thousands of new viruses and worms and a huge increase in the use of spyware. They also say that spammers will increasingly adopt tools used by virus writers, adding to the volume of spam and the problems it causes for corporate networks. In addition, few security experts expect to see anything close to a letup in the 50 or more security-related software vulnerabilities discovered each week.

Spyware ranges from software that collects information on a user's Web-surfing habits (called adware) to more insidious applications that hackers use to collect every keystroke--passwords, credit-card numbers, financial data, and other personal information--that a user types. Often, adware is installed when users download freeware or shareware from the Internet but don't bother to read the license agreement that states the snooping software is being installed. The more dangerous kinds of spyware can be clandestinely inserted into a victim's system.

Even the most security-conscious businesses can find themselves at risk if, for example, a mobile user's notebook is infected with spyware and then the user logs on to the corporate network. "The issue gets serious when it comes to telecommuters using home PCs, which may not have antivirus and firewalls installed," says Scott Blake, VP of information security at security firm BindView Corp. "The corporation has no control over what software they install on their home PC."

The bad guys are getting very sneaky, says John Pescatore, VP and research fellow at Gartner. Increasingly, employees may log on to their corporate networks from a coffee shop or a hotel room and see a screen pop up that appears to be a legitimate message from the hotel or coffee shop they're patronizing. But it's not. It's a fake message designed to get users to download a malicious Trojan or spyware application. "Is it spyware or just a pop-up ad? How will you know?" Pescatore asks. "This technique of collecting financial information, passwords, and being part of identity theft is going to be a growing problem. We're going to see more real spyware attacks."

It's already under way. In July, one person pleaded guilty in federal court to installing key-logging software at several Kinko's Inc. locations in Manhattan. For more than a year, he collected the keystrokes of the customers of the printing and copying chain, including passwords and user names, and used that data to fraudulently open bank accounts. A Boston College student was caught using a similar application to steal student passwords and other information from more than 100 PCs at the campus. The number of tools available to combat spyware is growing, and they're getting more effective. They're offered by software vendors that specialize in standalone spyware-removal apps, such as offerings from PestPatrol Inc. and Webroot Software Inc., which have apps to scan and remove spyware. And antivirus vendors such as Symantec Corp. and Network Associates Inc. have begun adding spyware-detection and -removal software to their antivirus apps.

Spyware also is attracting the attention of politicians. Lawmakers are expected this year to introduce a new version of the Safeguard Against Privacy Invasions Act, a bill to prohibit spyware. Reps. Mary Bono, R-Calif., and Edolphus Towns, D-N.Y., have been working with privacy-rights groups and the IT industry to refine the bill. One of the primary goals of the act is to direct the Federal Trade Commission to prohibit the installation of spyware on computers used by financial institutions or the federal government, unless the user first agrees to the snooping.

Another trend that experts expect to see this year is more spammers making use of virus-writing tools and techniques. Spammers are using the tools of virus writers to anonymously send their ads. Vincent Weafer, senior director of development at Symantec, says spammers will continue to use viruses and Trojan horses to infect computers so they can then use those machines to anonymously send out waves of E-mail. "They're now turning to home-user and small-business systems," Weafer says. "They're hijacking tens of thousands of vulnerable systems and turning them into anonymous spam mailers."

More than 65% of the spam messages intercepted by E-mail security firm MessageLabs, which filters spam and viruses for companies, are sent from PCs that have been hijacked by spammers and transformed into spam relays, the company reports. This trend came to light with the Sobig.F virus. At the peak, MessageLabs says one in every 17 E-mails it intercepted contained a copy of the Sobig.F virus. By Dec. 1, it had stopped more than 32 million E-mails infected with the virus.

Many security experts believe the writer or writers behind the Sobig.F virus were actually spammers or working with spammers, looking to use that virus to infect thousands of machines that could then be used to anonymously blast millions of spam messages. The technique keeps spammers' identities secret and can also sidestep black lists used by Spam filters. Sobig.F's success will likely lead to similar outbreaks.

Another relatively new and growing danger: peer-to-peer networks and instant messaging. Expect virus writers and snoops to start exploiting the popularity of peer-to-peer networks, such as Grokster, Kazaa, and Morpheus, and instant-messaging services offered by America Online and others.

Any company with employees using peer-to-peer file-sharing networks is inviting trouble. Consider the following experiment conducted by Bruce Hughes, director of malicious-code research at TruSecure Corp.'s ICSA Labs. He set up a crawler program on Kazaa and other peer-to-peer networks, scanning for popular file types using keywords such as sex and antivirus. Hughes says 45% of the files he downloaded contained malicious applications. "If you're downloading files from these networks, you're going to get infected with something," he warns.

Almost all the big attacks last year were aimed at Microsoft PC and server software. This year, new threats will appear aimed at emerging operating systems and devices, such as Linux, handheld devices, and smart cell phones. "We'll see a cell-phone virus. It's almost a certainty," says David Perry, global director of education for antivirus and content security firm Trend Micro Inc. "We'll also probably see a virus designed to spread over wireless LANs. We just don't know when; it could be this year or it could be five years."

Linux is more susceptible to attack because it offers increased functionality and more users are using a graphical interface such as Lindows, which makes Linux easier to run, says TruSecure's Hughes.

Still, most experts agree that Microsoft will remain the target of choice for worm and virus writers, at least for the short term, because of its market dominance. Microsoft and other software vendors have been devoting much time and effort to reducing the number of flaws in their code. But that won't eliminate the software vulnerabilities that make it easier for hackers and virus writers to attack. CERT says that more than 4,000 software vulnerabilities were reported in 2002 and nearly 3,000 were reported in the first three quarters of 2003. Security experts expect that reported software vulnerabilities will continue to number between 50 and 60 each week.

The real issue isn't the number of vulnerabilities reported, but the severity of the security flaws. The vulnerabilities discovered last year and expected this year are increasing in severity, says Symantec's Weafer, who expects that trend to continue. About 80% of all software vulnerabilities are "remotely exploitable," which means virus and worm writers can write malicious apps that can attack these flaws from anywhere, he says.

Security analysts are less concerned about so-called zero-day worms that have gotten a lot of publicity recently. A zero-day worm is one that starts attacking before the software flaw it takes advantage of is publicly known or before a patch is available. "It takes a lot of skills to discover software vulnerabilities and to write worms that will spread effectively," says Dan Ingevaldson, engineering manager for X-Force, a research group at security firm Internet Security Systems Inc. "It's very rare to find those two skills in one person."

Yet worm and virus writers are getting faster, which means companies have less time to prepare once a software flaw is found. "We don't foresee many day-zero worms. But we do see more day-seven to day-14 worms," Gartner's Pescatore says. "Fewer than 15% of attacks occur within a month of the vulnerability announcement today. That will double by 2006."

One good bit of security news is that Microsoft isn't expected to launch any major new operating system or database products this year. "Windows 2003 server is now in its second year, and many of the vulnerabilities have already been uncovered," Pescatore says. "So we should see fewer vulnerabilities from them next year." Plus, major software vendors spend more time and energy trying to find security-related bugs before they ship applications. "All of the vendors are very scared of looking like they have more bugs than Microsoft, and they're starting to spend the money to make sure that doesn't happen," Pescatore says.

Businesses battling continuing waves of security threats may need to add new weapons to their arsenals. In addition to quick patching, effective firewall policies, strict remote-user security rules, and keeping antivirus software up to date, businesses should look at intrusion-prevention applications such as those offered by Cisco Systems, Internet Security Systems, Network Associates, Platform Logic, and Sana Security. These applications don't rely on threat signatures and software policies to thwart attacks. Instead, they attempt to block new attacks long before antivirus, intrusion-detection, and firewall systems and policies can be updated.

Want a safe prediction for the new year? Here's one: Companies will face new threats that no one expects, plus many variations of the old threats. Information-security pros aren't willing to predict much progress in the battle against worms, viruses, and other security threats. But there's one thing nearly all of them do agree on: Businesses must continue to devote time, money, and personnel to keep their systems as safe as possible.