Archive | Technology

Investigating Internet Crimes

Written by experts on the frontlines, Investigating Internet Crimes provides seasoned and new investigators with the background and tools they need to investigate crime occurring in the online world. This invaluable guide provides step-by-step instructions for investigating Internet crimes, including locating, interpreting, understanding, collecting, and documenting online electronic evidence to benefit investigations.

investigating_internet_crimesThis year I served as technical editor for this excellent book by Todd Shipley and Art Bowker. Cybercrime is the fastest growing area of crime as more criminals seek to exploit the speed, convenience and anonymity that the Internet provides to commit a diverse range of criminal activities. Today’s online crime includes attacks against computer data and systems, identity theft, distribution of child pornography, penetration of online financial services, using social networks to commit crimes, and the deployment of viruses, botnets, and email scams such as phishing. Symantec’s 2012 Norton Cybercrime Report stated that the world spent an estimated $110 billion to combat cybercrime, an average of nearly $200 per victim.

Law enforcement agencies and corporate security officers around the world with the responsibility for enforcing, investigating and prosecuting cybercrime are overwhelmed, not only by the sheer number of crimes being committed but by a lack of adequate training material. This book provides that fundamental knowledge, including how to properly collect and document online evidence, trace IP addresses, and work undercover.

  • Provides step-by-step instructions on how to investigate crimes online
  • Covers how new software tools can assist in online investigations
  • Discusses how to track down, interpret, and understand online electronic evidence to benefit investigations
  • Details guidelines for collecting and documenting online evidence that can be presented in court

Blackhatonomics: An Inside Look at the Economics of Cybercrime

blackhatonomicsBlackhatonomics: An Inside Look at the Economics of Cybercrime explains the basic economic truths of the underworld of hacking, and why people around the world devote tremendous resources to developing and implementing malware.

The book provides an economic view of the evolving business of cybercrime, showing the methods and motivations behind organized cybercrime attacks, and the changing tendencies towards cyber-warfare.

Written by an exceptional author team of Will Gragido, Daniel J Molina, John Pirc and Nick Selby,  Blackhatonomics takes practical academic principles and backs them up with use cases and extensive interviews, placing you right into the mindset of the cyber criminal.

The Russian Software Pirates

Every day here and in dozens of other Russian cities, pirate dealers sell copies of the world’s most popular software titles at $5 per CD-ROM.

Despite fears about the economy, small and medium-sized businesses are flourishing in this elegant northwestern Russian city – and pirated software is installed on almost all of their computers.

Nearly all high-end computer games, Encyclopaedia Britannicas and other educational and reference CDs are distributed through illegal sources.Bootlegged software use is certainly not limited to Russia. Industry analysts say that 27 percent of the software running on American computers is pirated.

And the Business Software Alliance, which monitors business software piracy, says 43 percent of PC business applications installed in Western Europe are illegal copies.

In Russia, however, the piracy rates are a stunning 91 percent for business applications and 93 percent for entertainment software, according to Eric Schwartz, counsel to the International Intellectual Property Association, a Washington, D.C.-based organization that lobbies internationally on behalf of the copyright industry.

Schwartz said that piracy in Russia costs American entertainment software manufacturers $223 million a year and business software makers almost $300 million. The Business Software Alliance estimates worldwide revenue losses to the software industry from piracy at $11.4 billion.

Under the 1992 agreement with the United States that guaranteed Most Favored Nation trading status, Russia is required to effectively enforce anti-piracy laws, but actual enforcement is virtually nonexistent.

Meeting the Dealers
The dealers, who operate in stalls and kiosks around major transportation hubs or in full-scale markets usually 15 minutes from the city center, offer an enormous range of titles, usually bundled in a form their manufacturers would never dream of.

“That’s Windows 98, Front Page 98, Outlook 98, MS Office 97 SR1 and, uh, yeah, Adobe 5.0,” said Pyotr R., a student at St. Petersburg Technical University, of a single CD-ROM. “On the disk there are files, like ‘crack’or ‘serial’ or something, and that’s where you’ll find the CD keys,” he said, referring to the codes that unlock CD-ROMs and allow users to install the programs.

Pyotr (who spoke, as did all others interviewed for this article, on condition of anonymity) sold that disk, plus a second one containing Lotus Organizer 97, several anti-virus programs and some DOS utilities, for 60 rubles or about $10.

Another dealer was offering Windows NT 4.0 for $5, and Back Office for $10. According to Microsoft, the recommended retail prices for these products are $1,609 and $5,599.

Many Russians, who during the days of the Soviet Union bought most necessities through black market sources, think nothing of buying their software this way. They even defend the markets as providing a commodity that had been long-denied them.

After the collapse of the Soviet Union, inexpensive computers began to flood into the country from Taiwan, Germany and the United States, increasing the importance of these illegal software markets. Spending at least $800 on a computer was an enormous investment for Russians, even relatively well-paid St Petersburgians who earn an average salary of around $350 a month. Those who did buy one were in no position to consider purchasing software legitimately, even if it were readily available, which it often wasn’t.

These days, though, legitimate outlets for hardware and software are popping up everywhere in Russia; computer magazines offer licensed versions of everything available in the United States and Western Europe, and software makers advertise in the city’s well-established English-language media.

The markets continue to thrive with an alarming degree of perceived legitimacy. Outside the Sennaya Square metro station in St. Petersburg, a police officer approached a pirate dealer (who offered, among other things, Adobe Font Folio and QuarkXPress) and angrily chastised him for not prominently displaying his license to operate the stall. When the dealer complied, the policeman moved on.

Customers feel secure that the pirated copies will work and that belief appears well-founded. Bootlegged titles come with a written guarantee – good for 15 days from the date of purchase – that they’re virus-free and fully functional.

And files on the CDs themselves boast of high-quality, code-cracking techniques: “When so many groups bring you non-working fakes, X-FORCE always gets you the Best of the Best. ACCEPT NO IMITATION!” boasts one.

“There’s a lot of viruses around in Russia,” said Dima V., a system administrator who runs several small company networks in St. Petersburg using bootlegged copies of Windows NT 4.0, “but most of the disks you buy in the markets are clean. The guys are there every day and if they give you a virus you’ll come back – it’s just easier to sell you the real thing.”

Foreigners get in on the action
Russians are not by any means the only people installing the pirated programs. While employees of multinational companies or representatives of American companies would never dream of risking their job by violating copyright laws, self-employed Westerners, or ones who have established small Russian companies have no qualms about doing so.

They also pose a question software manufacturers find difficult to answer: Who would buy a network operating system package for $5,000 when it’s available for $5?

“Nobody,” said Todd M., an American business owner in St. Petersburg, whose 24-PC network runs a host of Microsoft applications that were all bootlegged.

“There’s just no financial incentive for me to pay the kind of prices that legitimate software costs,” he said. “I mean, it would be nice to get customer service right from the source, but we have really excellent computer technicians and programmers in Russia and they can fix all the little problems that we have.”

Customer support and upgrades are just what the manufacturers point to as advantages of licensed software, even in markets like Russia.

“There are enormous incentives,” said Microsoft’s Mark Thomas, “to buying legitimate software, and they start with excellent customer support and service and upgrades. We spend $3 billion a year on research and development and the money that we make goes right back into making products better and better products. The pirates don’t make any investment in the industry.”

And local industry, Thomas pointed out, suffers disproportionately in the face of piracy.

“A huge amount of our resources are put into making sure local industry builds on our platform,” he said. “When a local company creates packages for, say, accounting firms, and somebody can come along and buy it for $5, these local companies can lose their shirts.”

Piracy getting worse
Despite heavy lobbying by industry representatives and government agencies, piracy has worsened. As CD copying technology becomes cheaper, large factories in Russia and other countries, including Bulgaria, churn out copies of software copied by increasingly sophisticated groups in countries around the world, especially in Asia.

Encyclopaedia Britannica wrote off Malaysia as a market effectively destroyed by pirates, who sold 98 out of every 100 copies of its flagship Encyclopaedia three-CD set for a fraction of its recommended retail price of $125. The same disks, which have not officially even been offered for sale in Russia, are readily available in the St. Petersburg markets for $10.

“For Encyclopaedia Britannica, the cost of piracy is millions a year,” said James Strachan, EB’s international product manager. “One hundred percent of the value of our product is an investment in the authority and depth of our content,” he said. “Piracy causes us extreme concern and we do everything we can to root it out and prosecute.”

Todd M., the businessman with the 24-PC network, offers little hope that the situation will soon change in favor of manufacturers.

“With all the problems I have running my business here in Russia, from armed tax police to Byzantine procedures and customs duties, software piracy just doesn’t register with me,” he said.

“It’s the one thing about doing business here that’s somebody else’s problem.”

Partial Bibliography

I’ve written a whole lot of stuff. At some point I made a partial bibliography of the technology stuff.

Cyber Crime

Gragido, W; Molina, D; Pirc, J; Selby, N (2012) Blackhatonomics: An Inside Look At The Economics of Cybercrime Syngress, Boston.

Data Loss Prevention

Selby, Nick. 2008. Mind The Data Gap. New York: The 451 Group. Print.

Selby, N. 2009. [Online] Safend, building out its DLP portfolio, updates Encryptor. New York: The 451 Group. 5 Jun 09.

Selby, N. 2009. [Online] GuardianEdge, with 60% bookings growth, approaches a turning point. New York: The 451 Group. 8 May 09.

Selby, N. 2009. [Online] Fidelis announces XPS 5.2 with scanning within local network, and a granted US patent. New York: The 451 Group. 22 Jan 09.

Selby, N. 2009. [Online] Unmitigated chutzpah or the next big thing? BitArmor guarantees against breach. New York: The 451 Group. 21 Jan 09.

Selby, N. 2009. [Online] CA swoops in on Orchestria to connect the dots between data and identity. New York: The 451 Group. 6 Jan 09.

Selby, N. 2008. [Online] Not to be outdone by EMC/Microsoft, McAfee and Liquid Machines join forces in DLP/IRM. New York: The 451 Group. 11 Dec 08.

Selby, N. 2008. [Online] Microsoft licenses EMC data classification kit for Active Directory Rights Management. New York: The 451 Group. 5 Dec 08.

Selby, N. 2008. [Online] Code Green launches TrueDLP, an enterprise-class anti-data-leakage offering. New York: The 451 Group. 7 Nov 08.

Selby, N. 2008. [Online] McAfee takes out Reconnex in a $46m deal that can set the DLP-acquisition bar low. New York: The 451 Group. 31 Jul 08.

Selby, N. 2008. [Online] With good income and a pocket full of euros, Utimaco is going shopping. New York: The 451 Group. 10 Jul 08.

Selby, N. 2008. [Online] Dan Geer becomes In-Q-Tel’s CISO, will continue as Verdasys’ chief scientist emeritus. New York: The 451 Group. 29 May 08.

Selby, N. 2008. [Online] Fidelis and Verdasys team for agent- and network-based anti-data-leakage. New York: The 451 Group. 5 May 08.

Selby, N. 2008. [Online] Varonis expands its flavor of data governance to Unix systems. New York: The 451 Group. 29 Feb 08.

Selby, N. 2008. [Online] Vericept quietly builds out anti-data-leakage business after management restart. New York: The 451 Group. 4 Jan 08.

Selby, N. 2008. [Online] Orchestria evolves into full-blown hybrid anti-data-leakage tool. New York: The 451 Group. 16 Jan 08.

Selby, N. 2008. [Online] After the story leaks, RSA acknowledges. New York: The 451 Group. 8 Jan 08.

Selby, N. 2007. [Online] Symantec and Vontu finally tie the knot for $350m; who’s next to go in ADL?. New York: The 451 Group. 5 Nov 07.

Selby, N. 2007. [Online] Trend Micro continues ADL consolidation, takes out itsy-bitsy Provilla. New York: The 451 Group. 25 Oct 07.

Selby, N. 2007. [Online] Code Green Networks saws off the shotgun for bigger spread at its sweet spot. New York: The 451 Group. 10 Oct 07.

Selby, N. 2007. [Online] Raytheon could tell you what it paid for Oakley, but then it would have to kill you. New York: The 451 Group. 25 Sep 07.

Selby, N. 2007. [Online] EMC’s RSA moves to fill anti-data-leakage gap with purchase of Tablus. New York: The 451 Group. 9 Aug 07.

Selby, N. 2007. [Online] After years of mostly organic growth, endpoint security firm GFI takes on North America. New York: The 451 Group. 25 Jul 07.

Selby, N. 2007. [Online] Check Point’s Pointsec earns FIPS 140-2 certification for Protector, crypto module. New York: The 451 Group. 17 Jul 07.

Selby, N. 2007. [Online] Data leakage: technical or HR problem? 42 vendors think they know the answer. New York: The 451 Group. 2 Jul 07.

Selby, N. 2007. [Online] Fidelis 4.0 expands management console workflow and adds a Milter-based mail agent. New York: The 451 Group. 28 Jun 07.

Selby, N. 2007. [Online] Safend, nearing breakeven, considers a funding round in 2008 and announces Lenovo deal. New York: The 451 Group. 22 Jun 07.

Selby, N. 2007. [Online] PatchLink goes serial with acquisition of whitelisting vendor SecureWave. New York: The 451 Group. 22 Jun 07.

Selby, N. 2007. [Online] Websense, expanding its data-leakage offering, takes out SurfControl for $400m. New York: The 451 Group. 4 May 07.

Selby, N. 2007. [Online] Chronicle’s ADL ties users to documents. New York: The 451 Group. 3 May 07.

Selby, N. 2007. [Online] Check Point earnings off 25%, but acquisitions and R&D in hot spaces show promise. New York: The 451 Group. 27 Apr 07.

Selby, N. 2007. [Online] Bluefire announces Symantec OEM deal; may seek strategic funding in 2007. New York: The 451 Group. 23 Jan 07.

Selby, N. 2007. [Online] Anti-data-leakage vendor Tablus inks VeriSign PCI deal. New York: The 451 Group. 22 Feb 07.

Selby, N. 2007. [Online] McAfee launches anti-data-leakage product based on Onigma acquisition. New York: The 451 Group. 16 Feb 07.

Selby, N. 2007. [Online] DB security vendor Imperva releases Scuba, a free database vulnerability scanner. New York: The 451 Group. 6 Feb 07.

Selby, N. 2007. [Online] On the back of strong growth, anti-data-leakage vendor Vontu adds an endpoint agent. New York: The 451 Group. 31 Jan 07.

Selby, N. 2007. [Online] Guardium updates core modules, launches Change AuditGuard. New York: The 451 Group. 26 Jan 07.

Selby, N. 2007. [Online] Verdasys bolsters its application monitoring capabilities. New York: The 451 Group. 16 Jan 07.

Selby, N. 2007. [Online] Websense solidifies its ADL play with $90m PortAuthority swoop. New York: The 451 Group. 5 Jan 07.

Selby, N. 2006. [Online] Like McAfee, Symantec will address data leakage through acquisition. New York: The 451 Group. 27 Oct 06.

Selby, N. 2006. [Online] McAfee fires president, and CEO quits, then it buys ADL vendor Onigma for $20m. New York: The 451 Group. 20 Oct 06.

Selby, N. 2006. [Online] Reconnex, emerging from shakeup, prepares for a relaunch. New York: The 451 Group. 8 Sep 06.

Selby, N. 2006. [Online] SanDisk buys msystems for $1.5bn, boosting its position in NAND flash market. New York: The 451 Group. 4 Aug 06.


Selby, N. 2005. [Online] M-Systems’ Xkey Shield provides USB media security management. New York: The 451 Group. 23 Nov 05.


Penetration Testing and Vulnerability Analysis

Crawford, S. and Selby, N. 2010. [Online] It92s the Adversaries who are Advanced and Persistent. ThreatPost. January 26, 2010. [Available:]

Selby, N. 2009. [Online] The Penetration Testing Marketplace in 2010. ThreatPost. December 1, 2009. [Available:]

Selby, N. 2009. [Online] Reloading Risk Back Onto The Utilities. November 26, 2009. [Available:]

Selby, N. 2009. [Online] Losing the Echo Chamber in the Critical Infrastructure Security Debate. ThreatPost. November 18, 2009. [Available:]

Naraine, R & Selby, N. 2009. [Online, multimedia] Trident Risk Management’s Nick Selby on Metasploit and Rapid7. The Big Story podcast with Ryan Naraine, ThreatPost. October 22, 2009 [Available:]

Selby, Nick. 2008. Mind The Data Gap. The 451 Security Quarterly New York: The 451 Group. Print.

Selby, Nick. 2007. Sector View: Current Security Trends and Developments. The 451 Security Quarterly New York: The 451 Group. Print.

Selby, Nick. 2009. [Online] Immunity’s Canvas releases Cloudburst, allowing breakout from guest OS. New York: The 451 Group. 6/4/2009.

— 2009. [Online] Immunity, growing fast and profitably, expands reach through partnerships. New York: The 451 Group. 3/19/2009.

— 2009. [Online] Core Security, with Impact at version 8 and customers above 800, hits its stride. New York: The 451 Group. 2/6/2009.

— 2009. [Online] With a longer runway than it expected, Cenzic hits rotation speed. New York: The 451 Group. 2/3/2009.

— 2008. [Online] With new funding, Palamida moves toward vulnerabilities in open source code. New York: The 451 Group. 12/5/2008.

— 2008. [Online] nCircle updates its approach with Suite360 and a Web app scanner. New York: The 451 Group. 11/20/2008.

— 2008. [Online] WhiteHat builds out cross marketing with F5 and expands training. New York: The 451 Group. 11/7/2008.

— 2008. [Online] Core, claiming profits, hires former Sophos North America president as new CEO. New York: The 451 Group. 3/12/2008.

— 2008. [Online] Mu Security’s gains in SCADA, network equipment manufacturing push it past fuzzing. New York: The 451 Group. 3/6/2008.

— 2007. [Online] WhiteHat Security, reporting significant growth, doubles headcount. New York: The 451 Group. 12/10/2007.

— 2007. [Online] Core’s Impact 7.5 and Grasp focus on Web application security. New York: The 451 Group. 10/16/2007.

— 2007. [Online] Legal settlement forces Cenzic and HP (SPI) to play nice and share. New York: The 451 Group. 10/3/2007.

— 2007. [Online] Cenzic looks to mold itself into an acquisition target, starting with Hailstorm 5.0. New York: The 451 Group. 7/19/2007.

— 2007. [Online] Core Security loses flash and substance 96 CEO and product manager 96 in shakeup. New York: The 451 Group. 7/18/2007.

— 2007. [Online] Gleg acquires Argeniss’ zero-day exploit update pack. New York: The 451 Group. 7/12/2007.

— 2007. [Online] HP takes out SPI Dynamics in latest Web application security acquisition. New York: The 451 Group. 6/22/2007.

— 2007. [Online] IBM buys Watchfire, brings Web application penetration testing to the Rational line. New York: The 451 Group. 6/8/2007.

— 2007. [Online] Profitable SPI Dynamics launches Phoenix and WebInspect 7.0. New York: The 451 Group. 2/1/2007.

— 2007. [Online] Sabre Security, with a 80100,000 tech prize, expands BinNavi and VXClass. New York: The 451 Group. 1/18/2007.

— 2007. [Online] Profitable Watchfire releases AppScan Reporting Console and AppScan 7.0. New York: The 451 Group. 1/9/2007.

— 2007. [Online] Core 6.2 adds enhanced encryption, authentication and shell access to exploited hosts. New York: The 451 Group. ½/2007.

— 2006. [Online] Metasploit completes license change, updates pen-test platform. New York: The 451 Group. 8/2/2006.

— 2006. [Online] Immunity integrates Spike, launches VisualSploit and builds out its partner program. New York: The 451 Group. 7/21/2006.

— 2006. [Online] Beyond Security launches beStorm vulnerability assessment software. New York: The 451 Group. 4/17/2006.

— 2006. [Online] Emerging from stealth, Mu Security launches a commercial-grade fuzzing appliance. New York: The 451 Group. 4/5/2006.

— 2005. [Online] Cenzic releases version 3.0 of its Hailstorm Web application pen tester. New York: The 451 Group. 12/15/2005.

— 2005. [Online] Immunity takes an open source approach to penetration testing. New York: The 451 Group. 11/30/2005.

— 2005. [Online] Core Security’s Impact brings pen testing in-house to network admins. New York: The 451 Group. 11/29/2005.

Security Information and Event Management

Selby, N (2009) Enterprise Security Information Management. New York: The 451 Group.

Selby, N (2006) ESIM: Security Information Management Moves Upstream. New York: The 451 Group.

Selby, N. (June 10, 2009) [Online]. Decurity, with some flagship accounts under its belt, branches out. New York: The 451 Group

— (June 4, 2009) [Online]. Vigilant launches Fulcrum, a config library to scale its ESIM deployment chops. New York: The 451 Group

— (June 2, 2009) [Online]. LogLogic extends its series D by $8.8m, bringing total raised to $58.8m. New York: The 451 Group

— (June 1, 2009) [Online]. ArcSight launches ArcSight Express and announces a Cisco partnership. New York: The 451 Group

— (May 1, 2009) [Online]. New trends in enterprise security information management, 05/01/09. New York: The 451 Group

— (April 22, 2009) [Online]. LogLogic buys Exaprotect to shore up its total ESIM/log management story. New York: The 451 Group

— (March 13, 2009) [Online]. RSA’s enVision 4.0 targets smarter sourcing of event data and better reporting. New York: The 451 Group

— (March 5, 2009) [Online]. ArcSight nails another quarter 96 has it yet felt the pain of recession?. New York: The 451 Group

— (February 17, 2009) [Online]. LogLogic and Exaprotect join forces for converged ESIM and log management. New York: The 451 Group

— (February 17, 2009) [Online]. netForensics buys High Tower assets. New York: The 451 Group

— (January 23, 2009) [Online]. ESIM vendor eIQnetworks closes $10m series A funding from Venrock. New York: The 451 Group

— (December 12, 2008) [Online]. With one hand firmly gripping its BatBelt, Splunk markets to the C-level. New York: The 451 Group

— (December 9, 2008) [Online]. ArcSight hits profitability and positive cash flow 96 now to keep it up. New York: The 451 Group

— (November 14, 2008) [Online]. Q1 Labs, extending upselling success of SLIM, launches QRadar SLIM-Free Edition. New York: The 451 Group

— (November 7, 2008) [Online]. ArcSight Logger 3 captures faster, reports better and increases onboard storage. New York: The 451 Group

— (September 23, 2008) [Online]. eIQnetworks hires a new president, fires channel and a low-cost product line. New York: The 451 Group

— (July 30, 2008) [Online]. Government hunting is so happy for Tier-3 that it’s breaking out its product lines. New York: The 451 Group

— (July 11, 2008) [Online]. Inspekt Security launches behavioral and security event analysis service. New York: The 451 Group

— (June 10, 2008) [Online]. Mazu can see clearly now; 8.1 targets network ops as much as security. New York: The 451 Group

— (April 7, 2008) [Online]. EMC and RSA integrate enVision and VoyenceControl. New York: The 451 Group

— (February 6, 2008) [Online]. Alert Logic, in new Houston digs, launches on-demand grid-hosted log management. New York: The 451 Group

— (January 30, 2008) [Online]. eIQnetworks, stepping up its competitive heat, launches SecureVue appliance. New York: The 451 Group

— (January 28, 2008) [Online]. In an aggressive counter to Cisco, Q1 Labs cuts OEM deals with Nortel and Juniper. New York: The 451 Group

— (December 17, 2007) [Online]. Extending its Logger functionality, ArcSight launches Log Management Suite. New York: The 451 Group

— (December 6, 2007) [Online]. TriGeo launches Splunk integration, adds more PCI punch to its SEM. New York: The 451 Group

— (November 27, 2007) [Online]. Mazu Networks continues NOC-SOC intermediary push with Profiler 8. New York: The 451 Group

— (November 14, 2007) [Online]. To make a huge managed security play, what will Cisco buy?, 11/14/07. New York: The 451 Group

— (November 12, 2007) [Online]. eIQnetworks launches SecureVue 3.0, adding flow and GRC to its enterprise ESIM. New York: The 451 Group

— (November 5, 2007) [Online]. Q1 Labs’ SLIM gets log management foot in the door, then goes for ESIM gusto. New York: The 451 Group

— (October 1, 2007) [Online]. ArcSight’s latest feature-based upgrade targets PCI monitoring. New York: The 451 Group

— (September 13, 2007) [Online]. After hinting for three years, ArcSight files for an IPO; uh, does it earn money?, 09/13/07. New York: The 451 Group

— (September 12, 2007) [Online]. ArcSight’s S-1 reveals big revenue, persistent losses and a compliance ding. New York: The 451 Group

— (June 28, 2007) [Online]. With Solsoft integration nearly complete, Paris-based Exaprotect moves west, 06/28/07. New York: The 451 Group

— (June 26, 2007) [Online]. With network operations in mind, Mazu Networks and eIQnetworks partner. New York: The 451 Group

— (June 7, 2007) [Online]. eIQnetworks announces SecureVue 2.5 and licensing deal with Huawei-3Com. New York: The 451 Group

— (June 4, 2007) [Online]. Tier-3’s ESIM and anomaly detection targets network threats and fraud. New York: The 451 Group

— (May 25, 2007) [Online]. Clavister adds ESIM to its unified threat management platform. New York: The 451 Group

— (May 21, 2007) [Online]. With 4.0, ArcSight hopes ESM will move toward enterprise-wide relevance. New York: The 451 Group

— (May 15, 2007) [Online]. Seeking to widen its appeal outside security, LogLogic announces new features. New York: The 451 Group

— (April 12, 2007) [Online]. With new partners and management, SenSage raises $5m in series D funding. New York: The 451 Group

— (February 12, 2007) [Online]. TriGeo’s 4.0 combines network anomaly detection and service management. New York: The 451 Group

— (February 8, 2007) [Online]. eIQnetworks releases SecureVue, an aggressive up-stack move toward ITSM. New York: The 451 Group

— (December 8, 2006) [Online]. IBM buys Consul Risk Management to extend Tivoli Security Operations Manager. New York: The 451 Group

— (December 8, 2006) [Online]. Seven months on, Novell readies the next generation of e-Security ESIM, 12/08/06. New York: The 451 Group

— (December 4, 2006) [Online]. ArcSight moves the goalposts with Logger and Network Configuration Manager. New York: The 451 Group

— (November 27, 2006) [Online]. Intellitactics shifts from pure security to ESIM-based risk metrics. New York: The 451 Group

— (November 21, 2006) [Online]. Cambia and ArcSight play key security roles in HP-Mercury’s Universal CMDB. New York: The 451 Group

— (October 24, 2006) [Online]. LogRhythm 96 lean, mean and bootstrapped 96 takes new angel money, rolls out 3.5. New York: The 451 Group

— (October 18, 2006) [Online]. NitroSecurity plans new funding, prepares to launch NBAD/IPS/ESIM hybrid. New York: The 451 Group

— (October 13, 2006) [Online]. ExaProtect and Solsoft in an ‘acquisition by merger’. New York: The 451 Group

— (September 29, 2006) [Online]. SenSage-EMC deal brings SenSage from security into a new world of data management. New York: The 451 Group

— (September 28, 2006) [Online]. Consul morphs log collection and mining into a policy management play. New York: The 451 Group

— (September 25, 2006) [Online]. Q1 Labs upgrades device discovery, improves its UI and expands its channel. New York: The 451 Group

— (September 22, 2006) [Online]. EMC, its RSA buy approved, adds Network Intelligence for $175m. New York: The 451 Group

— (September 18, 2006) [Online]. EMC gets RSA shareholder nod, buys Network Intelligence for $175m. New York: The 451 Group

— (September 14, 2006) [Online]. TriGeo adds features, doubles customer count; can it keep that small-town charm?. New York: The 451 Group

— (September 12, 2006) [Online]. ArcSight releases ITP to bolster insider-threat claims, proposes CEF standard. New York: The 451 Group

— (August 25, 2006) [Online]. Will HP extend OpenView and OpenCall functionality into ESIM through M&A?, 08/25/06. New York: The 451 Group

— (August 18, 2006) [Online]. ArcSight launches Network Response Manager, extending reach into infrastructure. New York: The 451 Group

— (July 25, 2006) [Online]. With ESA 2.5, eIQnetworks is latest ESIM vendor to scrap relational databases. New York: The 451 Group

— (July 13, 2006) [Online]. Securify adds identity correlation and predefined rules to version 5.2. New York: The 451 Group

— (July 6, 2006) [Online]. Symantec shuns relational database event storage in its security event manager. New York: The 451 Group

— (June 26, 2006) [Online]. Claiming sales and product momentum, PatchLink looks for more partners. New York: The 451 Group

— (May 26, 2006) [Online]. ArcSight buys configuration and quarantine vendor Enira Technologies. New York: The 451 Group

— (May 11, 2006) [Online]. Self-funded LogRhythm releases version 3.0, then cautiously considers external funding. New York: The 451 Group

— (April 28, 2006) [Online]. AttachmateWRQ acquires NetIQ for $495m. New York: The 451 Group

— (April 21, 2006) [Online]. Novell buys e-Security to integrate identity management and security management. New York: The 451 Group

— (April 11, 2006) [Online]. Security information management approaches a fork in the road, 04/11/06. New York: The 451 Group

— (March 24, 2006) [Online]. Mazu claims new partners and doubled revenue. Is it next on Symantec’s hit list?) [Online]. TDM Target IQ, 03/24/06. New York: The 451 Group

— (March 22, 2006) [Online]. Splunk ventures into the cavernous maw of enterprise log data. New York: The 451 Group

— (March 13, 2006) [Online]. Q1 Labs plans out-of-the-box interoperability with Packeteer. New York: The 451 Group

— (February 6, 2006) [Online]. LogLogic releases version 3.2, beefs up compliance reporting. New York: The 451 Group

— (February 3, 2006) [Online]. ArcSight looks for NBAD, end-point configuration and policy management functions, 02/03/06. New York: The 451 Group

— (January 30, 2006) [Online]. ArcSight homes in on compliance-insight marketing. New York: The 451 Group

— (December 19, 2005) [Online]. eIQnetworks brings high-volume, low-cost ESIM to the enterprise masses. New York: The 451 Group

— (November 14, 2005) [Online]. Q1 Labs targets midrange enterprises with QRadar 5.0 release. New York: The 451 Group

— (November 11, 2005) [Online]. Intellitactics emphasizes executive reporting and horizontal scalability. New York: The 451 Group

— (November 10, 2005) [Online]. e-Security hones its workflow integration and event enrichment for ESIM. New York: The 451 Group

— (November 1, 2005) [Online]. Network Intelligence repositions and targets ESIM big game. New York: The 451 Group

— (October 28, 2005) [Online]. TriGeo happily targets low end and midrange of ESIM market. New York: The 451 Group

— (October 27, 2005) [Online]. SenSage emphasizes security event analytics over incident response. New York: The 451 Group

— (October 19, 2005) [Online]. With version 3.5, ArcSight targets insider threats, subtle attacks… and an IPO?. New York: The 451 Group

All I Want Is A Combo WiFi/GSM/CDMA Device. In Black.

Despite a predilection for triple-shot lattes, it wasn’t just caffeine that had me spending hours a day in coffee bars across America recently, shouting into my mobile phone above the din of the grinders. Mostly, it was the Wi-Fi connection.

For three months I’ve lived a salesman’s life away from my Munich home. I travel by single-engine airplane across America, pitching my company’s services to airport businesses. Contact with the office (and my wife and son) is through e-mail and mobile phone calls.

Every day I find the nearest Starbucks or Borders books, where a T-Mobile HotSpot provides a high-speed 802.11b, or Wi-Fi, Internet connection. I download dozens of e-mails and swap sales presentations with co-workers.

There are niftier alternatives to Wi-Fi, some argue, but I hate reading e-mail on my mobile phone’s tiny screen, and I refuse to click four times for an “s” or quibble with the phone’s dictionary over whether mañana is an English word. Nor will I spend $400 for a Blackberry device that does little more than e-mail.

Full-blown personal digital assistants permit me to open simple presentations and, with an added folding keyboard, type documents. But at their best, mobile data services in the United States merely double the dial-up speed. The average presentation is well over a megabyte; that can be a battery-sucking 20-minute download.

PDA’s like Hewlett-Packard’s iPAQ h5500 have integrated Wi-Fi but don’t connect to mobile networks without more than $300 in add-ons.

Most PDA-phone hybrid devices offered by U.S. mobile providers, like the Kyocera 7135, Samsung SPH-i330 and T-Mobile’s Pocket PC Phone, let you do e-mails and limited Web surfing, but they have few or no expansion capabilities.

Geeky friends say, “Just set your PDA’s Bluetooth to use your mobile phone as a modem.” Oh, good: a new device, dependent on an existing one, to provide a mediocre connection. With all this on my belt, I’ll look like Batman. Why is this all so clunky? Where is the single handheld device that lets me connect to e-mail and voice via mobile and high-speed Internet via Wi-Fi – for under $1,000?

While I’m at it, my device should, when connected to a Wi-Fi hotspot, let me make calls using voice over Internet protocol, or VOIP. Apart from the Wi-Fi fee and perhaps a service charge to the VOIP provider, the calls would basically be free.

Wi-Fi is here today, typically offering connection speeds faster than even the best 3G network will offer – when 3G gets here.

It’s not just me. Mobile professionals – sales people, journalists, investment bankers and other early-adopter types – all want this $1,000 dream device. We are a clear market segment, and we’re willing to pay.

Don’t tell me the technology isn’t here: Miami-based Calypso Wireless developed the C1250i Wi-Fi-enabled cellular phone and announced a deal for $500 million with China Telecom to begin delivering phones this year. If tiny Calypso can do it with a phone, can’t somebody do it with a PDA?

“We know that’s the right solution,” said Brant Jones, a marketing manager for the iPAQ pocket PC at Hewlett-Packard, “but we just can’t do it yet for the technically intolerant.”

Wi-Fi, with spotty coverage and the fact that there is no widely available way to roam between networks, is far from perfect. But Wi-Fi use is rising. Most new notebook PC’s and many new PDA’s have integrated Wi-Fi.

Increased demand for hotspots has already initiated a fundamental shift in how operators intend to provide Wi-Fi services. Big players like AT&T, British Telecom, Virgin, IBM, Vodafone and Intel are realizing that sharing infrastructure makes more sense than having each company build its own.

For example, T-Mobile HotSpots provides wireless Internet connections at more than 2,000 Starbucks locations. But their business model is a classic “walled garden.” To use it, you need a U.S. T-Mobile HotSpot account. A British T-Mobile account won’t work. That’s silly.

A better way of getting more people to use more hotspots is more democratic. “Neutral hosts” let multiple providers share the same hotspots. They install hotspots in retail stores, airports and train stations. They then go to operators and say: “We’ve got 5,000 hotspots in retail stores around the country. We’ll let you use them to give your customers access; they pay you, and you pay us a percentage of the take.”

So as an end user, you log in with your existing credentials rather than opening a new account. If you use BT Openworld for Internet access at home, you’ll use BT Openworld when you’re in Paddington Station in London.

It’s self-propagating, too: Once a neutral host has cut deals with several operators, it can walk into a supermarket chain and say, “We’ve got 4.5 million customers who want Internet access; we can bring them into your stores if you give us permission to set up a wireless network in each one.”

It’s an elegant solution to a big problem. “People don’t want different bills,” said Magnus Mcewen-King, chief executive of Broadreach Networks, a neutral host operating Wi-Fi hotspots for Virgin and BT Openworld. “They want one account spanning access methods – cellular, Internet and voice.”

“Neutral hosting shows greater promise than roaming to succeed in offering end users easy access to public Wi-Fi,” said Bjorn Thorngren in a report for the wireless investment firm BrainHeart Capital. Thorngren forecast that providers that used the walled-garden approach to Wi-Fi billing will not survive: “They will have to change strategy or vanish.”

Cometa Networks, a neutral host backed by Intel, IBM and AT&T, plans more than 20,000 hotspots across the United States by 2004. The company’s plan is to “sublet” to brand-name Internet service providers like AT&T and IBM. This approach should bring Wi-Fi coverage up to mainstream levels – within a five-minute walk or drive for most people.

Job Hunter’s Heaven

The loneliest people at this week’s European Conference on Optical Communication (ECOC) in Munich were upstairs, through the small fire door, around the corner and down the hall. If you were to enter through the first door on your right, about two dozen heads would pop out from behind paper-plastered cubicle dividers and stare at you wistfully, as if you’d shone a searchlight into a woods full of deer.

Welcome to the world of photonics industry recruitment.

“Staffing is definitely an issue,” said Walter Hobbs, director of ACT Venture Capital. “We get a lot of technology companies coming to us and saying, ‘Yeah, we can do this, but we need 30 engineers’ and our first question is, ‘Well, where are you going to get them?’ In general, this is a big concern for our companies – how to build the team.”

Steven Storey, managing director of Equate Human Resources, which sponsored the ECO recruitment area, agreed. “There are thousands, ridiculous numbers, of vacancies across Europe, and there’s simply not the candidates to fill the positions,” he said.

That sentiment was echoed among recruitment representatives from several companies, which included large players like Alcatel, Siemens and Lucent – all of whom have stands plastered with job openings for engineers at locations around the world – as well as by representatives from venture-funded companies like England’s Southampton Photonics and Scotland’s Kymata.

Southampton, a manufacturer of DWDM (Dense Wave Division Multiplexing) products, which recently received a $55 million (€61.76 million) in seed funding, says that it needs to fill 200 high-tech positions in the next 18 months. Southampton intends to establish design, production and sales facilities in California, where it wants to hire an additional 250 staff by the end of 2002. The new jobs will consist of professional engineers and manufacturing personnel, as well as sales and marketing staff.

“We’re aggressively seeking employees,” said Southampton’s product marketing manager Adam Reeves, “and the way we can do it is that we offer a really good package, but we also have something else. We’re a young company, but we’re very well-funded, so working for us is less risky than it would be for less well-funded companies.”

Equate’s Storey, who also consults for companies by seeking trained technicians working in other technical fields with crossover potential, including medical imaging, lighting systems and even semiconductor fields, says that in attracting talent, high-tech companies in Europe are finding increased competition from US firms – which offer salaries that human resources people at the conference called “outrageous” – as well as finding a trend among European firms to look for talent across Europe and Asia rather than just locally.

Large salaries and employee stock option packages, so common in the US, are beginning to pop up in Europe as well, as top-flight engineers begin to realize that they are in the midst of a revolution, in which they ply a vital role, that some say further increases the challenge for the smaller companies to find and retain the talent they need.

But Brendan Hyland, CEO of Kymata, which makes DWDM opto-electronic devices for the telecoms industry, dismisses the idea that there’s no one to fill the jobs. This March, Kymata completed a third round of venture funding for $72 million (€80.85 million) from 3i, Kleiner Perkins Caufield & Byers, Bowman Capital, ACT Venture Capital, CommVenture and Telesoft Partners.

“We’ve grown from 12 to 250 employees in the past 12 months, and our turnover rate has been effectively zero,” Hyland said, “and we didn’t do that with stock options alone. Yes, you have to treat people well and we do, but the thing that attracts and keeps people is to challenge their minds.”

Kymata, founded in England, relocated to central Scotland where, Hyland says, it found one of the richest pools of high-tech talent they could hope for: Within an hour and a half, they’re surrounded by five university research facilities, which produce 450 graduates and 60 to 70 PhDs per year.

And the region has a history of large-scale semiconductor fabrication, which meant that there was an ample supply of people already used to working in a clean-room environment.

Kymata, too, is looking to fill positions, in areas of optical packaging development, wave-guide device and sub-system design and failure analysis, as well as in non-technical fields including marketing and, of course, human resources.

Indeed, perhaps as important to these companies as engineers are salespeople. “This isn’t pots and pans these guys are selling,” said ACT’s Hobbs. “You need some pretty specific skills to go out and sell products of a sunrise industry. But fortunately with sales people, you can recruit them from the territory in which you want them to sell, as opposed to trying to get engineers to relocate themselves and their families to be near your headquarters.”

“This is a problem in the economy in general and in high-tech, high-growth industries in particular,” said an analyst at Merrill Lynch, “and part of it is the issue of huge compensation packages and part of it is keeping the people interested.”

While Kymata’s Hyland points to several universities cranking out 450 graduates a year, that number is bound to increase tremendously as students push to learn skills required to get them into the ground floor of such a fast-growing industry. This will, in turn, eventually lead to a glut.

“It’s nothing radically different in photonics,” said the Merrill analyst, “Last year we had thousands of programmers running around doing Y2K work – need a programmer? There are thousands of them available right now waiting for work in e-commerce. And in four years, you’ll have 25,000+ highly trained and qualified photonics engineers sitting around doing nothing.”

Eurolabels Have To Wake Up And Smell The Gnutella

The debate in the US over Napster, which allows people to trade music files from one another’s computers via the Internet, is affecting more than just disgruntled college students and sullen heavy metal bands. European record labels, conscious of the overwhelming tide of digital free-trading that’s sprouted in the past year, are looking at making fundamental changes in the way they deliver products via the Internet.

What’s at the Heart
Napster, and sites like it, allow users to take a CD recording they own, copy it to their hard disk in a format called MP3, which affords low file size while maintaining the CD recording standard sampling rate of 44.1 Khz. The Napster site then allows others to download the file from the user’s computer, at no cost to either party.

The record labels are panicked because this setup kicks the traditional business model of the industry in the teeth. The record industry’s model is intricate and has taken the labels years to perfect. Artists write (or sometimes just perform) the music, and sign contracts with the label to produce “albums”.

The artists or the record label then hires a producer, who works with the artists in the recording studio to perform and record each song. The producer shapes the work to fit a vision that is, in the best cases, a perfect fusion of the artist’s vision and the record label’s commercial interests. The record label takes the completed master recordings, which they own; copies them to media (CD, tape, or vinyl); and packages, markets, and distributes through its network of retailers and direct sales outlets. Of the wholesale price, the record label grabs the lion’s share and brush a few crumbs toward the artist and producer. Retailers then bring home fat profits from slapping on a multiple of the wholesale price.

So, with the advent of music available online, the traditional model is at risk of evaporating for not only the record labels and retailers but the artists as well. “When you sign an agreement as an artist,” said entertainment attorney and artist representative Harry J Getzov, who represents, among other people, The Jerky Boys, “you give away, if you’re lucky, 85% of your work – and actually, after packaging and other deductions that have been built in over the years, it’s often less than that.”

Enormous Potential
Online music is not a small market. A recent report by e-commerce research group Jupiter Communications found that online commerce revenues for Western Europe would rise eight-fold by 2005, from a current €8 billion to €64 billion; the number of European online buyers would increase from the current 20 million to 85 million. In 1999, music comprised 44% of European online purchases. But as music downloading proliferates, the current leading distributors could find themselves at the wrong end of hot new competition.

“It’s been clear for the past five years that music distribution would change tremendously,” said Michael Blok, senior analyst with Rabo Securities, “At this point, consumers are saying, €Why would I pay $25 for a bundled product of two or three songs I like, and two or three that I don’t? Out of that $25, about $14 goes to the record store, packaging, shipping, etc, etc.”

The Opportunity For Online Music Retailers
“When someone hears a song on the radio,” said Blok, “and they want that song, they go to Napster and download it free. But Napster, while unreliable, slow and of mixed quality, is such an excellent concept. The labels just have to offer something better: reliability, high quality, and value added. Then if someone forced me to pay 50 cents for the same service, I would easily do it cause I get better quality and extra services I would love.”

Jupiter analyst Stacey Herron agrees. “Napster’s popularity with music fans demonstrates the constant demand for online music,” wrote Herron in her report, “but represents only one aspect of the future of online music. Labels and artists should take a cue from Napster’s success and work towards releasing more comprehensive catalogs of music online. They should also move away from the goal of charging fees to download individual songs and towards more flexible distribution and payment models.”

Those extra services are exactly what the record labels must do to survive instead of filing lawsuits in an effort to stave off the inevitable. Consumers polled by Jupiter said that the most important aspects to them were quality and virus protection. Offering that, in addition to exclusive content, artist interviews and chats, and other services, is the only way to get the music lovers to pay for what is currently free and probably illegal.

Bertelsmann Leads The Way
Record labels are gradually coming around to embrace the Jeannie that’s already well out of the bottle. As usual, Bertelsmann is moving fast in this space to make music download align with its stated strategy. “Our core strategic focus is on further development of our positions in our different content markets,” said Bertelsmann spokesman Markus Payer, “so on the technological side, we’re working to digitize all our content.”

Bertelsmann owns BMG, the world’s fourth largest music label, and has a stake in Lycos Europe. Last month, BMG Entertainment Group bought struggling online CD retailer CDNow for $117 million. Last week, Bertelsmann, BMG and Lycos Europe announced that they would establish on August 17, allowing German-speakers access to MP3-formatted music content.

Publicly traded European record labels in the online music retailing space, such as EMI Group PLC, Vivendi (through its purchase of Universal, including the Universal Music Group); BMG, owned by quasi-public Bertelsmann, which sells profit participation shares; and AOL, through its Time-Warner merger, could all benefit significantly if they learn to transform their business model. And they must move quickly. Napster, while raising the ire of the RIAA and such plausible champions of justice as Metallica, is not alone. Other websites allowing such trading are springing up daily, such as Scour, which offered as of this writing almost 2.5 million music files, Gnutella, and Freenet.

Startups To Benefit From UMTS Spending

Imagine you’re a telecom, and you wake up this sunny Friday to realize it’s not a dream, you really did just pay £8 billion for two German third-generation mobile license blocks. Yes, you paid much more than you wanted for fewer license blocks than you’d hoped. And when your friends ask you what, specifically, you will do with this license, you can’t answer.

If you think you hear laughing, it’s probably coming from Denmark.

“We were all laughing about this just yesterday,” said Soren Jessen Nielsen, head of strategic business development in Europe for BlueKite, which just closed a $36 million round of funding from a VC group headed by Texas Pacific Group and including Credit Suisse First Boston. The investors purchased a 21 percent stake in BlueKite, which develops proprietary bandwidth optimizing technologies and a software platform aimed at increasing network capacity and Internet access speeds for fixed and mobile networks.

“Bandwidth is finite; it’s absolute,” said Nielson, who scoffs at UMTS hype. “A 2MB line into a PDA? Please. When UMTS comes, no one has any idea what they’re going to do with it. But I’ll tell you, whatever they (the telcos) do, they’re going to run into the same bandwidth problems and capacity issues that you have with GSM and Edge. You ain’t gonna have multimedia while traveling on a train, forget that one – that’s marketing hype.”

But whether BlueKite believes the UMTS dream or not, it’s hoping to profit from it. The San Francisco-based company, with roots in Copenhagen, may be one example of how startups in Europe can benefit from the trucks full of money being thrown at UMTS. Whether you believe UMTS is the Great White Hope or a Big Fat Joke, one thing European VCs seem to agree on is that companies developing applications for next-generation mobile networks are worth funding. With telcos around Europe set to pay up to $200 billion for licenses, they may have little money left to develop their own applications to run on these networks. Enter wireless communications, software and technology startups.

“There is a ton of work to be done to create these UMTS-based applications, and this is an area where small companies are really needed, and where they can do a good job,” said Peter Dietz, managing director of TakeOff VC Management. He believes the UMTS bidding war will cause larger companies to leave to small companies the work of making the applications that will make UMTS sexy. “I can’t name names at the moment, but we have already been discussing this with two of the German companies in our portfolio; one is something of a cross between an IT service and a multimedia agency, and the other is a pure software development company.”

Kim Bach, vice president at 2m Invest in Copenhagen added: “This is a perfect example of the “Tornado effect.’ There’s so much money being spent in this area that it’s impossible to imagine it won’t have a positive effect on the small suppliers.”

Bach has seen this market development coming for a long while. 2m has been sinking money into the organization that is now BlueKite since 1993, when it was called RadioMail, and it had teamed up with Motorola to make Newton-like handheld devices.

“We really knew the idea of wireless computers was the way to go in the future, but we were out,well, let’s say a bit too early,” Bach said. “But we were sure this technology would have to have a breakthrough sometime, so we kept feeding what would become BlueKite until a couple of years ago when they really took off.”

BlueKite’s reincarnation about two-and-a-half years ago, headed up by CEO David Cox, was funded by $1 million in seed money from 2m, which owns 41.6 percent of the company. BlueKite started with offices in Silicon Valley, but fleeing high prices and labor costs, it moved it kept its administration in San Francisco, but moved research and development to Los Angeles. In the last year, the company has grown from 10 employees to more than 70, and has offices in Copenhagen, London, Frankfurt, Amsterdam and Paris.

2m invested an additional $3 million last year. BlueKite’s aim is to develop technologies that better manage bandwidth and compress data, but still utilize existing infrastructure. For example, on a standard ISDN line, BlueKite technology can determine, on an ongoing basis, whether a given user needs two or three channels, or just to keep one open on an idle mode.

In fact, BlueKite already offers a technology that allows ISDN-speed data transfer rates over existing wireless networks for companies including British Telecom, Swisscom and Telecell Portugal, as well as Connect Austria.

“We looked at everyone offering solutions to bring high-speed mobile data transfer,” said Lars Reichelt, currently COO of Connect Austria and soon to be director of wireless for Europe at Yahoo. “When we finished, BlueKite came up by far the best,” even with competitors including Nokia and Ericsson offering similar products. “This is a great tool, and it makes the workplace truly mobile. You don’t have to worry about fumbling around looking for a proper phone plug – in Austria there are seven approved types of phone plugs. It costs 3 shillings ($0.20) a minute, and you can work while others watch in wonder.”

BlueKite may well be poised for growth during the development of the so-called mobile future, but it won’t be alone for long. Software companies are desperately needed to build the very applications that will make UMTS profitable, and most startups aren’t clueless to the trend. Some industry estimates put the number of WAP development companies at over 600 in Europe alone, and VCs are desperately trying to plunk their cash into the right wireless companies. Yesterday, every VC wanted a in its portfolio, now they want wireless startups.

“This (the development of UMTS) creates opportunities for smaller companies,” said Stephan Uhlmann at Deutsche Venture Capital Gesellschaft. “There’s a great opportunity here for developers of applications that will bring products to end users via UMTS.”

Eaten By Snakes: Virus Hoaxes & How To Spot Them

Every year businesses worldwide spend more money soothing the nerves of employees who’ve received hoax virus warnings than they do on actual viruses. So before you pass on the note your friend Ned sent you about a new virus that will make snakes eat your hard drive, give it a little thought.

If you didn’t receive an email from a friend a while back warning you about the deadly SULFNBK virus, you probably haven’t gotten out much on the net yet. SULFNBK, the email warned, can hide in your computer and exact terror on a certain date, and it helpfully goes on to tell you how to delete the renegade file.

SULFNK was another hoax. SULFNBK.exe is a standard Windows operating system file, allowing Windows to handle large file names like “memo to dad.doc”. (Read Mcafee Associates warning about Sulfnbk)

At the U.S. Department of Energy, a group called the Computer Incident Advisory Capability monitors and debunks phony virus alerts and chain letters as an integral part of its overall security program – check their site at <href=‘’ target=‘_blank’>

Rule Number 1:
If you see request in an email warning to “Pass it on,” you should immediately be highly suspicious of the message. The fastest way to prove a virus warning is to look it up in Symantec’s online <href=‘’ target=‘_blank’>hoax and virus encyclopedia.

Another excellent resource is from <href=‘’ target=‘_blank’>Stiller Research, which lists the top five hoaxes of the month including, in April 2000, a hoax regarding asbestos being used in tampon production.

Spotting a Hoax
Hoaxes usually include sentences in ALL CAPITAL LETTERS in the subject line and lots of exclamation points!!!!!! They also have, almost universally, this syntax:

“If you receive an email with a file called ‘Such-and-such’, do not open it. It contains the email virus E’This and that’ which will ‘do this or that’ your hard drive.”


Another type of hoax involves having you forward chain letters on the theory that if you send the email to 1,400 of your closest email buddies you’ll win a free phone, Microsoft stock, Disney tickets, yadda yadda yadda. No one gives you something to email someone. No one. Not even Nokia. What to send someone who sends you a “Forward this message and get a free cigar” message? An excellent sample is up at

Not All Are Hoaxes, Of course…
As the “I Love You” virus which struck at the beginning of May 2000 showed once again, the threat of a virus in the form of an attachment to an email is very real, and a big pain in the kiester. However, note that it ismost often clicking on the attachment that creates the problem, not the email itself.

I personally have no clue why it is that people just go ahead and click on something called ILOVEYOU in an email from an editor – a position uniformly filled by people with a demonstrated inability to love anyone. I would indeed find the idea of an editor telling me to “click here to see how much I love you” menacing enough to shut down my computer and proceed to the nearest bar.

But even if the file had been attached to a message from my sainted sister I would have viewed it with suspicion and virus checked it before opening.

As a colleague, Ed Hasbrouck, points out: “Most security attacks and viruses are directed at – and depend on interactions between – the most common combinations of software; Windows 9X OS, MSIE 4 or 5 browser, MS Outlook or Eudora e-mail, and MS Office word processing, spreadsheet, etc. applications.

“The fewer components of this bundle you use, the less vulnerable to the most common attacks and viruses there are. Viruses that propagate by getting MS-Outlook to launch an MS-Word macro can thrive. No one writes viruses that depend on using Pegasus Mail to launch a WordPerfect macro, since too small a percentage of recipients would have that combination, and they wouldn’t succeed in spreading.”

Note, though, that viruses don’t spread through an email message. You can’t “destroy your hard drive” or have your hard drive eaten by monsters just because you open a message that came with an infected attachment (I myself opened the message saying “I love you”, saw the file and immediately deleted the attachment – easy peasy). Some simple steps can prevent your getting infected by a virus.

1. Use a non-standard mail program. Ed and I use Pegasus Mail, a free program that makes Eudora’s new 4.3 release look positively clunky. It’s free on the web at <href=‘’ target=‘_blank’>

2. Be suspicious of any attachments, even from people you trust.

3. Be highly suspicious of attachments that are an executable program (that is, the document ends in “.exe”).

4. Be suspicious of and never fail to virus-scan attachments of Microsoft Office documents (Word, Excel, Power Point, etc) for macro viruses.

5. Be highly suspicious of any attachments that have an unfamiliar extension (the last three characters of the file name). “I Love You” was attached to a file with a “.vbs” extension. If you’ve never seen a file extension before, do one of two things:

    a) If it’s from someone you know and trust, virus check it using the latest version of your favorite virus scanning software – and update the virus scanner monthly from the company’s website.

    b) If it’s from someone you don’t know or someone you know casually, delete the sucker. Send a message to the sender saying you did, and if it was something important, ask them to send it again, then repeat step A.

6. Use Macintosh or Linux machines instead of Windows. Okay, okay, that’s asking a bit much. But because so relatively few people use those platforms, virus scares for them are far fewer.

Lessons of the HBGary Hack

“My father was in the secret service, Mr Manfredjin St. John, and I know that you don’t ‘keep the public informed’ when you are debriefing KGB defectors in a safe house.”
– Wendy, A Fish Called Wanda

I’ve been speaking quite a bit lately about how information security professionals can work with law enforcement – in fact, I’m speaking about it next week at BSides San Francisco. The attacks by Anonymous against HBGary, and the accompanying defecation-hitting-the-ventilation raises some important rules of the road for this.

Private-public sector cooperation is at the heart of nearly all successful initiatives. The public sector relies on private-sector innovation and expertise – indeed, organizations like In-Q-Tel and the Chesapeake Innovation Center count on it to make crucial advances in security. There’s great satisfaction in working for the greater good – which can come in a warm, fuzzy feeling of accomplishment, or even in the warmth of some “non-recurring engineering funds” from some grinning, creepy guys in “Maryland”. Trying to get the specifics of your good deeds into the limelight, though, for personal or company public-relations gain is just bad business.

When speaking with journalists and analysts, executives at information security companies – especially venture-funded, non-profitable, non-cash-flow-positive ones – have long used implication, hints, wink-wink gestures and other sometimes adorable intimations that they ‘work with’ ‘three-letter agencies’* or law enforcement in darkly secret and very important ways. They do this because they are trying to build their brand credibility.

They often end up sounding like a tool.

Now, often-times, they actually are using their technologies and their skills to support the work of law enforcement, but they’re not supposed to talk about it. Nor should they want to, necessarily. If I sound snarky, let me be clear that public service is not to be mocked, it is absolutely to be lauded, and anyone helping a law enforcement agency fight crime, whether for money or service, is to be encouraged.

But don’t forget that, as you help out, it is just that: public service. You can’t publicize the specifics of your assistance without jeopardizing its very value. This is the line, apparently, that HBGary employees inadvertently crossed, and the results were terrible.

[Let me say that, while I am using this as a cautionary tale, everything I know about the HBGary folks is that they are good, innovative and really smart people who care, who are passionate about technology and security. They’re good people who made a tactical marketing blunder.]

In the Financial Times last Saturday, in an article entitled, “Cyberactivists warned of arrest,” Joseph Menn quoted HBGary researcher Aaron Barr as saying that, “he had collected information on the core leaders, including many of their real names, and that they could be arrested if law enforcement had the same data.”

They could be arrested if? What hubris! Now, I don’t know much about law enforcement, but I do think that, if you’re planning, say, to serve a felony warrant, it’s a bad idea to phone ahead and let the guy know you’ll be by in 15 minutes. If?

A good rule of thumb is that you don’t tip your hand about the specifics of your work on any case for any reason. And drumming up business through publicizing your specific public service is as bad a reason as any.

Reasons for this fall into two categories. The first is that fighting crime is, you know, dangerous. Criminals generally engage in criminal enterprises for the money (few people have a driving passion to establish, say, an industry-leading counterfeiting ring for the societal benefit), and those who stand between criminals and their goal risk the ire of the criminals. This is not fair or just, but it is so.

Now, stating in a newspaper that you possess the secret identity of a criminal? This falls squarely into the category of “standing between a criminal and his goal.” That’s a tip, kids. Write it down. To paraphrase Wendy in A Fish Called Wanda, one only briefs the public on an upcoming law enforcement action if one is congenitally insane or irretrievably stupid.

Second, law enforcement officers, agents and agencies fight crime for a living. It’s dangerous and often thankless; it’s a calling, and these folks work hard under difficult conditions that require dedication, passion and purpose. Implying that they’re somehow not up to the task by stating that you have the X-factor that can be the secret of their success alienates those you seek to help.

Security firms and security professionals who want to help law enforcement should recognize a few things:

  1. Helping law enforcement is rarely a straightforward task. Sure, in movies, “we need your help” is followed by specific tasks that lead to the capture of the bad guys, the breaking up of the crime syndicate and windsurfing at Disneyland.
  2. Relationships in law enforcement must be carefully cultivated. Sworn officers and agents need to learn that you are trustworthy. You must learn the extents of their capabilities and authority. This takes time.
  3. Your help can’t be more trouble than it’s worth. In the movies, the brilliant but eccentric mathematician/hacker/systems expert can be un-bathed, wild-eyed and unpredictable. When you’re working with the fuzz, one press release costs you any and all good-will you’ve developed to date.
  4. The time to talk about arrests is a year later. The people to talk about arrests are cops. You’re helping law enforcement as part of your civic duty. While the cops will often be happy to mention your help in a press release at some point down the road, your primary driver for helping is public service, not self-promotion. If you’re in it for the publicity, get a cooking show.
  5. Criminals are dangerous. Criminals seek profit, and seek through illegal means to thwart those who would prevent these profits from being realized. Fighting criminals can absolutely be a cooperative exercise between public and private sector, but private sector people should keep the details of their cooperation as secret as the “sauce” they love to say makes their product work.

In short, companies wishing to help out might consider following the advice of Chris Rock, as he described some of the best ways Not to Get your Ass Kicked by the Police.

  • Obey the law;
  • Use common sense;
  • Be polite; and
  • Shut the #!@k up.

Nick Selby is CEO of a stealth-mode technology start-up. He is a sworn law enforcement officer in Texas, and will speak at BSIdes San Francisco on February 14th about ways in which information security professionals can work with law enforcement.

*a phrase which itself provides proof that they do not