Here we go again.  In the latest round of annual security surveys we now have the “2008 Security Survey” from InformationWeek.  As presented by its authors, the main message of this survey is that “risk management” is the answer to the woes of continued investments in security that has seemingly no real improvement.  The survey is thorough in its analysis of the data collected, and even goes on to point to applications of “risk management” by industries like insurance as models of a proactive strategy that should be emulated by information security managers as well.

The survey once again confirms earlier conclusions and collections of anecdotal evidence that emerge year after year in surveys taken and published not only by InformationWeek but others (e.g., “Global Security Survey” from CIO, “State of Information Security” from CSO, the industry-specific Global Security Surveys from Deloitte, and the “Global State of Information Security” done annually by PriceWaterhouseCoopers, CIO and CSO).

While every one of these surveys delivers powerful reminders of “where we are” with regard to our current information security practices and status, there seems to be a consistent thread of “why are we stuck?” along with exhortations to be more diligent (like the insurance industry) in performing “risk management” to help determine investment and response priorities.  Apparently, no matter how well we do, it’s just not good enough.

What If We Could Perform Information Risk Management “Perfectly”?
No matter where or how it is applied, risk management, including information risk management, is a purely defensive strategy that works in two ways:

1. Protect what value already exists even if some “bad stuff” happens.
2. Reduce the chances of “bad stuff” happening.

While you can see these two objectives expressed in various equations or toolsets or hundreds of different metrics, all of the expressions represent the same two foundation objectives.  Some industries (e.g., gambling, insurance and investment) have evolved more mature tools and techniques to apply the foundations of risk management to their specific industries.  Information risk management has not evolved nearly as well.

What if, despite our acknowledged shortcomings, we could apply information risk management “perfectly” to our enterprise?  What would happen to the existing enterprise information value at risk?  According to the foundation equations of information risk exposure, our information risk would become zero!  And, according to all of the most public of surveys, this is exactly the state we desire.

But, wait!  If we could do information risk management perfectly, what would happen to the total value of the enterprise?  The answer is equally clear: we would not add a single nickel of value to the enterprise!

Somehow, that takes the luster off of the so-called desirable state.  Somehow, pure traditional information risk management doesn’t seem like enough.  Seen through the eyes of senior leaders of business and government enterprises, this outcome falls short of where we need to go today.

Spending “the Other Side of the Coin”
According to the Digital Trust report series there’s another (longstanding) side to this coin of information risk management.  Rather than focus on defense and the preservation of as much existing enterprise value as seems “reasonable,” digital trust applies security technology and services to:

1. Create new value.
2. Increase the chances of “good stuff” happening.

This is referred to in digital trust as “the other side of the coin” for security services and technologies, and points to a whole new strategy for making decisions about security investments.  Furthermore, the digital trust research results show that “you can’t spend just one side of the coin.” That is, by using a digital trust strategy, the information risk exposure reduction is achieved as a beneficial side effect.  Check out all the volumes of the Digital Trust series to see how this strategy works and how others are capturing payoffs.  In particular, scan volumes 1 and 8 (Volume 8 coming soon) for the “quick study” tour.

Digital trust calls on the enterprise to “aim higher” for value creation with security services and technologies, knowing that risk exposure will be reduced as well.  It also calls for a change in the security governance approaches used by the enterprise, especially a change in the assignments and responsibilities assigned to information security leaders.  Digital trust is a learned behavior.

What About Next Year’s “State of Information Security” Report?
As long as we continue to focus on the defense of traditional information risk management, we can expect the next reports on “the state of information security” to show marginal shifts in performance (one way or the other) and to encourage the deployment of different kinds of technologies and practices to deliver marginal improvements in the protection of enterprise value that already exists.  And, since nearly all of our theoretical foundations for risk management (including as applied to information and information services) were discovered and proven during the Renaissance, we have 250 years of evolved behavior and practice to overcome.  (See Peter L. Bernstein’s book, Against the Gods: The Remarkable Story of Risk.)

The annual surveys often note that we measure IT risk management budgets as a percentage of the overall IT budget.  Yet, we find no dependable (and positive) correlation between the percentage assigned and the results achieved.  In fact, in many places we often see attempts to determine just how small that percentage can be before results appear to become measurably worse.

If we want the reports to change, and we want security services and technologies to provide real payoffs to the enterprise, then a digital trust strategy provides a way to go.  Some enterprises are already showing signs of digital trust, and those might be better examples for us to follow than even the most sophisticated applications of traditional risk management.

Aim higher.

Hooray for virtual computing environments!  Freeing the digital enterprise (and users of the digital enterprise) from the shackles of physical platforms and the replication of operating systems and applications everywhere is crucial to capturing the value potential of the “liquid enterprise” (see Volume 5 of the Digital Trust series).  But the payoffs of a liquid enterprise cannot be created and sustained unless there is equally liquid security to flow over, through and around the (newly) liquid digital enterprise.

Liquid security is digital trust when time, place and platform are irrelevant.  As long as digital trust remains “liquid,” then the enterprise can indeed create and capture new value with such techniques as dissolving the intranet altogether, letting users apply their own “consumer IT” for their job, and making all kinds of applications and data usable in all kinds of circumstances, regardless of the networking, platform or support environment.  This is the power of liquid security, and virtual computing technology is one clear contributor to that value creation and capture.  When the right kind of digital trust remains liquid, only the application matters.

Hoping the Phantom Remembers Digital Trust
But, as IBM reminds us, “virtual computing environments still need real security.” To that end, IBM has begun a research initiative named Phantom designed to find and fix security vulnerabilities in virtual computing environments.  Now, such an initiative is laudable.  But it is also reminiscent of the “find and fix” vulnerability programs begun and maintained by every operating system and major application vendor worldwide.  In fact, Tuesdays have assumed a whole new dimension on the weekly calendar with the regular release by Microsoft of patches and fixes to vulnerabilities discovered through its “find and fix” program.

Here’s hoping that the Phantom researchers remember the fundamental reasons for virtualization technology, and especially the value creation and capture possibilities with digital trust (in the form of liquid security).  Otherwise, hypervisors and the “applications” that can operate on specific hypervisors will be in danger of becoming as balkanized as operating systems and their own applications. 

While VMware continues to be the most well known virtual computing environment, Citrix/Xen, Microsoft Hyper-V, Oracle VM, Sun xVM, Parallels and a host of other alternatives are pushing hard for market share.  Integrators are lining up with one or more “virtual vendors” to offer design, installation, applications porting and even complete operating services. 

Furthermore, other levels of virtualization for the liquid enterprise are also great sources of liquid security and subsequent payoffs.  RingCube’s MojoPac and RedCannon’s KeyPoint Access illustrate the value of liquid security without having to become “virtual in the extreme.”

Keep Liquid Security Liquid
So, let’s give a hearty “hurrah” for the Phantom, and let’s remind the Phantom that virtual computing environments need not be burdened with exactly the same kind of “real security” that we’ve plowed into operating systems and applications.  While we are researching the vulnerabilities of virtual computing environments, and planning to insert mechanisms to “lock down” hypervisors and virtual machine monitors, let’s also remember to keep liquid security liquid.

The techniques we use for “real” operating systems and applications have led us to “patch Tuesday” and to platform and configuration dependencies that almost make more problems than they solve.  If we follow exactly the same model for our virtual computing environments, then we’ll no doubt end up with a “virtual Tuesday” patching nightmare, compounding the technology update calendar we already must follow.

Only the application matters … only the application matters … only the application matters …

Hope Springs Eternal for a Measure on Risk
You have to admire the “never say die” spirit of those trying to put a measure on risk.  Hundreds of different kinds of risk ratings, indemnification schemes, fairness guarantees, reputation rankings, test certifications, zero-vulnerability disclosures, insurance criteria, and even “goodness scores” have been tried.  Some of these attempts have succeeded within their own targeted domains (e.g., online Internet commerce), but no single measure works across the entire digital enterprise.  And so, the search for a globally accepted measure of risk continues.  Moody’s Investor Services is the latest to try with its recently announced Vendor Information Risk Rating (VIRR) Service.

This announcement is reminiscent of attempts by insurance companies in the late 1990s to establish a risk threshold measure for e-commerce or hacker/virus policies.  Often offered with what is commonly called a “survey” feature, applicants must undergo a risk assessment of enterprise Web practices and technology to see if their “risk” qualifies for a measure of insurance.  (See this report, which requires that you click the link, scroll to the bottom, and click Resources, then Construction Newsletters, then “Insurance for Internet-Related Risks,” November 8, 1999).

Theoretically, the results of the risk survey determine premiums and coverage.  Companies like AIG, Chubb, Zurich, and various Lloyds underwriters advertise such insurance.  But, their “surveys” are unique to each insurer.  Likewise, at least 10 major insurers offer identity theft insurance, but such insurance requires a survey of sorts as well, and those surveys once again differ.  (See Volume 2 of the Digital Trust report series, Identity Management, p. 23.) So far, all attempts at measuring risk have fallen short.

Turn the Coin Over … Measuring Digital Trust
Volume 7 of the Digital Trust report series, Transparency and Assurance, examines this circumstance not by focusing on the purely defensive strategy of information risk management – i.e., a “risk ranking” – but rather by looking for ways in which value is actually created with a security technology or service – i.e., “digital trust.” Digital trust is the flip side of the information risk management coin. 

By asking the seemingly nonsensical question “How much does digital trust weigh?” Volume 7 shows how digital trust actually has heft, and lists value outcomes that represent measures of payoff to the enterprise.  Digital trust has “weight,” and that weight can be substantial.  The “measure” for digital trust is the enterprise payoff and the payoff potential.  The greater the payoff, the greater (the “heavier”) the measure becomes, and the more value the measure represents.

Measure Without Value?
It’s hard to see how any measure of risk can succeed if it doesn’t carry with it a value for having a “good” measure.  The payoff of having a good VIRR is not disclosed in the Moody’s announcement.  But, it is possible that VIRR can be flipped over to see the digital trust payoff.  If a “better” VIRR attracts customers, or reduces the need for manpower, or satisfies some compliance mandate (like PCI DSS), or even improves the enterprise financial ranking, then we’re likely to see enterprises “warm up” to VIRR.

If not, VIRR is likely to stay pretty cold.

Liquid Security Arrives “Down Under”
The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is Australia’s national science agency and one of the largest and most diverse research agencies in the world.  As Australia’s single largest employer of scientists, CSIRO ventures into research across 17 divisional topics covering everything from entomology to textiles.

On of its latest announcements was TED – the Trust Extension Device .  According to CSIRO, TED “makes trust portable” by creating a miniature trust verification environment consisting of a small operating system, a few applications, and some encrypted data, and then placing that trust environment onto a portable device, such as a USB memory stick or mobile phone.

Plugging the TED into any computing platform then provides a completely isolated computing environment.  That “TED environment” proceeds to establish “trust” with a remote enterprise server before any application runs.  The idea is that both ends of the transaction must prove their identity to each other and provide evidence that the computing environments are what they claim to be.

By making trust “portable” in this way, CSIRO’s TED research has shown again how “liquid security” can create value with security services and technology.  TED is yet another example of Digital Trust that’s been liberated from dependence on time, place or platform – precisely the topic of Volume 5, Liquid Security, in the Digital Trust report series.

Digital Trust Is Already Liquid
As a research organization, CSIRO is now seeking expressions of interest from parties seeking to license their technology.  There are, however, technologies that deliver similar outcomes that are already commercialized and already making digital trust “wet” with value for the enterprise.  Such digital trust technology as RedCannon’s KeyPoint Access, RingCube’s MojoPac, or moka5’s LivePC offer the same category of value creation by making a personal computing environment (including trust properties) “liquid.” They deliver liquid security so you can “put a PC in your pocket” no matter where you are or what’s available to you.  With liquid security only the application matters.

So, whether you decide to dip your technology toes into liquid security with research results like TED, or you choose to dive into value creation with other liquid security technologies that have already surfaced in the commercial market, make sure you consider the full extent of the value that can be created with liquid security.

Bring a towel, and take the plunge with Volume 5 on Liquid Security.

Fly Faster with Digital Trust
Frequent flyers in the US have known for awhile that the Registered Traveler (RT) program, operated by the Transportation Security Administration (TSA), is one good way to capture value in digital trust and “spend it” for convenience and speed. (The Registered Traveler program, and its ability to put a “price” on the value of individual identity carried in digital trust technology, is described in Volume 2, Identity Management, of the Digital Trust report series, p. 19). Personal identifying information needed to accelerate flyers through security lines at selected airports has been valued at about $100 per year by RT program vendors (plus a few dollars for government fees), and about 70,000 users have agreed.

Judging by the number of travelers signing up for the program, the trial phases of the program seem to be successful, and expansion is “in the air.” (No pun intended.) The key to success with the RT program is the ability for individual flyers to volunteer personal background data for background checking (including certain biometric data), and then present unambiguous evidence of their identity in special security screening lines established by security vendors at certain airports.  That evidence is carried in digital credentials, and depends on digital trust technology to deliver the payoff (i.e., speedy and reliable passage through security screening lines).

Competition with Digital Trust
The digital trust payoff for this business has spawned greater and greater competition among vendors who are approved to offer the RT service.  Through 2007, five vendors met TSA’s minimum criteria to offer RT services.  Four of those five were operating services using their selected digital trust mechanisms.  Unfortunately for individual flyers, each vendor has its own digital trust technology for identity evidence and credentials, although all digital trust technology used must meet certain TSA standards (compliance strikes again).  So, flyers enrolled in one approved vendor’s program (at certain airports) cannot participate in another approved vendor’s program (at other airports being serviced).  The specific technologies used to satisfy applicable standards can and do vary.  On the other hand, this is the stuff of competition.

Broadening the Business of Digital Trust in Identity
So far, Verified Identity Pass, with its program called “Clear,” is the top provider.  The others are continuing to operate their programs, but “Clear” remains the leading service.  The digital trust technology used in Clear is a smart ID card.

Yesterday, a new entrant won TSA approval to operate an RT service. Priva Technologies is entering the market with its “ClearedKey” (or just “Cleared”) service.  Priva supplies their digital trust using its Cleared Security Platform that combines a token with a fingerprint reader.  Moreover, Priva intends for “Cleared” to compete with more than just better prices.  In fact, Priva intends to offer storage for an electronic ticket, an option for electronic “coupons” for free beverages or other items that fliers may want, and perhaps even a combination with its broader retail shopping and payment solution.  Who knows?!  The same digital trust technology used to speed you through a security line at an airport might also help you to buy clothes or lunch!

“Tense” Matters
Flyers now must pay attention to the “tense” of their RT program!  Both “Clear” and “Cleared” (as well as rtGO and FlyBy) provide digital trust to deliver a payoff of convenience and speed for travelers who value such convenience enough to pay for it.  Users of any of those vendor services move quickly through a security line at an airport.  But, read the signs carefully.  Being in the “Clear” to board is not the same as being “Cleared” for takeoff, at least not as far as the digital trust technology is concerned!