I hope you’re watching the announcements about security as they fly onto your workstation through email, RSS and various postings.  Every week there is a new “discovery” about the need for security services and technology to help create value for the enterprise.  Just this week there are two powerful reminders (and it’s only Tuesday)!  In both cases, the message of Digital Trust is echoed over and over.  In particular, these announcements reinforce three of the four strategic conclusions of the Digital Trust research program as reported in Volume 8, the final volume of the Digital Trust report series:

* First, digital trust is real.  The presence (or absence) of digital trust has real, direct impact on the ability of the enterprise to achieve competitive advantage and “make business happen.”  The findings of the third quarter 2008 Online Customer Respect Study of life insurance industry Web sites has a specific warning about the impact of a lack of (digital) trust for this industry.

* Second, aim high and first with a digital trust strategy to get the payoffs.  In a summary report from the Security for Business Innovation Council, published earlier this year by RSA, 10 security leaders from different industry sectors have declared that security teams must now become “full partners in the business innovation process.”  When you read further, you will discover that this is their way of saying “apply a digital trust strategy.”  In the words of the press release, “In this landscape, the security focus must move from solely mitigating risk to also maximizing business reward.”

* Third, security governance structures prevent digital trust strategies from being used more widely.  A more recent companion report also published by RSA tries to develop and explain a “risk/reward equation” based on a foundation of enterprise information risk management.  Once again each of the 10 council members offers his or her advice about how to maximize the returns from such a strategy.  Compare this to the foundation equations of digital trust presented in Volume 1 of the Digital Trust report series (see “Not Your Father’s Information Risk Management” on p. 6), and to the results shown over and over in each of the succeeding volumes.  (All Digital Trust volumes can be found here.)  There are some important differences between the two in just what “value” is targeted, but both insist on an organizational and governance structure that makes security teams aware of business objectives (not just operational objectives) and assigns them the responsibility for attention to value in prioritizing security actions.

Ten “thumbs up” for digital trust
RSA established a Security for Business Innovation Council in 2008.  The membership was selected by RSA from among security executives representing companies that had extensive security programs, regulatory issues, substantial investment in intellectual property, and an acknowledgement that “information security needs to be part of their business innovation process, ” as the summary report said.  Interviews with each of the 10 executives led to the conclusions of the first (summary) report and recommendations about risk/reward in the second report. 

In quote after quote from each of the 10 members in their first report, obligations to recognize business impact and (at least) not hinder business operation unnecessarily are promoted.  It’s a very tiny step between the words of the council members and the conclusions and recommendations of Digital Trust.

In the second report, the council members promote an “information risk management” methodology as a way of balancing risk/reward for information security.  While it does move security service away from being an innovation inhibitor, it still falls short of the digital trust reality (and equations) that include and account for enterprise value creation with security services and technology rather than incremental (even cost justified) reductions in risk exposure over enterprise value that already exists.  Despite this difference, there is strong and compelling agreement on the need to rearrange IT security/risk governance so that the security teams are directly connected to business objectives and value targets.  Only then can they more fully contribute to innovation within the enterprise.

A digital trust deficit for the life insurance industry
The Customer Respect Group “measures and reports on the behavior of corporate websites in relation to the treatment of the online customer and their personal data.” (www.customerrespect.com)  As part of this measurement, the Customer Respect Group has invented a Customer Respect Index (CRI) rating.  For the past five years, the Customer Respect Group has reviewed and measured corporate Web sites, including life insurance industry Web sites.

While this latest study indicates that at least some life insurance Web sites have begun to improve their performance according to the CRI, the study also lists two items as its “most surprising results.”  One has to do with the speed of innovation.  The other, however, is listed as “not enough emphasis on trust.”  Since the study is based on an examination of Web sites (in this case insurance company Web sites), the kind of trust deficit being declared is a digital trust deficit.  And, that deficit is penalizing life insurance companies by limiting leads for offline business.

Despite the generally weak CRI scores of life insurance companies, five companies were noted as making good improvements. The top five life insurance Web sites and their CRI scores (10 is best) are:

—Western & Southern Life (7.7)
—Nationwide (6.7)
—Metropolitan Life (6.7)
—New York Life (6.4)
—Principal Financial (6.4)

In the Digital Trust report series, Volume 7, “Transparency and Assurance,” examines how digital trust can be created, conveyed, lost and reclaimed.  Although four main techniques for the creation of digital trust are explored, special attention is given to the topic of digital trust creation for Web sites.  Even though the five insurance companies listed have begun to rise on the CRI ranking ladder, digital trust creation techniques are readily evident in only two of them (Nationwide and Principal Financial).  Even then, their use of those techniques falls short of the best applications as described in the digital trust reports.

There’s sure room for more value creation with digital trust in insurance company Web sites.  I wonder what the rankings could be if digital trust techniques were applied thoroughly?!

The sound of digital trust on the move
Can you hear it?  The sounds of digital trust and digital trust strategies are getting louder and louder as they move forward into more widespread application, with the recognition that security services and technology can, indeed, create value for the enterprise.  Be sure your enterprise “hops on board” before the last digital trust cars leave the station.

“Trust” Means …?
“Trust” is a gut word.  It’s one of those words we use all the time, but often struggle to define in the context of its use.  When asked about exactly what we mean, we often mumble through some confused description that often includes such words as “assurance,” “belief,” “confidence,” “faith,” “reliance,” “reliability” or even “security” as we try to invoke an empathic nod from listeners.

We love this word.  It has the power to evoke an approving response in all kinds of circumstances, even if we don’t exactly know what we mean!  For example, banks have historically had “trust” as part of their name (e.g., SunTrust Bank, Pacific Trust Bank, California Bank and Trust, Branch Banking and Trust) to help us feel confident in letting them hold and manage our money.  Today, that application of the word “trust” has been adopted by dozens and dozens of technology and Internet companies as part of their company name, invoking the power of the word “trust” to support presumed market predispositions.  (See Volume 1 or Volume 7 of the Digital Trust report series for a sample of companies using “trust” in their name.)

For a long time we have acknowledged the important sociological and psychological dimensions of the word “trust” and the ability to apply trust as a “quality” for people or institutions.  But, even in this application, we are not quite sure what we mean.  And, we have a lot of choices.  For example, Google reports more than 27,000 “hits” when a search for “definition of trust” is pursued!

Uncopyable?!
In an essay in “The Technium” called “Better Than Free,” Kevin Kelly uses “trust” as an example of a quality (of a person or enterprise) that is intangible and uncopyable, and which therefore can have value in a network economy that copies everything over and over and thereby makes things “worthless.”  He goes on to name eight values (qualities), not including trust, as attributes that cannot be copied, and which therefore add value to free copies … making the copies “better than free.”  It is an interesting point of view, and certainly worthy of reading.

Digital Trust Value for Real
Notwithstanding the soft claims of value for intangible, uncopyable qualities (even including trust), there is a trust contributor that delivers a real, measurable payoff in new value created through security services and technology.  This is the trust created and delivered by security technology and service.  This is digital trust as defined by the Digital Trust research program and report volumes.  (See all the Digital Trust volumes here.)  Specifically, digital trust is evidence-based confidence that systems operate as advertised, and that no unadvertised functions are occurring.  It is:

*  Announced with features and functions.
*  Completed with life cycle characteristics of design, development, deployment and operation.
*  Capable of value creation beyond a reduction in the risk of loss.

Digital trust is an important contributor to the full fabric of trust in any context.  But, when examined by itself, digital trust contradicts popular notions about how trust is created, conveyed and valued.  Unlike the “uncopyable” quality that is described in Kevin Kelly’s essay, we find that:

*  Digital trust is hard, real and quantifiable.  It measurably affects both speed and cost, and can create value in other ways as well.
*  Digital trust is fast.  In fact, “nothing is as fast as the speed of digital trust.” [1]
*  Digital trust can be purchased (with money and effort) in at least four ways as seen in Volume 7 of the Digital Trust report series (see “How Much Does Digital Trust Weigh?” on pages 2-5).

Better Than “Better Than Free”
So, “better than free” is certainly an attractive notion to contemplate.  But, once we know what digital trust really is, the value that can be created, conveyed and sustained with digital trust is even better than that!

—————————————————-

1 This phrase is adapted from the original “Nothing is as fast as the speed of trust” as seen in Stephen M.R. Covey, The Speed of Trust (New York: Simon & Schuster, 2006).

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.