NBA 600: Session 22Security and Privacy

Networked World10 April 2003

Daniel Huttenlocher

2

Schedule For Rest of Term

Privacy and security (finish up today) Large networks (today and week of 4/14)

– Positive feedback effects– Small worlds phenomena– Smart mobs

Emerging technologies (week of 4/21)– Web services: J2EE and .Net

• Vision of Web-based business

– RFID – smart tags

Final project presentations (week of 4/28)

3

Today’s Class

Finish topic of security– Malicious code (“malware”)

• Viruses, worms, Trojan horses

– Protecting your business• Differences between security in online

networked and offline physical worlds

Start topic of large networks– Physical, electronic, social and other networks

• Scientific, technical and business implications

– Certain properties that can be understood in terms of network structure/dynamics

4

Malicious Code (“Malware”)

Dates back to early days of computing– Often as pranks, or to demonstrate possibilities

Some terminology– Virus: hidden program or piece of code that

“infects” some other program or file causing an unexpected, usually negative, result

– Worm: independent program that actively duplicates itself

– Trojan horse: malicious program that pretends to be a benign application• Generally must be deliberately installed

5

Spreading Viruses

Most viruses today are scripts or macros that infect files or email– Because files and email are commonly

exchanged between people• Such viruses spread more quickly than other

means such as sharing programs

Viruses are always created by someone who intends to do harm– Often based on “templates”, so many similar

Virus scanners must be updated for each new virus, impossible to predict new ones

6

Current Virus Prevention

Email filters that examine both incoming and outgoing email– Remove known viruses, automatically update– Replicate via address book or sent items

Scans of file systems for infected programs and files

Still can get “bitten” by new ones– Opening attachments can be dangerous

• Even if from someone you know because they may be infected

– Even viewing email in auto-preview panes can be problematic

7

Worms and Trojan Horses

Less prevalent because harder to spread Worms tend to exploit flaws in servers

– Usually “buffer overflow” which allows code sent over network to be executed• Think of someone blindly following a recipe and

you can insert new steps they simply follow

– Recent one was Microsoft SQL server “slammer” worm• Widespread effect this past January

Trojan horses install unknown functionality– All downloaded programs a risk this way

8

Protecting Your Business

Need good technology but not enough– Should be easy to use and fit with work

processes– Need to instill importance in employees and

have them contribute to security not evade

View computer and network security as a senior management issue– Policies set by CIO/CTO but agreed to and

followed by all senior managers– Likely to have more impact on employees and

business than physical security

9

Some Security Rules of Thumb

Basic technology policies– Keep software patches up to date on all

externally accessible and critical systems• According to CERT prevents 95% of intrusions

– Use automatically updating anti-virus software– Use firewalls and network loggers– Have regular, automated, offsite backups

• Periodically test that restores work

Basic personnel policies– Information security is everyone’s

responsibility, broadly educate employees

10

Passwords

Particularly difficult balance between security and usability– One-time token systems can help

External access particularly problematic– Wide range of remote attackers

Most passwords easy to crack– E.g., Dictionary lookups in matter of minutes– Even all possible 7 character passwords can be

tried in a few weeks

But policies can make worse

11

Microsoft Trustworthy Computing

Initiative launched in early 2002– Across all product groups– Active involvement of research and academics

Goals are to provide– Security– Privacy– Reliability– Business Integrity– Products and services using software that are

as trustworthy as those using electricity• Took electric industry from 1880’s-1920’s

12

Trustworthy Computing Goals

Security– Systems that are resilient to attack and protect

confidentiality, integrity and availability

Privacy– Customer able to control data about

themselves and those using data adhere to “fair information” principles

Reliability– Customer can depend on product to fulfill its

functions when required to do so

Business integrity– Vendor behaves responsively and responsibly

13

Trustworthy Computing Means

Secure by design, by default and in deployment

Fair information principles– User data only collected or shared with consent

Availability – ready for use Manageability

– Easy to install and manage; scalable

Accuracy – functions correctly Usability – easy to use and suited to needs Responsiveness and transparency of firm

14

Some Main Players in Security

VeriSign (VRSN)– Digital trust services– $1.2B/yr revenue, up 24% y-o-y (acquisition)– $2.3B market cap

CheckPoint Software (CHKP)– Firewalls– $427M/yr revenue, down 19% y-o-y– $3.9B market cap

RSA Security (RSAS)– E-Security solutions (e.g., secureID)– $230M/yr revenue, down 18% y-o-y– $420M market cap

15

Large Networks

Networks underlying many aspects of both technological and social systems– Relationships: suppliers, customers, personal– Connectivity: supply chains, information

systems, online payment and delivery

Networks have some properties that are very different from “collections”– E.g., bell curve or normal distribution

• Height, weight, grades• Not incomes!

– Networks generally follow different distribution known as power law

16

Properties of Large Networks

Positive feedback– Supply side economies of scale– Demand side economies of scale

• Often referred to as network effects

Tipping points Power law distributions Small worlds phenomena

– Power of long-range “random” connections

Evolution of networks Reputation in networks – “smart mobs”

17

Positive Feedback

Supply side economies of scale– Marginal cost less than average cost

• Anything with high fixed cost, e.g., airline seats

– Information goods: (near) zero marginal cost

Demand side economies of scale– Network effects – value higher with more users– Physical and electronic networks

• E.g., phone system (first one studied)• Fax, email, IM, Web

– Societal networks• Software, VHS tapes, CDs, DVDs

18

Positive Feedback Effects

“Tippy” markets– Sudden switch to strong get stronger, weak get

weaker

Winner take all markets– E.g., VHS vs. Betamax

Dominant player markets– E.g., Windows-Intel vs. Apple

Standards-based markets– Telecommunications: phones and Internet

Negative feedback– Can have stabilizing effect – multiple players

19

Network Effects

Metcalfe’s law– Value of network proportional to square of its

number of users – n2

• Value to each user is (proportional to) n• Times n users

Physical and electronic networks– E.g., phone system

• Value proportional to number of people reachable by phone

– Communication networks in general– Tendency towards single provider or standard

20

Societal Networks

Some non-networked goods exhibit network effects– Consumer software in general

• More valuable when someone you know can help explain it to you

Windows, TurboTax, etc.

• “Network” of know-how

– Stronger effect when software used to create documents• Word, Excel, Powerpoint, Acrobat• Inter-operability or standards issues important• “Network” of document exchange

21

Number of Players

Single vendor/provider– Long distance (pre ATT breakup)– ATT connected their own local exchanges

• Enough local share to dominate long distance and lead to further aggregation

Interoperability among vendors/providers– Standards

• Internet has many providers all using common hardware and software standards

– Licensing• CD’s have many vendors all licensing common

standard from Philips

22

Web Browsers

Substantial network effects– Easier for site developers to have one browser

or rock solid standard• Complex and (was) rapidly changing

True standards difficult to develop and maintain

Microsoft realized this and didn’t want to be the marginalized platform– In addition to bundling IE with the OS worked

hard to be compatible with market leader• IE 4 produced pages more similar to Netscape 3

than Netscape 4 did

23

Lock In

Particularly high switching costs for products/services with network effects– Value of alternative lower until many users

• Decade-long transitions to new kinds of media E.g., vinyl to cassette to CD

• Difficulty for non-Microsoft Office software

Antitrust concerns specifically address network effects and resulting lock-in– E.g., AOL barred from upgrades to instant

messenger service unless interoperate with competitors

24

Tipping Points

Malcolm Gladwell’s book Sudden changes that result from

seemingly small differences– Crime rates and policing– Epidemics of disease– Dominance of VHS over Betamax

Often underlying networks can provide some insight– Connections between people in spread of

disease, ideas, behaviors

25

Dominant Player or Standard

Chances of tipping

Low High

Low LOW UNCLEAR

High NOT SOHIGH(airlines)

HIGH(telecom)

Economies of Scale

NetworkEffects

26

Network Effects and IM

In 1999 AOL had near 100% of instant messenger market– With AIM and ICQ combined

In AOL Time Warner merger FCC prohibited advanced IM services such as video– Unless AOL opened up its services to

interoperate with other providers

AOL now about 48% of market, petitioning FCC to drop restriction– Claim no longer risk of “tipping”– MSN (29%) and Yahoo (23%) have added

advanced services such as video

27

Causing Positive Feedback

Compatibility, inter-operability, standards– Ease consumer adoption– Multiple competitors, though not necessarily

anyone– Potentially give up some performance– Backward compatibility (e.g., dual band phones)

Going it alone– A “10x” product (Andy Grove)

• Much better than alternatives to help get over switching cost hurdle

– E.g., video game manufacturers

28

Openness vs. Control

How much added value overall and share you can capture

Value added depends on– Product itself– Size of network

Your share depends on– Ability to capture the value– How open

• Resulting degree of competition

– Alliance vs. full openness

29

No Guarantees

Customers value larger networks– How much depends on product/service

Expectations of who will win critical Tradeoff of openness vs. control Various strategies

– Standards• Room for innovation?

– Nearly identical technologies– Proprietary technologies

• Consortium – more control than with standards• Going it alone – high risk/reward