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How Seriously Should You Take Threats to Network Security?

The first step in understanding computer and network security is to formulate a realistic assessment of the threats to those systems. You will need a clear picture of the dangers in order to adequately prepare a defense. There seem to be two extreme attitudes regarding computer security. The first group assumes there is no real threat. Subscribers to this belief feel that there is little real danger to computer systems and that much of the negative news is simply unwarranted panic. They often believe taking only minimal security precautions should ensure the safety of their systems. The prevailing sentiment is, if our organization has not been attacked so far, we must be secure. If decision makers subscribe to this point of view, they tend to push a reactive approach to security. They will wait to address security issues until an incident occurs—the proverbial “closing the barn door after the horse has already gotten out.” If you are fortunate, the incident will have only minor impact on your organization and will serve as a much-needed wakeup call. If you are unfortunate, then your organization may face serious and possible catastrophic consequences. One major goal of this book is to encourage a proactive approach to security.

People who subscribe to the opposite viewpoint overestimate the dangers. They tend to assume that numerous talented hackers are an imminent threat to their system. They may believe that any teenager with a laptop can traverse highly secure systems at will. Such a worldview makes excellent movie plots, but it is simply unrealistic. The reality is that many people who call themselves hackers are less knowledgeable than they think they are. These people have a low probability of being able to compromise any system that has implemented even moderate security precautions.

This does not mean that skillful hackers do not exist, of course. However, they must balance the costs (financial, time) against the rewards (ideological, monetary). “Good” hackers tend to target systems that yield the highest rewards. If a hacker doesn’t perceive your system as beneficial to these goals, he is less likely to expend the resources to compromise your system. It is also important to understand that real intrusions into a network take time and effort. Hacking is not the dramatic process you see in movies. I often teach courses in hacking and penetration testing, and students are usually surprised to find that the process is actually a bit tedious and requires patience.

Both extremes of attitudes regarding the dangers to computer systems are inaccurate. It is certainly true that there are people who have the understanding of computer systems and the skills to compromise the security of many, if not most, systems. A number of people who call themselves hackers, though, are not as skilled as they claim to be. They have ascertained a few buzzwords from the Internet and may be convinced of their own digital supremacy, but they are not able to affect any real compromises to even a moderately secure system.

The truly talented hacker is no more common than the truly talented concert pianist. Consider how many people take piano lessons at some point in their lives. Now consider how many of those ever truly become virtuosos. The same is true of computer hackers. There are many people with mediocre skills, but truly skilled hackers are not terribly common. Keep in mind that even those who do possess the requisite skills need to be motivated to expend the time and effort to compromise your system.

A better way to assess the threat level to your system is to weigh the attractiveness of your system to potential intruders against the security measures in place. This is the essence of threat analysis. You examine your risks, vulnerabilities, and threats in order to decide where to put the most effort in cybersecurity.

Keep in mind, too, that the greatest external threat to any system is not hackers but malware and denial of service (DoS) attacks. Malware includes viruses, worms, Trojan horses, and logic bombs. And beyond the external attacks, there is the issue of internal problems due to malfeasance or simple ignorance.

Security audits always begin with a risk assessment, and that is what we are describing here. First you need to identify your assets. Clearly, the actual computers, routers, switches and other devices that make up your network are assets. But it is more likely that your most important assets lie in the information on your network. Identifying assets begins with evaluating the information your network stores and its value. Does your network contain personal information for bank accounts? Perhaps medical information, health care records? In other cases, your network might contain intellectual property, trade secrets, or even classified military data.

Once you have identified the assets, you need to take inventory of the threats to your assets. Certainly, any threat is possible, but some are more likely than others. This is very much like what one does when selecting home insurance. If you live in a flood plain, then flood insurance is critical. If you live at a high altitude in a desert, it may be less critical. We do the same thing with our data. If you are working for a defense contractor, then foreign state-sponsored hackers are a significant threat. However, if you are the network administrator for a school district, then your greatest threat is likely to be juveniles attempting to breach the network. It is always important to realize what the threats are for your network.

Once you have identified your assets and inventoried the threats, you need to find out what vulnerabilities your system has. Every system has vulnerabilities. Identifying your network’s specific vulnerabilities is a major part of risk assessment.

The knowledge of your assets, threats, and vulnerabilities will give you the information needed to decide what security measures are appropriate for your network. You will always have budget constraints, so you need to make wise decisions in selecting security controls. Using good risk assessment is how you make wise security decisions.

There are methods and formulas for quantifying risk. A few simple formulas are provided here. In order to calculate the loss from a single incident, you multiply the asset value by the percentage of that asset that is exposed:

  • Single Loss Expectancy (SLE) = Asset Value (AV) × Exposure Factor (EF)

What this formula means is that in order to calculate the loss from a single incident, you start with the asset value, and multiple that times what percentage of that asset is exposed. Let us assume you have a laptop that was purchased for $1000. It has depreciated by 20%, meaning there is 80% of its value left. If that laptop is lost or stolen, $1000 (AV) × .8 (EV) = $800 (SLE). Now this is rather oversimplified and does not account for the value of the data. But it does illustrate the point of the formula. Now to go forward and calculate the loss per year, you use the following formula:

  • Annualized Loss Expectancy (ALE) = Single Loss Expectancy (SLE) × Annual Rate of Occurrence (ARO)

Using the previous SLE of $800, if you expect to lose 3 laptops per year, then the ARO = $800 × 3, or $2400.

Obviously, these formulas have some subjectiveness to them. (For example, ARO is usually estimated from industry trends and past incidents.) But they can help you to understand the risk you have. This will help to guide you in determining what resources to allocate to addressing the risk.

Once you have identified a risk, you really have only four choices:

  • Acceptance: This means you find the impact of the risk to be less than the cost of addressing it, or the probability is so remote that you do nothing. This is not the most common approach but is appropriate in some scenarios.

  • Avoidance: This means ensuring that there is zero chance of the risk occurring. If you are concerned about a virus being introduced to your network via USB and you shut down all USB ports, you have avoided the risk.

  • Transference: This involves transferring responsibility for the damages should the risk be realized. This is commonly done via cyber threat insurance.

  • Mitigation: With this approach, which is the most common approach, you take steps to reduce either the likelihood of the event occurring or the impact. For example, if you are concerned about computer viruses, you might mitigate that via antivirus software and policies about attachments and links.

This is basic risk assessment. Before spending resources to address a threat, you must do this type of basic threat assessment. How likely is the threat to be realized? If it is realized, how much damage would it cause you? For example, I personally don’t employ any security on my website. Yes, someone could hack it, but if they did, the impact would be negligible. There is no data on that website at all—no database back end, no files, no logins, and so on. The only information on the website is information I freely give to anyone, without even recording who gets the information. Thus, for this website, the impact of a breach is only negligible, thus making expenditure of resources on security unacceptable. At the other extreme are major e-commerce sites. These sites invest a great deal of resources on security because breach of such a website would immediately cost significant money and damage the organization’s reputation in the long term.

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