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Industry Report

Industry reports, briefs and video-clips issued by Samsung Economic Research Institute

Security Issues Shake up Computing Services

Security Issues Shake up Computing Services

JANG Sung-Won

June 23, 2011

Transcript

Welcome to our video program. I'm Sung-Won Jang from the Industry and Strategy Department I.

Recently, there have been major incidences of hacking at global companies of the US and Japan, who suffered serious computing problems as a result.

For example, a hack on Sony PlayStation Network caused a suspension of Sony Online Entertainment services and a leak of more than 100 million user identities; an outage at Amazon's cloud computing center derailed several websites which use the service including Foursquare and Quora; and 500,000 Google Gmail accounts, emails and contact lists were deleted in February 2011. In June, millions of Gmail users were hacked.

Hackers, who have seldom caused such controversy, are launching major cyber attacks on global companies. The issue becomes even more serious as the use of cloud computing, which refers to the use and access of server-based computational resources, becomes more widespread. As a consequence, users are becoming more concerned over the security of computing services and possible identity theft.

Therefore, I'd like to talk about issues of computing services such as hacking, as well as errors and solutions.

Firstly, cloud computing allows users to store data on the web and has drawn attention due to its convenience. However, Sony was made vulnerable to an attack because of its cloud based system. And ironically, hackers borrowed Amazon's cloud server to steal user information.

Indeed, by storing information on someone else's cloud space, users are freed from complex and dull data management. However, they may suffer serious losses when their information is deleted or they are denied access due to system problems. In particular, if cloud service becomes more common, the large amount of collected information will attract hackers, possibly causing an “IT catastrophe.”

Meanwhile, a surge in the use of smartphones has raised concerns over mobile security. According to US computer security company, McAfee, malicious software, or malware, which attacks mobile devices soared 46% in 2010 from the previous year. Like personal computers, smartphones are emerging as a main source for the spread of malware.

When a smartphone is infected, it can be used to illegally obtain information, tamper with data and transfer money. These days, corporate secrets are more likely to be disclosed as smartphones are increasingly used among businesses as well as individuals.

Hacking is not just a problem for global companies but could happen to any company. Moreover, as no computing system is perfect, security issues can continuously occur.

To respond to security issues, first, companies need information gathering abilities. They need to monitor how they are viewed on the Internet and collect data to prepare for randomly emerging risks.

Second, companies need to establish a fast reporting system. As hacking takes place in large numbers in a short period of time, a complex reporting system may delay response time and make the problem worse. Therefore, they need to revamp their systems so that a security breach is immediately reported directly to the decision maker.

Third, companies need to cooperate with other companies and the government. Hacking targets a broad range of areas and transcends industrial boundaries therefore a collaborated effort by several companies is more effective. EMC, Cisco and VMware formed a coalition for cyber security, establishing “Vblocks” and announced they would cooperate to defend themselves from future hacking.

Cooperation with the government is also important. In May, Japan's Ministry of Economy, Trade and Industry decided on a cooperative response against hacking, building a cooperative body with 20 IT companies including NTT and Fujitsu. And the US Federal Trade Commission established regulations and an assessment system to protect personal information on the Internet, regularly checking company security guidelines.

According to Russian computer security company, Kaspersky Lab, a total of 250 million customers suffered from malware attacks in the first quarter of 2011. Those affected were not only IT companies such as Sony, Amazon and Google but also defense contractor Lockheed Martin and auto maker Honda. As such, targets include various industries and the goal of the hackers range from gaining personal information to classified technology. And they do not just infiltrate certain websites and extract information for fun. Now, they are launching massive cyber attacks on companies for political and economic reasons.

Currently, technology is developing at an exponential rate. However, technological development without assurances of security is doomed. In addition, a security breach leaves not only the impression that the company has technological loopholes, but raises trust issues about the company. Therefore, companies need to make their utmost efforts to establish a thorough security system.

Thank you for watching. I'm Sung-Won Jang.

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