2009 Security Mega Trends & Emerging Threats

2009 Security Mega Trends Survey Independently conducted by Ponemon Institute LLC November 2008 Sponsored by : Page 1 Ponemon Institute© Private & Confidential Document

About the study • The 2009 Security Mega Trends Survey was conducted by Ponemon Institute and sponsored by Lumension to better understand if certain publicized IT risks to personal and confidential data are or should be more or less of a concern for organizations. • We asked respondents in IT operations and IT security to consider how eight Security Mega Trends affect organizations today and during the next 12 to 24 months. • Based on interviews with IT experts in operations and information security, we selected the following eight Mega Trends for this study: cloud computing, virtualization, mobility and mobile devices, cyber crime, outsourcing to third parties, data breaches and the risk of identity theft, peer-to-peer file sharing and Web 2.0 Sponsored by : Page 2 Ponemon Institute© Private & Confidential Document

Security Mega Trends Mega Trend 1: Cloud computing • Cloud computing refers to distributed computing solutions owned by third-parties on data center locations outside the end-user company’s IT infrastructure. The demand for cloud computing is expanding quickly, especially as the cost of remote connectivity decreases. Mega Trend 2: Virtualization • Virtualization technology allows end-users to access multiple secure networks from a single computer, wherein the PC or laptop essentially acts as a hardware authentication token. With one computer, the end-user is able to gain access to separate virtual devices or machines. Virtualization makes server and operating system deployments more flexible and improves the use of storage and systems resources. Mega Trend 3: Mobility • Organizations are dependent upon a mobile workforce with access to information no matter where they work or travel. Employees can use the following mobile devices when they travel or work at home: laptops, VPNs, PDAs, cell phones and memory sticks. The opportunity to work from home or other locations is a benefit to many employees. In addition, mobility can increase employees’ productivity and as a result improve the organization’s bottom line. Sponsored by : Page 3 Ponemon Institute© Private & Confidential Document

Security Mega Trends Mega Trend 4: The external threat of organized cyber criminal syndicates • The black market for personal records makes data theft an attractive crime for thieves around the world. Cyber crime usually describes criminal activity in which the computer or network is an essential part of the illegal criminal activity. This term also is used to include traditional crimes in which computers or networks are used to enable the illicit activity. Mega Trend 5: Outsourcing to third parties • Organizations outsource sensitive and confidential customer and employee data to vendors and other third parties to reduce processing costs and improve operating efficiencies. These purposes can include (but are not limited to): marketing and sales campaigns, software application development, call center operations, and mortgage and other credit application processing. Mega Trend 6: Data breaches involving personal information are increasing • The Federal Trade Commission reports that the number one consumer complaint it receives concerns the theft of identity. It addition to potential fines, organizations risk the loss of customer confidence and trust. Some experts believe that identity theft crimes will increase substantially over the next several years. Sponsored by : Page 4 Ponemon Institute© Private & Confidential Document

Security Mega Trends Mega Trend 7: Peer-to-peer file sharing • P2P file sharing networks allow a group of computers to connect with each other and directly access files from one another's hard drives. P2P file sharing networks started with Napster by enabling Internet users to share music files. P2P file-sharing networks can cause inadvertent transfers and disclosures of documents that reside on an organization’s computers and laptops. File sharing networks where inadvertent file sharing typically occurs include networks. For example, a sales representative downloads a peer-to-peer music sharing application onto his company assigned notebook computer. This P2P file sharing network exposes confidential business documents contained on his computer. Mega Trend 8: Web 2.0 • Web 2.0 refers to a plethora of Internet tools that enhance information sharing and collaboration among users. These concepts have led to the evolution of web-based communities and hosted services, such as social networking sites, wikis and blogs. This term does not refer to an update to any technical. Unsupervised monitoring of employees’ use of Web 2.0 applications can result in the loss of critical confidential business data on the Internet. The other risk is that damaging information can be posted about an organization that can negatively affect its reputation. Sponsored by : Page 5 Ponemon Institute© Private & Confidential Document

Two Samples • Our study utilized two separate sampling frames (panels) built from conference, association and professional certification lists. Sample description IT Operations IT Security • Web-based survey responses were captured on a secure extranet platform. Total sampling frames 14,518 11,506 • We utilized two separate samples of U.S. participants: Bounce-back 3,957 2,109 – IT operations: 825 (5.7% response) – IT security: 577 (5.0% response) Total returns 915 658 • Less than 1% rejection rate because of reliability failures. Rejected surveys 90 81 • Respondents in both groups were asked to complete the same survey instrument. Final sample 825 577 • Margin of error is ≤ 3% on all adjective or yes/no responses for both samples Response rate 5.7% 5.0% Sponsored by : Page 6 Ponemon Institute© Private & Confidential Document

The Survey Example: Cloud Computing Mega Trend 1: Cloud computing Cloud computing refers to distributed computing solutions owned by third-parties on data center locations outside the end-user company’s IT infrastructure. Consumers of cloud computing services purchase capacity on-demand and are not concerned with the underlying technologies used to increase computing capacity. The demand for cloud computing is expanding quickly, especially as the cost of remote connectivity decreases. The services that can be delivered from the cloud have expanded Web applications to include storage, raw computing capability, and access to any number of specialized applications or services. Q1a. How familiar are you with cloud computing? Very familiar Familiar Not familiar Q1b. Does your organization access cloud computing resources or applications? Yes No Unsure Sponsored by : Page 7 Ponemon Institute© Private & Confidential Document

The Survey – Continued Example: Cloud Computing What are the security implications? Experts say the use of cloud computing increases information security risks because the end-user’s organization is unable to control the data management environment. • Q1c. Do you believe that cloud computing increases the information security risks within your company? Yes No (Go to Q2a) Q1d. If yes, what is the most significant security risk associated with cloud computing? Please check only one choice: Inability to assess or verify the security of data centers in the cloud Inability to protect sensitive or confidential information Inability to restrict or limit use of cloud computing resources or applications Third parties might be able to access private files without authorization Information may not be properly backed up Downtime as a result of cloud computing failure Other (please specify) Sponsored by : Page 8 Ponemon Institute© Private & Confidential Document

The Survey – Continued Example: Cloud Computing Mega Trend 1: Cloud computing Q1e. If yes, please rate the security risk presented by cloud computing within your organization today. Very low Low Moderate High Very high Q1e. If yes, please rate the security risk presented by cloud computing in your organization within the next 12 to 24 months. Very low Low Moderate High Very high Sponsored by : Page 9 Ponemon Institute© Private & Confidential Document

Mega Trends Comparison of IT Operations and IT Security Samples – Current Outlook Line Graph 1a Security mega trends as perceived today for both samples Each point reflects the percentage responses for very high or high security risks at presentt 70% 60% 50% 40% 30% 20% 10% 0% Cloud Virt ualization M obility M obile devices Cyber crime Outsourcing Data breach P2P file sharing Web 2.0 M alware computing IT Operations IT Security Sponsored by : Page 10 Ponemon Institute© Private & Confidential Document

Mega Trends Comparison of IT Operations and IT Security Samples – Future Outlook Line Graph 1b Security mega trends as perceived 12 to 24 months for both samples Each point reflects the percentage responses for very high or high security risks at presentt 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Cloud Virt ualization M obility M obile devices Cyber crime Outsourcing Data breach P2P file sharing Web 2.0 M alware computing IT Operations IT Security Sponsored by : Page 11 Ponemon Institute© Private & Confidential Document

IT Operations Mega trend risk rating today and 12 to 24 months in the future Bar Chart 1a Mega trends today and in the next 12 to 24 months by respondents in IT operations Each bar summarizes the combined percentage response for quot;Very Highquot; and quot;Highquot; security risks. Outsourcing 50% 50% Mobile devices 45% 48% Cyber crime 49% 47% Mobility 47% 47% Data breach 40% 44% Cloud computing 42% 39% P2P file sharing 36% 35% Web 2.0 35% 31% Virtualization 18% 25% Malware 24% 22% 0% 10% 20% 30% 40% 50% 60% Risk as perceived today Risk as perceived in the next 12 to 24 months Sponsored by : Page 12 Ponemon Institute© Private & Confidential Document

IT Security Mega trend risk rating today and 12 to 24 months in the future Bar Chart 1b Mega trends today and in the next 12 to 24 months by respondents in IT security Each bar summarizes the combined percentage response for quot;Very Highquot; and quot;Highquot; security risks. Data breach 65% 66% Cyber crime 77% 65% Mobility 48% 60% Outsourcing 59% 59% Cloud computing 61% 58% Mobile devices 50% 48% P2P file sharing 44% 46% Web 2.0 41% 39% Malware 41% 39% Virtualization 25% 29% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Risk as perceived today Risk as perceived in the next 12 to 24 months Sponsored by : Page 13 Ponemon Institute© Private & Confidential Document

Mega Trend: Outsourcing Causes Data Breach Bar Chart 2 Security risks due to outsourcing Each bar is the percentage of respondents who selected the noted information security risk Sensitive or confidential information may not be properly 60% protected 56% Unauthorized parties might be able to access private files 32% without authorization 23% 4% Increased threat of social engineering and cyber crimes 10% IT Operations IT Security 2% Information may not be properly backed up 3% 1% Inability to properly identify and authenticate remote users 3% 0% 10% 20% 30% 40% 50% 60% 70% Sponsored by : Page 14 Ponemon Institute© Private & Confidential Document

Cyber Crime Experience Bar Chart 3 Did your organization have a cyber attack? 100% 92% 90% IT Operations IT Security 80% 70% 60% 55% 50% 40% 32% 30% 20% 13% 10% 5% 3% 0% Yes No Don't know Sponsored by : Page 15 Ponemon Institute© Private & Confidential Document

Mega Trend: Cyber Crime Will Increase Bar Chart 4 Security risks due to cyber crime Each bar is the percentage of respondents who selected the noted information security risk Attack will cause business 40% interruption 61% Attack will result in the loss of sensitive or confidential 29% business information 24% including trade secrets IT Operations IT Security Attack will cause the loss of information about employees 29% or customers, thus requiring 14% data breach notification 0% 10% 20% 30% 40% 50% 60% 70% Sponsored by : Page 16 Ponemon Institute© Private & Confidential Document

Most Risky Mobile Devices Bar Chart 5 Most risky mobile devices Each bar is the percentage of respondents who selected the device as their highest risk 38% Laptop computers 48% PDAs and other handheld 18% devices 19% 24% Insecure wireless networks 14% IT Operations IT Security 15% USB memory sticks 11% 5% Cellular phones 8% 0% 10% 20% 30% 40% 50% 60% Sponsored by : Page 17 Ponemon Institute© Private & Confidential Document

Mega Trend: Mobile Workforce Increases Security Risk Bar Chart 6 Security risks due to a mobile workforce Each bar is the percentage of respondents who selected the noted information security risk 62% Inability to properly identify and authenticate remote users 59% 16% Information may not be properly backed up 19% Third parties might be able to access private files without 11% authorization 10% Sensitive or confidential information may not be properly 2% protected 6% IT Operations IT Security 9% Increased threat of social engineering and cyber crimes 3% 0% 10% 20% 30% 40% 50% 60% 70% Sponsored by : Page 18 Ponemon Institute© Private & Confidential Document

Confidence in the Ability to Prevent Data Loss Bar Chart 7 How confident are you that your current security practices are able to prevent customer and employee data from being lost or stolen? 45% 40% 40% 35% 32% 30% 30% 25% 23% 22% 20% 15% 12% 12% 12% 13% 10% 4% 5% 0% Very confident Confident Somew hat confident Not confident Uncertain IT Operations IT Security Sponsored by : Page 19 Ponemon Institute© Private & Confidential Document

Mega Trend: Data Breach on the Rise Bar Chart 8 Security risks due to a data breach Each bar is the percentage of respondents w ho selected the noted information security risk Loss of customer or employee information, thus requiring notification 32% of victims 35% Sensitive or confidential information that ends up in the hands of 46% cyber criminals and identity thieves 24% 14% Diminished reputation as a result of negative media coverage 21% IT Operations IT Security 5% Unauthorized parties gain access to private accounts 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Sponsored by : Page 20 Ponemon Institute© Private & Confidential Document

Security Risks Due to Data Breach Bar Chart 9 Security risks due to a data breach Each bar is the percentage of respondents who selected the noted information security risk Inability to restrict or limit use of cloud computing resources or 17% applications 29% 40% Inability to assess or verify the security of data centers in the cloud 24% Third parties might be able to access private files w ithout 13% authorization 18% 1% Dow ntime as a result of cloud computing failure 13% 29% Inability to protect sensitive or confidential information 12% 0% IT Operations IT Security Information may not be properly backed up 3% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Sponsored by : Page 21 Ponemon Institute© Private & Confidential Document

Mega Trend: P2P File Sharing Causes Security Risk Bar Chart 10 Security risks due to P2P file sharing applications Each bar is the percentage of respondents who selected the noted information security risk Use of P2P w ill result in the loss 55% of sensitive or confidential business information including 41% trade secrets 20% Use of P2P w ill increase the risk of malw are or virus infection 30% Use of P2P w ill cause the loss of 16% information about employees or customers, thus requiring data 20% breach notification IT Operations IT Security 3% Use of P2P w ill cause business interruption 2% 0% 10% 20% 30% 40% 50% 60% Sponsored by : Page 22 Ponemon Institute© Private & Confidential Document

Mega Trend: Web 2.0 Use Increases Security Risk Bar Chart 11 Security risks due to Web 2.0 Each bar is the percentage of respondents who selected the noted information security risk Use of Web 2.0 will result in the loss of sensitive or 64% confidential business information including trade secrets 34% Use of Web 2.0 will cause the loss of information about 13% employees or customers, thus requiring data breach notification 26% 14% Use of Web 2.0 will increase the risk of malware or virus infection 23% IT Operations IT Security 4% Use of Web 2.0 will cause business interruption 12% 0% 10% 20% 30% 40% 50% 60% 70% Sponsored by : Page 23 Ponemon Institute© Private & Confidential Document

Mega Trend: Virtualization Bar Chart 12 Security risks due to virtualization Each bar is the percentage of respondents who selected the noted information security risk Inability to properly identify 48% and authenticate users to 49% multiple systems Third parties might be able to 33% access private files without 28% authorization Increased threat of social 11% engineering and cyber crimes 10% Sensitive or confidential 3% information may not be 9% IT Operations IT Security properly protected Information may not be 0% properly backed up 1% 0% 10% 20% 30% 40% 50% 60% Sponsored by : Page 24 Ponemon Institute© Private & Confidential Document

Implications • Organizations are faced with a plethora of security threats to their confidential and sensitive data assets. We asked IT operations and security practitioners to rank those they believe have a high or very high risk to sensitive and confidential information. Based on the risks associated with each of these threats, we believe organizations should consider the following solutions: – Create and enforce policies that ensure access to private data files is restricted to authorized parties only. – Secure corporate endpoints to protect against data leakage and malware. – Make sure third parties who have access to your sensitive and confidential information take appropriate security precautions. – Train employees and contractors to understand their responsibility in the protection of data assets. – Ensure that mobile devices are encrypted and that employees understand the organizations’ policies with respect to downloading sensitive information and working remotely. – Understand precautions that should be taken when traveling with laptops, PDAs and other data bearing devices. Sponsored by : Page 25 Ponemon Institute© Private & Confidential Document

Conclusion • We believe the findings from this study provide organizations with guidance on which threats are more critical than others to address. IT operations and IT security professionals identified outsourcing of sensitive information to third parties, external threat of organized cyber criminal syndicates, a mobile workforce, data breaches and access to cloud computing as the most significant Sponsored by : Page 26 Ponemon Institute© Private & Confidential Document

Samples’ Combined Industry Distribution Pie Chart 1 Industry distribution of the combined IT operations and IT security samples 2%1% 2%2% Financial services 3% 17% Government 5% Pharma & Healthcare Education 5% Defense Technology & Software Hospitality & Leisure 6% 11% Retail Professional Services Telecom 6% Manufacturing Research 9% Energy 6% Airlines 6% 8% Entertainment 6% Transportation Sponsored by : Page 28 Ponemon Institute© Private & Confidential Document

Sample Characteristics The mean experience level for the IT operations sample is 8.9 years and for the IT security sample is 9.4 years. Table 2 What organizational level of respondents IT Operations IT Security Senior Executive 1% 0% Vice President 2% 2% Director 21% 24% Manager 24% 26% Associate/Staff/Technician 45% 39% Consultant 4% 6% Other 2% 3% Total 100% 100% Sponsored by : Page 29 Ponemon Institute© Private & Confidential Document

Sample Characteristics 60% of respondents are male and 40% female. Table 3a Table 3b. Geographic location Pct% Organizational headcount Pct%. Northeast 20% Less than 500 people 2% Mid-Atlantic 19% 500 to 1,000 people 4% Midwest 19% 1,001 to 5,000 people 12% Southeast 13% 5,001 to 25,000 people 29% Southwest 14% 25,001 to 75,000 people 34% Pacific 17% More than 75,000 people 19% Total 100% Total 100% Sponsored by : Page 30 Ponemon Institute© Private & Confidential Document

Ponemon Institute LLC The Institute is dedicated to advancing responsible information management practices that positively affect privacy and data protection in business and government. The Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations. Ponemon Institute is a full member of CASRO (Council of American Survey Research Organizations. Dr. Ponemon serves as CASRO’s chairman of Government & Public Affairs Committee of the Board. The Institute has assembled more than 50 leading multinational corporations called the RIM Council, which focuses the development and execution of ethical principles for the collection and use of personal data about people and households. The majority of active participants are privacy or information security leaders. Sponsored by : Page 31 Ponemon Institute© Private & Confidential Document

2009 Security Mega Trends & Emerging Threats

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