Inside the black market 'bug trade'

The black market for software vulnerabilities is booming, with bugs regularly being sold for thousands of dollars a piece online. And one of the only ways to reduce this steady stream of hacks, according to Geekonomics author and IT security pro David Rice, is for software companies to simply write better code.

Speaking at this week's IT 360 show in Toronto, Rice took conference attendees into the underground vulnerabilities market, where hackers -- or anybody else with deep pockets for that matter -- can buy access to the latest unpatched security threats.

"The irony of this cyber space world is that attackers don't break in to anything," Rice, who also serves as the director for California-based security consultancy The Monterey Group, said. "There are an unknown number of broken windows in every piece of software out there today. They just find holes that the vendors failed to detect themselves."

The fact that all software comes shipped with security threats just waiting to be discovered, he said, has facilitated a vast open market among hackers looking to discover the next "zero-day" threat -- a buzz word that describes a not-yet-patched vulnerability that the public does not know about.

"Reported bugs may go unfixed by manufacturers for months or years, but unreported vulnerabilities go unfixed period," Rice said. "They give hackers carte blanc access to critical networks and systems and hackers can make a lot of money by not reporting these bugs."

"And when you look at the patching process at some software companies, it really is dysfunctional, because you are never going to win the patch race against these guys," he said.

To fight against zero-day threats, some security experts recommend defensive measures such as network behavior analysis and 'white listing' to keep all but approved applications and services from running on a network.

"You've got to start thinking of what to do with zero-day threats outside of patching," Gerhard Eschelbeck, chief technology officer at Boulder, Colo.-based Webroot Software Inc., said. "There has to be more thinking in the industry about heuristic and behavioral models."

Amrit Williams, an analyst at Stamford, Conn.-based Gartner Inc., said "there is a whole class of basically unknown exploits taking advantage of unknown vulnerabilities" that require a response beyond patching, Williams said.

In many cases, such attacks are going to be hard to stop because they hit flaws no one but the attacker knows about. So companies need to implement measures for quickly identifying such attacks and limiting fallout -- including taking steps such as network segmentation, traffic filtering and using access controls, he said.

But despite the talking points from many security experts, Rice said that protecting against all risks might be impossible. In fact, not even the security measures themselves are safe from attacks.

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