Microsoft Report: Physical Data Theft, Trojans Up; Bug Disclosure Down

Here’s another reason to hold onto your laptops: 57 percent of publicly disclosed security breaches came from lost or stolen equipment in the second half of last year, compared with only 13 percent from hacking and malware, according to Microsoft’s latest Security Intelligence Report, which was released today.

The new Microsoft report, which focuses on vulnerability and exploit data it gathered from July through December of 2007, found that exploits, malware, and hacks made up only 23 percent of security breach notifications between 2000 and 2007.

And the software giant recorded a whopping 300 percent jump in Trojan downloaders and droppers detected in the second half of ’07, as well as a curious 15 percent drop in the disclosure of new vulnerabilities. Overall, vulnerability disclosures decreased by 5 percent for all of 2007.

It was the decrease in vulnerability disclosures that most caught Microsoft by surprise, says Jimmy Kuo, principal architect of the Microsoft Malware Protection Center. “This is the first time since 2003 that there’s been such a decrease,” Kuo says.

The finding also surprised other security experts, including Doug Camplejohn, CEO of Mi5 Networks. But Camplejohn warns that one data point doesn’t make a trend. “It remains to be seen whether there's a true downward trend here, or whether vulnerability discoverers are just being more tight-lipped about vulnerabilities,” Camplejohn says.

One theory for the downturn is that new vulnerabilities have moved underground, where the bad guys can make a profit by buying or selling them on the black market, Kuo says. “We therefore would not find out about those vulnerabilities until the bad guys use them,” he says. “There’s now a lag between when a vulnerability is found and when it’s reported and used.”

In the best-case scenario, software is just getting more secure, Kuo says, but there’s no way to know until this vulnerability disclosure trend plays out. It’s likely that vulnerability finds will again increase once they’ve been used by the bad guys, he says.

Meanwhile, the low number of hack-based data breaches in the report may be a reflection of the difficulty in quantifying the actual impact of such a breach, Kuo postulates. “In lost hardware, it’s easier to say we lost this [laptop], so we lost certain data. Whereas in hacking, it’s harder to ascertain” what was actually compromised, he says. Plus, if a stolen laptop carried personally identifiable information, by law the victim must report the theft, he notes, which could account for the higher percentage of reports of these breaches.

Randy Abrams, formerly with Microsoft’s security group and currently the director of technical education at Eset, says it also may be because social engineering is much easier than hacking.

"There’s little point in tunneling under a bank and drilling into the vault when a week ago, a clever con man got an employee to take all of the money out of the vault and hand it to him," Abrams says. "What’s left to hack? Social engineering is much more cost effective than hacking in many cases."

Why the massive jump in Trojans in the last half of ’07 to over 19 million? Microsoft’s Kuo says it’s just a more efficient and effective way for the bad guys -- especially botnet operators -- to infect as many machines as they can. “The mechanism they use is [mostly] drive-by downloads,” he says. They entice the user into clicking on a URL, where they then download an inconspicuous piece of malware.

Mi5’s Camplejohn says the rise in Trojans is likely tied to the massive proliferation of botnets, which use Trojans as their main infection method. “HTTP is the new IP -- everything is moving to it. Trojans are suited to Web delivery, where they can silently install and await commands from their botmaster,” he says.

Among the other findings in the Microsoft report was a decrease in high-severity vulnerability disclosures in the second half of the year, although these types of bugs increased overall in ’07. And apparently, Microsoft’s Patch Tuesday is getting lighter: the software giant released fewer security bulletins in 2007 over 2006, with 69 of them for 100 new vulns, versus 78 for 142 vulns in 2006 -- an 11.5 percent drop in security bulletins and 29.6 fewer unique vulnerabilities, according to the report.

And Microsoft points to fewer exploits being released for its newer software during the second half of ’07. Microsoft Office 2007, for instance, accounted for 11.1 percent of public exploit code, whereas Office 2000 had 52.4 percent, for example.

Critics say much of that is due to the "newbie factor" of these products, and time will tell. But Microsoft says it’s about its new software being more secure.

The report also echoed other industry estimates on spam volume -- that over 90 percent of all email messages sent via the Internet are spam. And Microsoft detailed some of its investigative activities in support of law enforcement: it has filed around 250 legal actions against spammers worldwide, according to the report.