The orphaned botnet worm Conficker spread to 1.7 million Windows machines worldwide by the end of last year despite a major industry initiative led by Microsoft over the past three years that neutered it.

The Conficker Working Group, headed by Microsoft, effectively shut down Conficker's underlying botnet infrastructure more than two years ago; at the time, there were some 6.5 million infected machines. But the Conficker worm, which was written to automatically spread via weak passwords and vulnerabilities that were later patched by Microsoft, lives on in its decapitated form in a shocking number of Windows machines in businesses, according to new data published in Microsoft's newest Security Intelligence Report (SIR) Version 12.

Microsoft says the worm continues to spread, mostly through enterprises and via some overlooked best-practice security precautions: Ninety-two percent of the Conficker infections came through weak or stolen passwords, and 8 percent through unpatched systems. The worm was found 220 million times during the past two-and-a-half years, and quarterly infections of Conficker have risen by more than 225 percent since the beginning of 2009.

While the malware itself doesn't do any actual harm to the machine besides live in it and spread to other machines, it has exposed a major security no-no among many enterprises: weak and easily guessable passwords, security experts say, as well as lags in patching.

Conficker has become a sort of basic vulnerability assessment for these infected organizations. "It's turning out to be a nuisance to the enterprise ... It does concern security pros: If an automated threat can get into an enterprise and stay, it demonstrates that they have some vulnerabilities in their environment. If a well-known threat can get in, what about targeted attacks using the same [vectors]?" says Tim Rains, director of Microsoft Trustworthy Computing.

Rains says there's no real threat of Conficker re-emerging as a botnet right now, and no new variants have been spotted for about two-and-a-half years. But even merely harboring a benign worm in your corporate Windows machines is problematic, he says. "For some enterprises, any threat can be a serious threat. They have to run networks in a manner that allows them to be compliant with the law, and having a piece of malware running around concerns security folks," Rains says. "The other point is having an automated worm that has a well-known list of tactics ... and that AV can block. It's concerning to have this show up in a professionally managed" environment, he says.

[After more than a year of waiting for the sleeping giant Conficker botnet to come to life, security researchers called it dead rather than dormant as its creators appear to have abandoned ship, leaving the worm to merely spread on its own via unpatched Windows machines. See Conficker Botnet 'Dead In the Water,' Researcher Says.]

Conficker's apparent stubborn grip on enterprise Windows machines is an eye-opener, according to Wolfgang Kandek, CTO at Qualys. "This is a case study of malware we happen to know really well, and it shows where our problems lie," Kandek says. "We are able to see Conficker succeed with the bad password policies they have. For me, that would be the eye-opening piece: some very basic security failures in the way enterprises run their networks and enforce things such as password policy."

Among the passwords that Conficker searches for are the usual lazy and weak ones: 0000; 1111, 123123; Admin; Admin1; coffee; temp; test; and work.

Microsoft also found that nearly 10 percent of organizations had not installed the MS08-067 patch from Microsoft that protects Windows from Conficker. "The remaining 8% of Conficker-infected systems just didn't have the patch installed (MS08-067). Note that this patch is nearly four years old," said Andrew Storms, director of security operations for nCircle, in a blog post today. "I suppose there are some IT people out there that have had the patch for four years and just haven’t gotten around to installing it yet. It's far more likely though, that the IT team just didn't know these systems are on their networks and need to be patched."

According to the Microsoft SIRv12, 91 percent of Conficker-infected Windows 2003 machines were hit via weak or stolen passwords, and 9 percent via an exploit. For Windows 7 and Vista machines hit by Conficker, 100 percent were hit via weak or stolen passwords, while 88 percent of XP machines were infected that way, and 12 percent via exploit.

Conficker steals an admin password after infecting an endpoint, and then uses those privileged credentials to log into all other machines in the network and infect them as well. When an administrator logs into an infected computer to troubleshoot or clean it, for example, Conficker uses that admin's credentials to spread to other machines.

The SIRv12 report also found that many targeted attacks -- often called advanced persistent threats (APTs) -- really aren't so sophisticated or advanced. Most of them employ the same attack vectors as wide-scale attacks such as Conficker: exploiting weak or stolen passwords, unpatched vulnerabilities, and social engineering. Microsoft doesn't use the term APT, but rather targeted attacks by determined adversaries, because calling these "advanced" can be "misleading," Rains said in a statement.

Meanwhile, Qualys' Kandek was shocked at the high rate of Conficker infections still under way. "I was not aware there was such a huge number of new infections going on," he says. "We need to work much better on the [security] basics.

"Conficker is a well-written piece of software. We still see the effects of that. I think we could, but haven't tried hard enough to get it out of systems."

A copy of the full Microsoft SIRv12 is available for download here.

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