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Vulnerabilities / Threats

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Wes Spencer
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Managed IT Providers: The Cyber-Threat Actors' Gateway to SMBs

Criminals have made MSPs a big target of their attacks. That should concern small and midsize businesses a great deal.

For years, cybersecurity has largely been an enterprise issue. Small and midsize businesses (SMBs) were often the targets of opportunistic attacks, but both damages and frequency were low enough for them to not cause concern for business owners. While it can be argued that cybercriminals were simply going after larger and more lucrative targets, they also misunderstood how the SMB sector itself could be a valuable target. 

2019 changed all of this. For the first time, cyber-threat actors began to truly understand the gateway to attacking and exploiting the SMB sector: the managed IT services provider, or MSP. To be sure, MSPs had come under attack in years past, but the average ransom payout in 2018 for an MSP was less than $10,000.

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What did that say about cybercriminal understanding of the average MSP? That MSP is just like every other small business organization out there — a small victim with little capacity to pay out for ransomware recovery. This mantra began to change late last year as MSPs began to be leveraged as the initial infection vector of their larger clients. The Texas ransomware attacks were the first highly publicized examples that served as the catalyst, but certainly weren't the last.

Just like that, Pandora's box opened. Throughout 2019, we saw threat actors begin to focus anew on MSPs. While BitPaymer proved that "big game hunting" was both feasible and lucrative, the GandCrab threat actors paved the way toward operationalizing a model that included MSPs as a target.

Within just a few months, MSP after MSP fell victim to a number of high-profile and sophisticated threat actor groups. Ransom payments reached an average of $754,723 when an MSP and all of its clients were ransomed, according to Perch Security research.

The feeding frenzy of 2019 continued into 2020. Common threat vectors for initial infection included anything from phishing, misconfigurations like open RDP, and attacks against known and unknown vulnerabilities in the software platforms that MSPs commonly use, such as remote monitoring and management (RMM) tools.

Without doubt, MSPs came fully under the crosshairs of some of the world's most dangerous threat actors. Then, criminals changed tactics. They realized that by compromising an MSP via its RMM, they could easily deploy ransomware across their entire footprint.

Chris Loehr — executive vice president of Solis Security, an incident response firm — has personally dealt with many of these MSP breaches. Speaking of GandCrab, Loehr says, "They certainly hit some MSPs in 2018, but the ransoms were relatively small: $10,000 to $25,000. In 2019, MSPs became more of a target, with increasing ransom demands and the threat actors leveraging MSP tools with greater efficiency to affect clients. GandCrab never required the MSP to pay up. It wasn't until GandCrab evolved into Sodinokibi in mid-2019 threat actors began to say: 'We ONLY want the MSP to pay. You can pay for ALL the customers or you get NOTHING at all.'"

Most ransomware threat actors targeting MSPs began to realize that the entire value of an MSP and all of its SMB clients was equal to that of a large enterprise. Loehr confirms this, saying, "MSP ransoms went up in 2019 from $10,000 to anywhere from $100,000 to $1 million. We've even seen one instance of a $20 million ransom."

2020 has seen a steady and continued trend of continued attacks against MSPs. Unfortunately for many SMBs, they have been brought into a new reality: They are included as victims by inheritance through their use of MSPs, often through no fault of their own. These SMBs are stuck in an ultimate catch-22. As they are far too small to effectively invest in their own IT management, partnering with an MSP makes sense. Yet this partnership can be fraught with new risks, many of which the SMB sector itself doesn't fully recognize.

Now more than ever, leading MSPs are re-engineering their cybersecurity offerings. "The new normal has begun, and the line in the sand of minimum cybersecurity requirements have changed for the SMB," says Andrew Morgan, host of the CyberCall, a free online community of 2,000 security-focused MSPs. "We're leading the charge for all MSPs, helping them understand that what they were doing for security in the past is no longer sufficient. And explaining this to their clients is a core competency that all MSPs must have in order to survive."

Morgan explains that help for all SMBs is on the way. "The CyberCall has been a tremendous catalyst for the entire industry. We've already had leaders from the Center for Internet Security, Global Cyber Alliance, and others join our call. They understand that the only way the SMB sector can truly be secured is by way of the MSP. They are focused on bringing the resources, attention, and help that all MSPs and their SMB clients need in these wild times."

As a result of these endeavors and many others throughout the industry, change is in the wind. MSPs are beginning to understand and build maturity in their cybersecurity posture that then extends downward to the SMB sector that they serve.

No one is projecting a reduction in cyber-threat activity, so MSPs that are actively retooling their defensive security posture stand as the most prepared to effectively defend against a growing threat against the SMB sector.

Wes Spencer is a nationally recognized technology innovator and cybersecurity expert. He has served as a senior executive and adviser from Fortune 500 to venture capitalist backed startups. He is a dynamic and frequently requested professional conference speaker.Wes has ... View Full Bio

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User Rank: Apprentice
9/10/2020 | 5:06:11 PM
Managed Services 2.0 - It's time to re-think the RMM
The wakeup call for MSPs is out there. Just like with enterprise, it's way past time to improve your processes, educate your people, and get more secure tools. Because of these high-profile attacks, MSPs are in the news, and are about to start being regulated. 

The RMM, once the core of the MSP, is now its weakest link. It'll be interesting to see what happens in the next few years. I hope we see more companies like Perch that can bring enterprise-level security to multi-company providers.
User Rank: Author
9/11/2020 | 10:10:13 AM
Re: Managed Services 2.0 - It's time to re-think the RMM
Tim -- excellent points! And thanks for reading.

Agreed with you on potential impending regulations that may come to MSPs. I'm aware of this being discussed in certain federal and state circles. Regardless, I agree with your sentiments, especially around the RMM. 
User Rank: Apprentice
9/12/2020 | 9:11:09 AM
Organizations inherit their MSP's cybersecurity (im)maturity
Thank you for shining a light on this systemic vulnerability. I don't think organizations realize that, in many ways, they inherit the security of their service providers. As another commenter noted, the RMM is overdue for radical reinvention. Security-minded MSPs may need to think about delegated access to customer environments, privileged access workstations, or other methods for remotely administering customer environments without that big fat one-to-many target that RMM represents. I think the MSP tooling ecosystem is general is problematic - MSPs design for scale and efficiency (making them an economical option for customers as opposed to hiring internally), but do I really want my password manager integrated into my RMM? Maybe not... There's a lot of market share out there waiting for MSPs that can develop real cybersecurity maturity.
User Rank: Author
9/15/2020 | 10:29:51 AM
Re: Organizations inherit their MSP's cybersecurity (im)maturity
@rheidorn -- really well said. Thank you so much for the insightful comments! This here particularly got me thinking:

I don't think organizations realize that, in many ways, they inherit the security of their service providers.

Indeed! Cybersecurity is not a commodity among service providers. One is not necessarily like unto another. Some MSPs have robust and mature cybersecurity controls while others are lackluster. It is imperitive that the client ask questions to their MSP to better understand their capabilities. Because, as you said -- they inherit the security of their service providers. 

Thank you for the awesome comment!


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