Challenges for the next five years: Security and interoperability

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Challenges for the next five yearsSecurity and
interoperability
TSANet Europe Members MeetingMainz
2nd December 2004
Prof. Jim Norton Independent Director Senior Pol
icy Adviser UK Institute of Directors www.profji
mnorton.com
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Issues to be covered

• Setting the scene - technological
  cost-performance continues to grow
  exponentially.
  
• E-Business is now mainstream business
• Affordable broadband access benefit and curse.
• Can the existing model of highly distributed
  computing be made secure?
  
• New models from Grid Computing and ASP?
• Some final thoughts.

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The second half of the chessboard
Original idea George Gilder at the
Cato-Brookings Institution conference "Regulation
in the Digital Age," held in Washington D.C. on
April 17-18, 1997.
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The cost-performance of electronics doubles every
18-24 months (Moores Law)
33 Doublings
Source Analysys
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Moores Law in ActionIntel Microprocessors
2T/18
Source Intel Silicon Image
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Opto-electronics follow the same path (Moores
Law operates in telecoms, too)
31 Doublings
Source Analysys
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Gigabit Ethernet installed base growth
Millions
Source IDC Silicon Image
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The cost-performance of magnetic storage doubles
roughly every 18months
26 Doublings
Source Silicon Image
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Disk storage density is growing exponentially too
Source IDC Silicon Image
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Magnetic disk costs (3.5 platters)
Source IDC Silicon Image
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Coopers law for wireless
42 Doublings
Coopers Law, (after ArrayComm Chairman, Martin
Cooper), states that the number of conversations
(voice and data) conducted over a given area, in
all of the useful radio spectrum, has doubled
every two and a half years for the last 105
years, ever since Marconi discovered radio in 1895
Source ArrayComm
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But we have seen this before in the context of
the telegraph
Source Tom Standage, The Economist, The
Victorian Internet
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The first half of the chessboard has already
delivered some surprises
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Mobility will drive the second half of the board
.welcome to the world of m-business
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How will the mobile phone change to become a true
m-business device?

• Keypad - removed in 2005 - replaced by continuous
  voice recognition.

• Screen - upgraded by end 2006 - made as large as
  you wish using foldable amorphous semiconductor.

• Communications - upgrading
• now nationally to 28.8 kbps (HSCSD) and 40 kbps
  (GPRS) and
  
• Now rolling out 3G to 384 kbps wide area 2 Mbps
  in building.

• Processing - by end 2006 as capable as as top of
  the range year 2003 laptop.

• Battery life - probably the biggest problem!
  Methane based micro-fuel cells by 2006/7.

Source A little informed speculation!
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Dont forget the short-range mobility technologies

• In five years time
• no devices will be tethered to fixed
  infrastructure. There will be extensive use of
  
• Bluetooth - up to 723 kbps, range 10 to 100
  metres
  
• Personal Area Networks - up to 480 Mbits/sec,
  range 1-10 metres
  
• UMTS - DECT enhancements
• WiMax - up to 70Mbits/sec 50km reach and
• Wireless LANs 11 54 Mbits/sec.

• there will be massive fibre capacity to the curb
  or building, but extensive use of radio for the
  last 10 metres internally and last 100 metres to
  5 kilometres outside and

• devices will be dual standard for use both inside
  and outside buildings.

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Wireless LANs taking off..
Exponential growth in hotspot locations. It is
expected that, worldwide, by the end of 2005
there will be Wireless LANs operating in

• 420 airports
• 5,000 enterprise guest areas
• 23,500 hotels
• 85,500 retail locations and
• 30,500 community points.

71,000 public wireless LANs were expected to be
operating worldwide by the end of 2003.
Getting users to take security seriously
continues to be a major nightmare
Source Gartner July 2003
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We are drowning in data.
Where is the life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in
information? T S Eliot, Choruses from The Rock
, 1934
And a codicil for the 21st century
Where is the information we have lost in data?

The World produces more than 2 Exabytes (2
Billion Gigabytes) of unique information per
year, more than 250 Megabytes for every man,
woman and child on earth
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Issues to be covered

• Setting the scene - technological
  cost-performance continues to grow
  exponentially.
  
• E-Business is now mainstream business
• Affordable broadband access benefit and curse.
• Can the existing model of highly distributed
  computing be made secure?
  
• New models from Grid Computing and ASP?
• Some final thoughts.

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We have moved on from where this all started
With acknowledgement to the UK Office of the
e-Envoy
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A cartoonist sums it up beautifully
With acknowledgement to Roger Beale at the
Financial Times - 13/3/01
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It was ever thusthe e-Biz trough of disillusion
Source Gartner Group - 1999
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With acknowledgement to Roger Beale at the Daily
Telegraph...
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Why is e-Business important?
The e-business scope compass
When I took a look at Boeings interaction costs
and discovered that e-enabling the business could
save as much as 50, I became an instant
believer Phil Condit Chairman CEO The Boeing
Company - 2001
The e-business scope compass source
Mohanbir Sawhney - Kellogg Management School
Northwestern University Chicago
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Developing enterprise integration is a long climb

• The further we climb up this ladder the more
  inter-working of disparate systems is required
  across both organisational and corporate
  boundaries.
• A classic TSANet challenge?

The ladder of e-business initiatives, source
Mohanbir Sawhney - Kellogg Management School
Northwestern University Chicago
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Resolution of the Solow productivity paradox
Policy-makers and economists have long debated
the role of information and communications
technology (ICT) in the economy.  The traditional
view in the 1980s and 1990s was that its impact
was limited.  This was well characterised by the
Solow Productivity Paradox that "you can see the
computer age everywhere but in the productivity
statistics".  A confluence of new evidence based
on analysis of US economic performance in the
late 1990s demonstrates a strong inter-dependence
and that ICT has had a substantial impact on
GDP. 
This view has been supported by research by the
EC that lies behind the claim by Erkki Liikanen,
Commissioner for enterprise and information
society, in October 2003 that "there is more and
more evidence that the adoption of ICT is a key
to productivity growth. In the US, it has been
unusually robust, and has spread to the wider
economy."
Innovation in ICT has a transformational impact
on productivity and growth - in the US, ICT
produced an estimated one percentage point
increase in yearly GDP growth in the late 1990s. 
Evidence and reasoned argument point to this
productivity and growth improvement continuing
for many years to come.  Applying the same logic
to the European economy, ICT could increase our
future GDP growth rate from 2 per cent to 3 per
cent.  ICT can do to our economy in the 21st
century what railroads did in the 1800s and
electricity in the 1900s. 
Source Andrew Heaney of Spectrum Strategy
Consultants and Brian Williamson of Indepen,
"Reaping the Telecoms Dividend" January 2004.
Quoted in the Financial Times 18 Feb 2004
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Assembling the Sophistication Index
Based on a fusion of the three pillars and
technology innovation lifecycle approaches with
54 sub-indicators.
Source UK DTI Business in the Information Age
International Benchmarking Study 2003 Page 124
www2.bah.com/dti2003
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Sophistication Index 2004 - Results
The order of merit is Sweden, Rep. Of Ireland,
UK, Germany, S. Korea, Canada, USA, Australia,
Italy, Japan, France.
Source Business in the Information Age,
International Benchmarking Study 2004 Page 107
UK Department of Trade Industry / Booz Allen
Hamilton http//www2.bah.com/dti2004
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Integration of ICT systems with suppliers
Whilst many companies now routinely interact
online with suppliers (e.g. to order or pay for
supplies or to track orders, only 20 have so far
moved to tighter integration such as automated
call off of orders
Source Business in the Information Age,
International Benchmarking Study 2004 Page 85
UK Department of Trade Industry / Booz Allen
Hamilton http//www2.bah.com/dti2004
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Integration of ICT systems with customers
Similarly, whilst many companies now routinely
interact online with customers (e.g. to accept
orders and payments or to allow orders tracking,
only 23 have so far moved to tighter integration
such as automated replenishment of supplies.
Source Business in the Information Age,
International Benchmarking Study 2004 Page 86
UK Department of Trade Industry / Booz Allen
Hamilton http//www2.bah.com/dti2004
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Issues to be covered

• Setting the scene - technological
  cost-performance continues to grow
  exponentially.
  
• E-Business is now mainstream business
• Affordable broadband access benefit and curse.
• Can the existing model of highly distributed
  computing be made secure?
  
• New models from Grid Computing and ASP?
• Some final thoughts.

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Broadband access A working definition
Always on access, at work, at home, or on the
move provided by a range of fixed line, wireless
and satellite technologies to progressively
higher bandwidths capable of supporting genuinely
new and innovative interactive content,
applications and services and the delivery of
enhanced public services.
Source UK Broadband Stakeholder Forum - Jan 2004
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What we mean by BroadbandSpeed
Large business has had access to broadband for
many years, only mass market, affordable
broadband is new
Mass market broadband is a journey. There is no
simple, single definition that holds over time
Stage Typical Speed Typical Application
1st Generation 256kb/s - 2Mb/s Fast Internet
access 2nd Generation 2Mb/s - 5Mb/s Applic. Serv.
Prov. 3rd Generation 5Mb/s - 50Mb/s Real time vi
deo
Broadband services are always on and charged
simply by rental or by volume of data shipped not
by connected time
Source UK Broadband Stakeholder Forum
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Broadband Internet penetration in Europe

• Broadband quarterly growth rates are
• UK 17
• France 11
• Germany 8

Source UK Ofcom Communications market update
Oct 2004
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Dramatic growth of broadband connections in UK
UK still adding more than 50K broadband customers
each week.
Source UK Ofcom Communications market update
Oct 2004
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Broadband impact on e-business processes
Source UK Broadband Stakeholder Forum
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What quantifiable benefits are we seeing from
business use of broadband access?
84.3 of respondents cite productivity
improvements from broadband access.
64 of respondents see a direct link between
broadband and increased profits.
Source UK/IoD Policy Unit survey on broadband
access Oct 2004
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Many respondents believe that broadband access
brings very significant business benefits
Better and faster RD.
Better information for decisions
Can now do jobs we would not have contemplated
four years ago.
Couldnt do business without it.
Improved communications with/for outworkers
Transforms way of working.
Quick access to worldwide web with huge increase
in use at low fixed monthly cost.
Speed and ability to work anywhere in the World
Source UK/IoD Policy Unit survey on broadband
access Oct 2004
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What measures do you take to protect your home
(or home office) PC against viruses and other
security threats?
There are still significant vulnerabilities with
10 of respondents not using a firewall and 23
not regularly installing security updates
Source UK/IoD Policy Unit survey on broadband
access Oct 2004
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Issues to be covered

• Setting the scene - technological
  cost-performance continues to grow
  exponentially.
  
• E-Business is now mainstream business
• Affordable broadband access benefit and curse.
• Can the existing model of highly distributed
  computing be made secure?
  
• New models from Grid Computing and ASP?
• Some final thoughts.

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Can the existing model of highly distributed
computing be made secure?
Todays model, based on individual processors and
servers on the end of 120 million broadband
connections across the world, is inherently
insecure. Even with the heroic assumption that
99 have fully configured firewalls, up to date
virus protection, and fully patched browsers,
this would still leave more than 1 million
processors vulnerable. Current research suggest
s, for example, that a broadband attached PC
without a functioning firewall will be located
and infected within about 20 minutes
It will almost certainly become infected with
trojan viruses and able to participate in denial
of service attacks.
I submit that this is not sustainable for much
longer
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Average loss by business issue type, US
businesses (000US)
Source Computer Security Institute /FBI
Computer Crime Security Survey 2004 - Average
of total loss reported by 269 businesses
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More issues with Malware

• The top five malware families of all time
  including hybrids are 1. MyDoom 2. Netsky
  3. SoBig 4. Klez and 5. Sasser. 
  
• The total economic damage worldwide from malware
  proliferation - with an additional 480
  new species in 2004 alone - is now estimated
  to lie between 166bn and 202bn for 2004.
• With an installed base of around 600 million
  Windows based computers worldwide, this works
  out roughly as average damage per installed
  machine of between 277 and 336. 

Source mi2g briefing 21st November 2004. See
http//www.mi2g.net
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Issues to be covered

• Setting the scene - technological
  cost-performance continues to grow
  exponentially.
  
• E-Business is now mainstream business
• Affordable broadband access benefit and curse.
• Can the existing model of highly distributed
  computing be made secure?
  
• New models from Grid Computing and ASP?
• Some final thoughts.

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New models from Grid Computing and ASP?
I suggest that processing will move into the
network (along the model long highlighted by Sun
and Silicon Image) where it can be fully and
professionally protected. This will leave very
thin clients (screen scrapers) only at the edge
with little if any processing to infect.
Software, processing and storage will be availab
le on a pay per use basis - e.g. Application
Service Provision (ASP). Recent research in the
UK by IoD/Dell suggests that SMEs are now much
more willing to consider an ASP model
This model powered by broadband access will
greatly benefit small business
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Issues to be covered

• Setting the scene - technological
  cost-performance continues to grow
  exponentially.
  
• E-Business is now mainstream business
• Affordable broadband access benefit and curse.
• Can the existing model of highly distributed
  computing be made secure?
  
• New models from Grid Computing and ASP?
• Some final thoughts.

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Some final thoughts.

• E-business has not gone away! The excess of
  gloom on the downside was just as wrong as the
  earlier excess of hype.
  
• Normal Darwinian processes have removed from
  the market those who had wacky business plans and
  little common sense
  
• E-business is now being integrated into
  traditional business, bringing major cost
  savings, service enhancements and new business
  opportunities. Secure interoperability is an
  essential element of these savings and
  improvements
• Affordable broadband access levels the playing
  field between large and small business but,
  combined with the fallibility of small office
  home users, raises major security exposures.
• The major challenge for the next five years is to
  find ways of stabilising the existing model of
  distributed processing - or replacing it with a
  new model

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But always remember that major change can
sometimes have unexpected impacts.
Oh dear!
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Questions Answers
Slides can be downloaded from
www.profjimnorton.com/tsanet3.ppt