Reflecting on the Value Loss from a Security Failure

May 6, 2024

dinosaur30a_thumb_thumbThis essay is the work of a dinobaby. Unlike some folks, no smart software improved my native ineptness.

Right after the October 2023 security lapse in Israel, I commented to one of the founders of a next-generation Israeli intelware developer, “Quite a security failure.” The response was, “It is Israel’s 9/11.” One of the questions that kept coming to my mind was, “How could such sophisticated intelligence systems, software, and personnel have dropped the ball?” I have arrived at an answer: Belief in the infallibility of in situ systems. Now I am thinking about the cost of a large-scale security lapse.


It seems the young workers are surprised the security systems did not work. Thanks, MSFT Copilot. Good enough which may be similar to some firms’ security engineering.

Globes published “Big Tech 50 Reveals Sharp Falls in Israeli Startup Valuations.” The write up provides some insight into the business cost of security which did not live up to its marketing. The write up says:

The Israeli R&D partnership has reported to the TASE [Tel Aviv Stock Exchange] that 10 of the 14 startups in which it has invested have seen their valuations decline.


What strikes me is that the cost of a security lapse is obviously personal and financial. One of the downstream consequences is a loss of confidence or credibility. Israel’s hardware and software security companies have had, in my opinion, a visible presence at conferences addressing specialized systems and software. The marketing of the capabilities of these systems has been maturing and becoming more like Madison Avenue efforts.

I am not sure which is worse: The loss of “value” or the loss of “credibility.”

If we transport the question about the cost of a security lapse to large US high-technology company, I am not sure a Globes’ type of article captures the impact. Frankly, US companies suffer security issues on a regular basis. Only a few make headlines. And then the firms responsible for the hardware or software which are vulnerable because of poor security issue a news release, provide a software update, and move on.

Several observations:

  1. The glittering generalities about the security of widely used hardware and software is simply out of step with reality
  2. Vendors of specialized software such as intelware suggest that their systems provide “protection” or “warnings” about issues so that damage is minimized. I am not sure I can trust these statements.
  3. The customers, who may have made security configuration errors, have the responsibility to set up the systems, update, and have trained personnel operate them. That sounds great, but it is simply not going to happen. Customers are assuming what they purchase is secure.

Net net: The cost of security failure is enormous: Loss of life, financial disaster, and undermining the trust between vendor and customer. Perhaps some large outfits should take the security of the products and services they offer beyond a meeting with a PR firm, a crisis management company, or a go-go marketing firm? The “value” of security is high, but it is much more than a flashy booth, glib presentations at conferences, or a procurement team assuming what vendors present correlates with real world deployment.

Stephen E Arnold, May 6, 2024


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