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3/4/2003
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Security Handoff

More large companies are turning to service providers to handle their security

A financial-services firm might be the last company you'd expect to entrust its network security to an outsider. But last week, Merrill Lynch & Co. did just that, signing a global multiyear contract for VeriSign Inc. to monitor and manage more than 300 network-security devices, primarily firewalls and intrusion-detection systems. The implementation is under way and will continue through the fall, says David Bauer, Merrill Lynch's chief information-security and privacy officer.

Merrill Lynch decided to outsource network security because managed-security-service providers have substantially improved their offerings in the last couple of years. Their toolsets are robust enough to support large companies, and they can do a better job of understanding how serious a threat is because they're monitoring scores of networks. "We can get analysis of events going on with us in context [of] what's going on in the rest of the world," Bauer says. "That allows us to make better decisions. It also gives us early warning."


David Bauer -- Photo by Rachelle Mozeman

Rather than monitoring the network constantly, "We can focus on the brain work, the bigger risk-management picture," Merrill Lynch's Bauer says.
Rather than worrying about constantly monitoring the network for signs of attack and checking out every system alarm, Merrill Lynch can focus on evaluating data and taking action, if necessary. "We can focus on the brain work, the bigger risk-management picture," Bauer says. "And that's where you want to be, instead of chewing up resources on the operations."

Such a move is still uncommon today. Only 24% of 286 companies surveyed by Forrester Research in October said they were likely or somewhat likely to outsource security monitoring. More than twice as many, 53%, said they were very unlikely to turn to other companies for such services. "It comes down to trust. It's an awfully big decision to hand this over to someone else," says Jeff Nigriny, chief security officer for Exostar LLC, an online exchange for the aerospace and defense industry. Exostar outsources the management and monitoring of its intrusion-detection systems and firewalls as well as incident response to TruSecure Corp.

Jeff Nigriny

"It's a big decision to hand this over to someone else," Exostar's Nigriny says.
But more businesses may become receptive to the idea of contracting with companies such as Counterpane Internet Security, Guardent, Internet Security Systems, RedSiren, Symantec, TruSecure, Ubizen, Unisys, and VeriSign as the challenge of managing security becomes increasingly complex. That's what happened at Allegheny Energy Inc. Paul Castellano, information-services general manager of security and disaster recovery, did all the right things to protect his network and computer systems from attacks. He deployed intrusion-detection systems everywhere. He assembled a staff of security pros to closely monitor the systems. And his staff built a database of attack "signatures" to spot threats.

The result of this costly and intensive effort? "We fell flat on our face," Castellano says. The security system was reporting 15,000 to 20,000 problems a day. "We were getting alarms if someone fat-fingered their password during a log on," he says. "We didn't need to know all of that stuff."

Photo of David Bauer by Rachelle Mozeman

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