Pipe Cleaners: Telcos Offer Managed Security Services

AT&T and other telcos want to clean up your Internet traffic - for a fee. A look inside in-the-cloud scrubbing services.

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Although not everything can be handled at the network level, AT&T currently offers several services in the cloud. First, there’s the network-based firewall, which can be accessed and configured through a Web portal and eliminates the need for a perimeter-based firewall. Second, there’s defense against DoS attacks. With this setup, when a customer’s Web traffic reaches a certain threshold, AT&T diverts the traffic to scrubbers that filter out the bad traffic and direct the good to the company’s website. Third, there’s e-mail security, where AT&T uses third-party software to filter out viruses and spam—typically at least 80 percent of a company’s inbound e-mail traffic. A similar Web security service screens incoming Web and instant-message traffic for malware. Finally, a family of services called Internet Protect notifies customers of unusual Internet activity—the junk on the screens at AT&T’s network operations center—and makes recommendations. For instance, if technicians see early indications of a new worm, they may suggest that a customer temporarily block traffic to the affected port. Right now, most of AT&T’s security customers still favor handling things the old-fashioned way, by turning over the management of what’s known in industry lingo as customer premises equipment (CPE), such as firewalls. One customer CSO spoke with didn’t even seem aware that AT&T is cheerleading the in-the-cloud model, and AT&T says that only about 10 percent of its devices are handled in the cloud. But that’s changing.

For instance, the company says that the number of virtual firewalls it manages has been growing at a compounded rate of

65 percent to 75 percent annually over the past three years and has already passed the halfway point. “The shift is starting to happen pretty rapidly,” says Stan Quintana, vice president of AT&T Security Services. He projects that five years from now, the ratio of in-the-cloud devices to CPE will almost have flipped, with a full 80 percent of services handled virtually.

Even before the announcement that it would acquire Cybertrust, competitor Verizon was saying that its managed security service offerings were growing at a fast clip of about 67 percent a year, with two in-the-cloud services similar to AT&T’s offerings proving to be especially popular. While the Cybertrust acquisition doesn’t add to Verizon’s in-the-cloud offerings, a spokesperson says, it might give the company more options for adding cloud-based functions later on.

One of those already successful services is e-mail filtering, in which inbound e-mail is scrubbed by four antivirus engines and spam is deleted through a partnership with e-mail security company MessageLabs before being passed on to the customer. “It’s the same service [Verizon customers] could get on their own,” Verizon Business CISO Sara Santarelli says, “but they’re only interacting with Verizon’s customer service.”

The second, faster-growing in-the-cloud service at Verizon is DoS protection, in which Web traffic is filtered for spikes of malicious activity. “Things like DoS mitigation and detection are far exceeding industry growth expectations across MSSPs,” Santarelli says. “A lot of customers keep traffic running through our [DoS attack] mitigation units all the time, just as added insurance.”

None of which should be much of a surprise, given that companies such as Gartner suggest that customers demand DoS protection from their connectivity provider. “That’s been our recommendation,” Pescatore says. “Whoever you choose for your bandwidth, tell them, ‘I don’t want the raw bandwidth costs. Give me your price for DoS-protected bandwidth, and I’ll compare you with others on that basis—not just on who sells me the cheapest bits per second.’”

Both AT&T and Verizon declined to provide any specifics about revenue for their security operations, but Pescatore estimates that right now, telecom companies are getting about 10 percent to 20 percent additional revenue by adding security filtering to connectivity charges. The question is how long that will last. “At some point,” Pescatore predicts, “one of them is going to say, ‘Hey, we’ll give you that DoS protection for free if you switch from them to us.’”

Indeed, much of the industry’s shift to security services seems more about staying competitive than about making buckets of money. “It’s not a great portion of our revenue, but it’s strategic to our overall revenue,” Quintana explains. “When customers are evaluating AT&T versus vendor A, B or C, our security portfolio acts as a differentiator to pull through” the sale.

But Will It Work?

Longer term, however, it remains unclear whether customers will really decide in droves to turn over their security to telecom companies—or to anyone. For one thing, not everything can happen in the cloud. Even if an Internet carrier scans incoming e-mails for viruses, for instance, the company still needs a desktop application to guard against malicious code introduced by USB drives or other portable devices. What’s more, the Fortune 1000 customers that large telecom and IT companies have historically courted are likely to have contracts with multiple telecom companies for reasons of redundancy, and also tend to want security devices onsite that they can configure on a moment’s notice. The outsourcing model may be better suited to small and midsize businesses that can’t afford to hire round-the-clock security and IT staff—and even they may be reluctant to give up their boxes and blinking lights and move to a virtual model.

At Visions Federal Credit Union, VP and CIO Tom Hull decided to turn over 24/7 security monitoring to Perimeter eSecurity, but still keep the company’s own firewalls. “I think there is a hard sell there,” says Hull (whose Endicott, N.Y.-based company has just 400 employees and annual sales of

$80 million) of the in-the-cloud model. “We still retain their help in managing the firewalls, but we didn’t want to rely on the schedule of a third party to institute any changes in our environment. Plus, as it relates to any outages, downtime, system maintenance or things of that matter, that was another thing we could not relinquish control of.”

In London, AT&T customer Martin Joy also decided against AT&T’s virtual devices. “I’m not keen to see a device on my premises. The important thing is to make sure the technology makes sense and delivers what we want,” says Joy, CIO of Control Risks, a $219 million risk consultancy. Nevertheless, he felt that his business needs were best met by turning over management of firewalls and other devices to AT&T, while keeping his antispam function handled in the cloud by a separate e-mail security company. For him, it was a question of one-stop shopping versus what he perceived as best-of-breed.

On a broader scale, it’s unclear whether home consumers will ever want to sign up for a “clean” Internet. AT&T is testing how it could roll out a version of its corporate security offerings to home customers, but already executives have concluded that even its target audience—parents of school-aged children—might not be content with just a Disneyfied version of going online. “Maybe Dad wants to do online gambling but keep teens away from it,” Amoroso says. “We’re just trying to create something people will like and that matches what people want to do.” That will likely involve different versions of the Internet, perhaps delivered to homes based on who’s at the computer—a far cry from really cleaning up the junk in the pipes of the Internet.

For now, and maybe for the long run, companies like AT&T will have to continue to make careful decisions about what traffic they can safely delete without violating their service-level agreements with customers or overstepping their bounds as common carriers that just pass bits from left to right. Amoroso says that AT&T can and does delete malicious traffic that will affect its infrastructure. It also deletes e-mail traffic coming from known blacklists of spammers and blocks port 25 on its DSL lines unless a customer requests otherwise. (Amoroso estimates that 75 percent of spam comes from compromised home PCs, usually on port 25, which is not the port that a typical DSL subscriber uses for outbound e-mail.) But for the most part, AT&T can do so only on behalf of a customer—not on behalf of the Internet at large.

“I don’t think there’s a single carrier that would do that, only because that’s pretty presumptuous,” Amoroso says. “If there was some general council in Geneva, some tribunal that decided all carriers must do the following, it would be easy enough to do. But I don’t think that’s a role that the carrier has been asked to do or would be comfortable doing.”

Even deleting the most egregious traffic can raise issues. Amoroso says there have been cases where AT&T terminated a portion of an agreement with a customer who was on the blacklist of spammers—in other words, a customer whose every outgoing e-mail AT&T would normally delete.

Understandably, AT&T wants to distance its security operations from the net neutrality controversy as much as possible. After one interview with CSO, a public relations professional called to emphasize that cleaning up traffic for security reasons is entirely different from segmenting different types of traffic into high-speed lanes. But the fact remains that both activities involve value judgments about which traffic deserves to go where and when. And that further complicates Amoroso’s lofty version of the “cleaner” Internet of AT&T’s future.

“Filtering out traffic makes the carriers less neutral, no doubt about it,” Oxford University’s Zittrain says. And the more the carriers do so, he predicts, the more difficult it may become. “They are holding back not because of some ideological principle like a belief in net neutrality,” Zittrain continues, “but because they see no reason to get into a customer-service nightmare of quarantining their compromised subscribers and then helping them to fix their machines.”

Technically speaking, Internet carriers such as AT&T, looking out at their charts of DoS attacks and spam and unfolding worm- and bot-related activity, may indeed be in the best position to fix the Internet. But actually doing so, outside the prescribed version of the Internet that businesses want to make available, simply may not be a task that they are in a position to accomplish.

“People want simplicity, but they also want flexibility,” says Andrew Odlyzko, director of the Digital Technology Center at the University of Minnesota, who worked in research at AT&T Bell Labs for 26 years. “That’s the conflict. If the telecom environment were stable and predictable, then the smart Ma Bell network”—in which Internet users are carried from one clean and safe place to another—“would make a lot of sense. People don’t want to worry about the complexity of spyware, viruses, corrupt files. But they want new services, like YouTube. So you have this tension. It’s there, and it will continue to be there.

“I don’t expect that AT&T or any other carrier can provide a foolproof solution to computer insecurity,” Odlyzko continues. But he won’t go so far as to say that telecom companies are just wasting their time, either. “I think they can do some [of the solution] and make money at it too.”

Senior Editor Sarah D. Scalet can be reached at sscalet@cxo.com.

Copyright © 2007 IDG Communications, Inc.

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