From...

January 18, 2000
Web posted at: 2:32 p.m. EST (1932 GMT)

by Christina Wood

(IDG) -- I don't scare easily. But I've been terrified twice in the past year. The first time it happened was while I watched The Blair Witch Project at a local theater. The second time was during a demonstration of a new software product.

Now, I've seen a million software demos, and in the vast majority of these my biggest fear is that I'll fall asleep. This time, though, I found myself perched on the edge of my seat. Eran Reshef, cofounder and vice president of Perfecto Technologies, was showing me why he thinks the world needs his company's product, a security package (priced at upward of $50,000) that is designed to protect Web sites from hacker attacks.

As I sat there watching, Reshef demonstrated how he could transform just about any Web site into his own personal playground. And though Reshef and most of his technical staff are former members of an elite technical unit in the Israeli Army, he denied that he possesses the hacking talents of a once-in-an-eon technical genius. In fact, Reshef was careful to characterize his skills as fairly common. He said that practically anyone who can put up a Web site -- and has a burglar's moral code -- can take a site down. Those same skills can be used (and this is when I really got frightened) to plunder a site for confidential information about its users.

I don't want to alert any hackers out there to security holes that are waiting to be breached. So I won't mention the names of the Web sites I saw Reshef gain access to -- but they're ones you know, maybe even ones you do business with. Reshef would spend 15 minutes or so editing HTML code and performing other technical tricks...and then I'd see the names and passwords of a site's programmers scroll across his computer screen.

He dropped items into his shopping cart at various e-commerce sites, including the online home of a major computer vendor, and then changed their prices at will. He also downloaded customer information from an airline's frequent-flyer site, and he described to me how he was able to make trades from the account of the CIO of a large online brokerage firm -- while the CIO looked on.

"This is bad," Reshef announced at one point in his demonstration for me. "The game is over -- I can do anything I want [at this site] right now." Gulp.

Protection racket?

Reshef didn't have to hack around firewalls or break encryption. He accomplished his break-ins using only his Web browser, some know-how, and maybe a little programming code. Reshef (and presumably hackers who use their abilities less benignly) hunts around Web pages for little programming mistakes. These subtle errors -- Reshef says most programmers make them from time to time -- offer knowledgeable snoops points of entry to a site's server. And once they have that access, they can cause all kinds of mayhem.

Not that Reshef would -- he's a nice guy. In fact, one analyst I spoke to described him as a Boy Scout. And the break-ins he performed were done only after obtaining the permission of the sites' proprietors. But in retrospect, I can't help imagining him appearing in an episode of the HBO series The Sopranos selling protection against the depredations of a frightening group of high-tech wise guys.

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Shortly after taking in Reshef's demonstration, I saw a report of a popular news site (which will also remain nameless) being taken completely down by an unknown hacker or hackers. I called the site manager to see whether the break-in involved the kind of hacking Reshef showed me. She said no. The site had simply had a problem with an FTP server, which was now fixed. Besides, she told me, the kind of thing I was describing to her was impossible. "Did you ever think maybe you were getting a snake-oil pitch?" she asked. "'Here's the disease, now here's the medicine you need to cure it?'" That's a reasonable question, I thought.

So I did some checking.

"The problem that Perfecto is targeting is right on the money," counters Mike Zboray, vice president and research director for the Gartner Group, an industry research firm. "Take a look at your typical Web server configured for use on the Net. The people who do that configuration are not terribly meticulous about the underlying code, and they aren't meticulous about how they have safeguarded the content they have created. When it works, they put it up. Is that good enough for e-commerce? Probably not."

For quite a while, Zboray has been warning his clients to be diligent about protecting their Web sites from this kind of intrusion, either by plugging holes themselves or, more recently, by buying Perfecto's software. But to make his point, he has sometimes been forced to perform a little hacking of his own. "I'm not nearly as good at this as Reshef is, but I have been able to get complete access to servers. I do it just to demonstrate how people are exposed."

A similar demonstration by Reshef persuaded Quote.com's Kaj Pedersen that his site needed Perfecto. "The selling point for me was when Reshef changed my password and was able to get my access privileges to the site," explains Pedersen, vice president of engineering at the financial market data site.

Okay, I'm scared. And naturally, my first concern is for my own wallet. I practically live on the Internet. Are my life and finances an open book for every intelligent reprobate who has a browser? That depends.

"If I were a vendor, I would be deathly afraid," says Zboray. "If I were a bank I would be deathly afraid. And anyone who is doing a company extranet should definitely worry if they have sensitive company data out there."

On the other hand, Zboray believes, consumers shouldn't panic about the state of security on the Web. "I'm not afraid of using my credit card [at e-commerce sites] -- the credit card companies are shielding me from responsibility for any fraudulent charges of more than $50." Much the same is true at online banks: A bank's FDIC insurance shields your account from loss if your bank -- online or otherwise -- is robbed.

Watching your wallet

Despite such reassurances, you still need to be careful where you take your business online. "Most sites that are doing e-commerce should have some kind of security statement with regard to how your transactions are secured," suggests Matthew Devost, senior analyst for Security Design International, a company that provides security consulting to large corporations and e-commerce companies. Look for that statement and read it carefully before you provide personal information to a site.

If a site doesn't carry such a statement, and you're doing more than making a purchase there, call and grill a knowledgeable company representative on how safe the site is. Ask if the site uses an outside firm to test its security. Companies generally don't like to provide much detail--because they don't want to give away any secrets -- but you need to make sure that they're taking measures to protect their site from intruders.

"At the moment, only a small percentage of people call us to ask about security," says Quote.com's Pedersen. "It's mostly those who understand the technology and are concerned about how we will protect their personal data concerning their net worth. But I think these questions will become increasingly common as people begin to understand the vulnerabilities. I think people should be asking these questions."

No safety in numbers

Of course, the Web will never be entirely free of security threats. "There are a lot of smart people out there," says Devost. "And they will always find a way in if there is something they want." And unfortunately, there's no easy way to tell how safe a site is. That's partly because sites are reticent about divulging security information and partly because many sites are unaware of the risks.

"I see a time where there might be a Good-Housekeeping­-style seal of approval for the security of sites," says Devost. "There are organizations that do that now for privacy. Why not for security?"

Oh, and another thing. If you're a Web site manager, don't make the mistake of challenging a hacker. I told Eran Reshef about the news site's suggestion that Perfecto's business model was nothing more than a snake-oil pitch. Within 30 minutes, Reshef told me, Perfecto had gained access to the source code on the news site's server. He added, "That means I can do pretty much anything, including shut down the site."

But since Reshef is a Boy Scout, the Web site in question managed to escape unscathed -- this time. But if I had a Web-based business -- or any plans to open one -- I'd be thinking very seriously about hiring a bodyguard.