Is it true that telecom equipment companies are basing their purchasing decisions on where the design and development of components and modules takes place?
According to embedded computing platform developer Kontron AG , which undertakes its design and R&D processes in Montreal, Canada, it's already happening: The company, best known for its AdvancedTCA (ATCA) range of modules, claims it's wrestling business away from (unidentified) competitors that have design and development exposure in Asia/Pacific, particularly China.
And if that's more than just a one-off, the implications could be huge for telecom systems vendors and their suppliers.
Sven Freudenfeld, Business Development, Telecom for North America at Kontron, says that, increasingly, customers initiate discussion on where engineering takes place. "As we go further into cloud computing, trust is necessary to build platforms that will be deployed in the cloud. Moving the central office to the cloud where carriers no longer have access to hardware, they're forced to rely on what they don’t control," says Freudenfeld.
"When carriers owned their network hardware, they could handle situations as they arose -- they could see and identify an actual breach," adds Freudenfeld. "Now, with discovery left to third parties, reaction time is stretched out substantially. Carriers are demanding all network platforms -- interfaces, software, firmware, hardware -- be secure."
And for some (many?), China is regarded as posing a security threat, either directly or indirectly. Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) know all about that: They are on the 'not trusted' list in the US, preventing them from supplying telecom equipment to the federal government or US companies. The main concern is that technology developed in China might include hidden back doors that would be used to either eavesdrop or disrupt networks, though no concrete evidence has been forthcoming. (See Nearly Everyone Trusts Us – Huawei CEO, US vs Huawei/ZTE: The Verdict and China Lashes Out at 'Cold War Mentality'.)
Customer concerns are not limited to just steering clear of China, though. Systems vendors are delving deeper into basic design methodology -- how network products are developed. Freudenfeld says there's a need for greater focus on: the design and creation of platforms with security as a central element; regulatory compliance; and the ability to identify weak points in a network.
There are many such weak points, he claims, and these will become more obvious with the introduction of virtualization, for example, or machine-to-machine (M2M) implementations, as each layer and each machine becomes a potential weakness.
And virtualization is going to happen: Indeed, Kontron is embracing it. (See Kontron Integrates OpenStack.)
There's reason to believe that virtualization is a major security concern. At the 2013 RSA Conference in San Francisco, the Cloud Security Alliance identified the Notorious Nine -- the top nine cloud computing threats for 2013. Of the top three concerns, number one is data breaches. In this case, a virtual machine, for example, could use side-channel timing data to extract private cryptographic keys in use by other virtual machines on the same server. The report indicated that one single client application flaw could allow a hacker access to all of the data -- not just that one client's.
The second top concern is data loss -- the kind where data is here and, then, well, it's not. Finally, account or service traffic hijacking. Once a hacker accesses credentials, eavesdropping on transactions and activities, data manipulation, information falsification, and moving clients to illegitimate sites, are all possible.
What cloud computing has done by concentrating a wealth of assets is magnify the consequences of breaches. On one hand, it's a bastion of data sharing -- on the other, a potential nightmare.
"Regulation will be especially important with telecom equipment and delivering the cloud. While there's great potential for software-defined anything --infrastructure, radio, networks -- there’s always a security element," Freudenfeld explained. While working groups and regulatory bodies exist, more progress will be necessary over the near and long term.
The security threat perception isn't limited to China, though, especially amid the NSA headlines and the FBI’s request for Facebook and Google to enable access for US government surveillance. (See Obama Weighs In on NSA Data Collection, Euronews: Merkel's Mad as Hell at NSA and NSA Humor Tops Congressional Hubris.)
Actually implementing back doors, or deliberately compromised telecom equipment, is very rare. It's the accidental vulnerabilities that are more common. But it's not that difficult to believe that Kontron customers are indeed citing security fears for a shift in procurement processes, especially as technology developments move faster than security advances and implementations can keep up with. Technical defenses may still be inadequate or not sufficiently implemented -- and that may leave non-technical ones, such as specifying that design and development take place in a more trusted environment, as the only immediate way to begin to alleviate fears.
— Carolyn Mathas, contributing editor, special to Light Reading