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Outmanoeuvred at their own game, antivirus makers struggle to adapt

Outmanoeuvred at their own game, antivirus makers struggle to adapt

By Nicole Perlroth, The New York Times | Updated: 1 January 2013 12:38 IST

The antivirus industry has a dirty little secret its products are often not very good at stopping viruses.

Consumers and businesses spend billions of dollars every year on antivirus software. But these programs rarely, if ever, block freshly minted computer viruses, experts say, because the virus creators move too quickly. That is prompting start-ups and other companies to get creative about new approaches to computer security.

"The bad guys are always trying to be a step ahead," said Matthew D. Howard, a venture capitalist at Norwest Venture Partners who previously set up the security strategy at Cisco Systems. "And it doesn't take a lot to be a step ahead."

Computer viruses used to be the domain of digital mischief makers. But in the mid-2000s, when criminals discovered that malicious software could be profitable, the number of new viruses began to grow exponentially.

In 2000, there were fewer than a million new strains of malware, most of them the work of amateurs. By 2010, there were 49 million new strains, according to AV-Test, a German research institute that tests antivirus products.

The antivirus industry has grown as well, but experts say it is falling behind. By the time its products are able to block new viruses, it is often too late. The bad guys have already had their fun, siphoning out a company's trade secrets, erasing data or emptying a consumer's bank account.

A new study by Imperva, a data security firm in Redwood City, Calif., and students from the Technion-Israel Institute of Technology is the latest confirmation of this. Amichai Shulman, Imperva's chief technology officer, and a group of researchers collected and analyzed 82 new computer viruses and put them up against more than 40 antivirus products, made by top companies like Microsoft, Symantec, McAfee and Kaspersky Lab. They found that the initial detection rate was less than 5 percent.

On average, it took almost a month for antivirus products to update their detection mechanisms and spot the new viruses. And two of the products with the best detection rates - Avast and Emsisoft - are available free; users are encouraged to pay for additional features. This despite the fact that consumers and businesses spent a combined $7.4 billion on antivirus software last year - nearly half of the $17.7 billion spent on security software in 2011, according to Gartner.

"Existing methodologies we've been protecting ourselves with have lost their efficacy," said Ted Schlein, a security-focused investment partner at Kleiner Perkins Caufield & Byers. "This study is just another indicator of that. But the whole concept of detecting what is bad is a broken concept."

Part of the problem is that antivirus products are inherently reactive. Just as medical researchers have to study a virus before they can create a vaccine, antivirus makers must capture a computer virus, take it apart and identify its "signature" - unique signs in its code - before they can write a program that removes it.

That process can take as little as a few hours or as long as several years. In May, researchers at Kaspersky Lab discovered Flame, a complex piece of malware that had been stealing data from computers for an estimated five years.

Mikko H. Hypponen, chief researcher at F-Secure, called Flame "a spectacular failure" for the antivirus industry. "We really should have been able to do better," he wrote in an essay for Wired.com after Flame's discovery. "But we didn't. We were out of our league in our own game."

Symantec and McAfee, which built their businesses on antivirus products, have begun to acknowledge their limitations and to try new approaches. The word "antivirus" does not appear once on their home pages. Symantec rebranded its popular antivirus packages: its consumer product is now called Norton Internet Security, and its corporate offering is now Symantec Endpoint Protection.

"Nobody is saying antivirus is enough," said Kevin Haley, Symantec's director of security response. Mr. Haley said Symantec's antivirus products included a handful of new technologies, like behavior-based blocking, which looks at some 30 characteristics of a file, including when it was created and where else it has been installed, before allowing it to run. "In over two-thirds of cases, malware is detected by one of these other technologies," he said.

Imperva, which sponsored the antivirus study, has a horse in this race. Its Web application and data security software are part of a wave of products that look at security in a new way. Instead of simply blocking what is bad, as antivirus programs and perimeter firewalls are designed to do, Imperva monitors access to servers, databases and files for suspicious activity.

The day companies unplug their antivirus software is still far off, but entrepreneurs and investors are betting that the old tools will become relics.

"The game has changed from the attacker's standpoint," said Phil Hochmuth, a Web security analyst at the research firm International Data Corporation. "The traditional signature-based method of detecting malware is not keeping up."

Investors are backing a new crop of start-ups that turn the whole notion of security on its head. If it is no longer possible to block everything that is bad, the thinking goes, then the security companies of the future will be the ones whose software can spot unusual behavior and clean up systems once they have been breached.

The hottest security start-ups today are companies like Bit9, Bromium, FireEye and Seculert that monitor Internet traffic, and companies like Mandiant and CrowdStrike that have expertise in cleaning up after an attack.

Bit9, which received more than $70 million in financing from top venture firms like Kleiner Perkins and Sequoia Capital, uses an approach known as whitelisting, allowing only traffic that the system knows is innocuous.

McAfee acquired Solidcore, a whitelisting start-up, in 2009, and Symantec's products now include its Insight technology, which is similar in that it does not let any unknown files run on a machine.

McAfee's former chief executive, David G. DeWalt, was rumored to be a contender for the top job at Intel, which acquired McAfee in 2010. Instead, he joined FireEye, a start-up with a system that isolates a company's applications in virtual containers, then looks for suspicious activity in a sort of digital petri dish before deciding whether to let traffic through.

The company has received more than $35 million in financing from Norwest, Sequoia Capital and In-Q-Tel, the venture arm of the Central Intelligence Agency, among others.

Seculert, an Israeli start-up, approaches the problem somewhat differently. It looks at where threats are coming from - the command and control centers used to coordinate attacks - to give governments and businesses an early warning system.

As the number of prominent online attacks rises, analysts and venture capitalists are betting that corporate spending patterns will change.

"Technologies that once were only used by very sensitive industries like finance are moving into the mainstream," Mr. Hochmuth said. "Very soon, if you are not running these technologies and you're a security professional, your colleagues and counterparts will start to look at you funny."

Companies have started working from the assumption that they will be hacked, Mr. Hochmuth said, and that when they are, they will need top-notch cleanup crews.

Mandiant, which specializes in data forensics and responding to breaches, has received $70 million from Kleiner Perkins and One Equity Partners, JPMorgan Chase's private investment arm.

Two McAfee executives, George Kurtz and Dmitri Alperovitch, left to start CrowdStrike, a start-up that offers a similar forensics service. Less than a year later, they have already raised $26 million from Warburg Pincus.

If and when antivirus makers are able to fortify desktop computers, chances are the criminals will have already moved on to smartphones.

In October, the F.B.I. warned that a number of malicious apps were compromising Android devices. And in July, Kaspersky Lab discovered the first malicious app in Apple's app store. The Defense Department has called for companies and universities to find ways to protect mobile devices from malware. McAfee, Symantec and others are working on solutions, and Lookout, a start-up whose products scan apps for malware and viruses, recently raised funding that valued it at $1 billion.

"The bad guys are getting worse," Mr. Howard of Norwest said. "Antivirus helps filter down the problem, but the next big security company will be the one that offers a comprehensive solution."

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