BREAKINGVIEWS - Hackers' successes will force security costs up

A Sony PlayStation gaming console controller is displayed at an electronic shop in Tokyo May 3, 2011.

NEW YORK (Reuters Breakingviews) - This may go down as the year of the hack, with Sony and Amazon among the targets. But the compromising of information on almost 40 million RSA security tokens, which protect sensitive military and financial networks, may be the most serious instance. Cybersecurity efforts -- and spending -- suddenly look inadequate.

RSA's devices are familiar in the worlds of banking and government. The keychain-like gadgets generate a six-digit number every minute or so. Users must enter the number along with a user name and password to access a network. Unfortunately, a sophisticated attack on RSA, the security division of EMC (EMC.N), suggests that a group of hackers found a way around the first part of the process.

Fortunately, that still left other security walls in place, such as passwords. Moreover, the attacks seemed extremely specific -- defense contractors including Lockheed Martin (LMT.N) seem to have been the only parties that have been subject to attempts to break into their systems. Unfortunately, this relatively good news isn't enough in the world of computing security.

Passwords can be broken through simple means such as calling users and saying that "IT needs your password to update your system". And financial companies can't rest easy knowing they haven't yet been targeted. A foreign power willing to steal sophisticated U.S. weapons systems may also be interested in destabilizing America's financial system -- and enterprises in places not friendly with the West might worry the same the other way around.

RSA's offer to issue new tokens should prevent further intrusions this time. Yet the possibility that companies, especially financial institutions, could have seen their crown jewels exposed will surely cause consternation in executive suites. And with computer networks increasingly critical to global business and powerful technology readily accessible to governments, criminals and amateur hackers alike, the recent attacks won't be the last such effort.

Consultancy Forrester estimates that security ate up about 8 percent of North American and European corporate IT budgets in 2007, and that figure grew to 14 percent in 2010. With companies now anxious not to be the ones hacked next time, that figure looks sure to go up.

CONTEXT NEWS

-- RSA, the security division of EMC, on June 6 offered to replace customers' security tokens after defense contractors including Lockheed Martin were attacked by hackers. The assaults were made possible by a breach of RSA's internal network that in turn compromised the security tokens. The company admitted on March 17 that there had been an intrusion.

-- SecurID is an authentication system that allows two forms of security. The keychain-like devices generate a six-digit number every minute or so. Users must enter the number along with a user name and password to access a network.

-- RSA offered to replace tokens for customers and is working to bolster other layers of customers' security. RSA has issued more than 40 million of the devices.

-- RSA statement: link.reuters.com/zud99r

(Editing by Jeffrey Goldfarb and Martin Langfield)

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)