E-Commerce Security

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Without trust, most prudent business operators and clients may decide to forgo use of the Internet and revert back to traditional methods of doing business. To counter this trend, the issues of network security at the ecommerce and customer sites must be constantly reviewed and appropriate countermeasures devised. These security measures must be implemented so that they do not inhibit or dissuade the intended e-commerce operation. This paper will discuss pertinent network and computer security issues and will present some of the threats to e-commerce and customer privacy. These threats originate from both hackers as well as the ecommerce site itself. A straightforward comparison could be made of the security weaknesses in the postal system vs. security weaknesses on the Net. The vulnerable spots in both cases are at the endpoints – the customer’s computer/network and the business’ servers/network.

Information flowing in the conduit (trucks/planes and wires) is relatively immune to everyday break-ins.  Privacy issues are amongst the major drivers for improved network security along with the elimination of
theft, fraud and vandalism. Two major threats to customer privacy and confidence come from sources both hostile to the environment as well as sources seemingly friendly. Coordinated attacks on Yahoo, eBay, ZDNet, Buy.com (on their IPO day) and amazon.com generated a huge amount of publicity and a federal government response. A brief description of these attacks will be given in this paper. Another threat may originate at ostensibly friendly companies such as Double Click, Member Works and similar firms that collect customer information and route it to other firms. Much of this transaction information is able to be associated with a specific person making these seemingly friendly actions potential threats to consumer privacy.

The eradication of trust in Internet commerce applications may cause prudent business operators and clients to forgo use of the Internet for now and revert back to traditional methods of doing business. This loss of trust is being fueled by continued stories of hacker attacks on e-commerce sites and consumer data privacy abuse. Hackers demanding a ransom from an eCommerce site for not publishing customer credit card information have increased the visibility of the network security weaknesses in most business institutions. The conflict between convenience and ease-of-use vs. security has always been resolved in favor of convenience. However, recent virus attacks against Microsoft Outlook (The NIMDA, Code Red worms, the “ILOVEYOU”, “Resume” and KAK viruses) have demonstrated that convenience allows the rapid proliferation of viruses and worms throughout the Internet. Microsoft released a patch that disabled the feature that allows the “ILOVEYOU” virus to work. This is the first time a software vendor has released a patch that restricted a feature. Further, the success of the Distributed Denial of Service (DDOS) attacks against major e-commerce sites pointed out the importance of maintaining adequate security at sites not even remotely associated with the targeted e-commerce sites.

Not all of this is bad news. The majority of security breaches on the Internet occur at the endpoints, i.e., the local network, rather than the main “backbone” of the Internet. This situation allows us to make a comparison of the security weaknesses in the postal system and the Internet. The most vulnerable spots of the postal infrastructure are at the endpoints: the mailboxes at the sender and recipient sites. An example of abuse in the postal system was reported in a Roanoke Times newspaper reprint of a Los Angeles Times article that describes a thief stealing postal mail from mailboxes. The thieves were stealing bills, paychecks and other consumer identity related mail from the victim’s home mailboxes or from the postal system’s street mailboxes. This type of security breach happens much more often than one in which a thief steals directly from inside a post office. Security standards, controls and practices have been developed within the main trunks of the postal infrastructure to monitor and hopefully prevent mail interception or tampering when the letter is in the system. Similar controls are in place at the equivalent Internet network level. Controls at the endpoints on the other hand vary widely from very good (usually at the originating business) to non-existent (usually at the home computer). Consumer privacy is becoming the most publicized security issue replacing theft and fraud as top concerns in e-commerce. The DDOS attacks demonstrated that business sites did not maintain adequate security protection and intrusion detection measures. Some of the sites did not detect the compromise, which occurred months before the DDOS attacks. The hackers who penetrated these sites had the ability to deliver a data
integrity attack on the compromised business for the same amount of time. Businesses were spared simply because the hackers chose not to attack them in that manner. The recent NIMDA and Code Red worms succeeded in penetrating systems because sysadmins failed to installed vendor patches. No customer will want to use a business that distributes sensitive customer data such as credit card information, SSN information or credit limits without the knowledge or permission of the customer. Is this situation different from similar abuse in the phone or mail order business model? Not really but the major difference has to do with the speed of access to and dissemination of the sensitive data. User and system administrator awareness is becoming more important in the effort to counter eCommerce attacks. Consumers are slowly becoming aware of some security features such as encrypted WEB transactions, privacy statements by companies, etc. Internet service providers are becoming more responsive to complaints about Internet abuse originating from their sites.

E-commerce security needs to be addressed not only at the business site with its servers/network but also on the client side, which includes direct connected home computers. It is this group of computers that are the most vulnerable to attack because the level of user security training or awareness is not high at all.

E-Commerce Security Components

E-commerce security strategies deal with two issues:
protecting the integrity of the business network and its
internal systems; and with accomplishing transaction
security between the customer and the business.

The main tool businesses use to protect their internal network is the firewall. A firewall is a hardware and software system that allows only those external users with specific characteristics to access a protected network. The original design was supposed to allow only specific services (e.g., email, web access) between the Internet and the internal network. The firewall has now become
the main point of defense in the business security architecture. However, firewalls should a small part of the business security infrastructure. There are hacker tools such as SMTPTunnel and ICMP Tunnel that allow hackers to pass information through the allowed ports. The “ILOVEYOU” virus successfully penetrated fire walled networks because inbound and outbound email is allowed to pass through the firewall. The Code Red and NIMDA worms passed through firewalls because they accessed systems through the standard WEB server ports. Transaction security is critical to bolstering consumer confidence in a particular e-commerce site. Transaction security depends on the organization’s ability to ensure privacy, authenticity, integrity, availability and the blocking of unwanted intrusions. Transaction privacy can be threatened by unauthorized network monitoring by software devices called sniffer programs. These programs are most likely found at the endpoints of the network connection. There are a number of defenses against this threat such as encryption and switched network typologies. Transaction confidentiality requires the removal of any trace of the actual transaction data from intermediate sites. Records of its passage are a different thing and are required to verify the transaction actually took place. Intermediate nodes that handle the transaction data must not retain it except during the actual relaying of the data.

Encryption is the most common method of ensuring confidentiality. Transaction integrity requires methods that prevent the transactions from being modified in any way while it is in transit to or from the customer. Error checking codes are an example of such a method. Encryption techniques such as secret-key, public-key and digital signatures are the most common method of ensuring transaction privacy, confidentiality and integrity. The common weakness of these techniques is that they depend on the security of the endpoint systems to protect the keys from modification or misuse. The following paragraphs will discuss the vulnerabilities of this client-server model. Early hacker attacks were directed at the server systems because that’s where the access or data lived. As server system administrators became more experienced, it became harder for hackers to successfully penetrate the servers. The hackers then shifted their focus to the network feeding into the server. They were able to continue subverting the servers by intercepting the clear text traffic flowing in and out the server. Encrypting network traffic, converting the network to a switched topology and filtering unknown access were some of the countermeasures to this “sniffer” attack. In response to this, the hackers simply shifted to the client side and this is where most network security architectures collapse. Why? Looking at the OS architectures prevalent in the client side, we observe: an OS used in a server is also used on the client system or the PC/Macintosh OS is used on the client. If the client OS is the same as the server, then the same server defense mechanisms can be used on the client system. However, if the client OS architecture is based on Windows 9x or MacOs then there is no effective defense available. These OS platforms have no built-in security designed into them and allow anyone with access to the system to be able to gain control of it. These OS architectures will continue to be susceptible to virus and Trojan horse program attacks. The two main threats to the e-commerce client-server model are viruses and Trojan horse programs. Viruses are simply disruptive in nature but the Trojan horse programs are the more serious threat because they not only facilitate breaking into another system, they also permit data integrity attacks.

As I do my research I find this information, the points of attacker can target. It shows the vulnerability of a system exists at the entry and exit points within the system. The picture below will show an e-commerce system with several points that the attacker can target: the shopper, the shopper’s computer, the network connection between shopper and web site’s server, the web site’s server and the software vendor

As you can see, these are the target points and their exploits.

The illustration above shows the attacker is sniffing the network between client and the server. In this kind of attacking, the attacker monitors the data between the shopper’s computer and the server. He collects data about the shopper or steals personal information, such as credit card numbers.

Guessing passwords is the basic common attack of hackers. This kind of style of attack is manual or automated. Manual attack can be only successful if the attacker knows something about the shopper.  If automated, there are tools exist that use all the words in the dictionary to test user ID/password combinations, or that attack popular user ID/password combinations. The attacker can automate to go against multiple sites at one time.

The illustration above shows the using of denial of service attacks. This kind of attack is one of the best examples of impacting site availability. It involves getting the server to perform a large number of ordinary tasks, exceeding the capacity of the server to cope with any other task. For example, if everyone in a large meeting asks you your name all at once, and every time you answer, they ask you again. You have experienced a personal denial of service attack. To ask a computer its name, you use ping. You can use ping to build an effective DoS attack. The smart hacker gets the server to use more computational resources in processing the request than the adversary does in generating the request.

How can we defend ourselves on this kind of attacks above mention, those attacks are the known ones, meaning there are many of types/kinds of attacks secretly doing those things. Despite of the existence of hackers and crackers, e-commerce remains a safe and secure activity. The resources available to large companies involved in e-commerce are enormous or let’s say it’s a very BIG part of it. These companies will pursue legal route to protect their customers. The following illustration will show the defenses available against attacks.

At the end of the day, your system is only as secure as the people who use it. Education is the best way to ensure that your customers take appropriate some precautions like, install personal firewalls for the client machines, store confidential information in encrypted form, encrypt the steam using the secure socket layer (SSL) protocol to protect information flowing between the client and the e-commerce web site, use appropriate password policies, firewalls and routine external security audits and use threat model analysis, strict development policies and external security audits to protect ISV software running the website. (Information and illustrations are being gathered by the website of IBM, I’m doing some paraphrasing but mostly copy paste)

The key features of safe and secure e-commerce life is to educate ourselves concerning this manner. We choose this kind of career dealing e-commerce, so we must do these things in order to prevent losses and early bankruptcy.

Source:

http://www.hicss.hawaii.edu/hicss_35/hicsspapers/pdfdocuments/inisc01.pdf

Porter’s Five Forces VS. Blue Ocean Strategy

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The Porter’s Five Forces is focusing more on what makes an organization competitive in existing red markets and it is concerned with the micro-environmental factors affecting businesses within the same industry. Factors such as competitive rivalry, new entrants, buyer power, supplier power, and threat of substitution are factors which when conquered would not necessarily make you as a market leader since one of the criticism of this model is that businesses are not always in a web while Blue Ocean Strategy is a strategy that is undertaken by an organization in a new dimension in which its competitors haven’t ventured into. Hence in essence, the organization creates its own new market and if successful, it would make you a business leader by being aggressively innovative.

Why do business people always compare Porter’s Five Forces and Blue Ocean Strategy? Fortunately, I found out that they think it’s a battle of which of the two strategies is the most effective way in the industry. But we are talking here about business. So, there are some businesses today that facing of different problems in their company that was address to the manager, that’s why there are some strategies that exist in the firm. The results indicate that there may be a lot more opportunities in existing markets than previously thought. Most of the business press cover new and fast growing markets, but what this study clearly shows is that innovating in existing markets is an effective strategy; that competition is a much weaker force in terms of eroding the benefits from that form of innovation. And especially the type of innovation that you need to look at doesn’t have to be a radical revolutionary type of innovation; it is more incremental, adaptive, reforming and edging forward in the market.

Now, I would like to emphasize the difference between Porter’s Five Forces and Blue Ocean Strategy for a deeper understanding of what it is all about.

Porter’s model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change.

Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.

Five Forces Analysis assumes that there are five important forces that determine competitive power in a business situation. These are:

  1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices.
  2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down.
  3. Competitive Rivalry: What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you’ll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don’t get a good deal from you.
  4. Threat of Substitution: This is affected by the ability of your customers to find a different way of doing what you do.
  5. New Entrants: Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position.

The Blue Ocean Strategy take the view that innovation should create new market space, tap into unsatisfied consumer demand, and find uncontested market space. In this way, competition can become quite irrelevant because the rules of the game are waiting to be set. Blue Ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored.

W. Chan Kim and Renee Mauborgne outline a strategy process to create a long-term sustainable competitive advantage. Especially today, companies need to be more than just another competitor in a mature and over-saturated market. The cornerstone of Blue Ocean Strategy is ‘Value Innovation’. A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. The innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.

Following the ideas of Blue Ocean Strategy will help you to find and exploit those customer and market niches where you can deliver a unique value without all the competition. Here are some of the following:

  • The concept of Blue Ocean is defined by untapped market space, demand creation and the opportunity for highly profitable growth without all the competitors.
  • Some examples of Blue Ocean strategy:
    • Cirque De Soleil
    • Chrysler Minivan
    • CNN
    • Body Shop
    • Southwest / Ryanair
    • Apple with the I-Pod, I-Phone, and I-Pad platform
  • Blue Ocean is based on value innovation
    • Focus on making the competition irrelevant by creating a leap in value for buyers and your company, thereby opening up new and uncontested market space.
  • Blue Ocean Strategy pursues both differentiation and low cost simultaneously
    • Align the whole system of a firm’s activities in pursuit of differentiation and low cost.
    • Decide what you are going to do. And decide what you are not going to do and not going to offer to the customer. As an example, Southwest does not offer first class or assigned seating.
  • Six Principles of Blue Ocean Strategy
    • Formulation Principles
      • Reconstruct the market boundaries – re-define the market space
      • Focus on the big picture, not the numbers
      • Reach beyond existing demand
      • Get the strategic sequence right
    • Execution Principles
      • Overcome key organizational hurdles
      • Build execution into strategy
  • Analytical Tools and Frameworks
    • Strategy Canvas
      • Analysis of the points of competition and thus differentiation
    • Four Actions Framework
      • Based on the Strategy Canvas to create a new value curve for competing
        • Which factors that the industry takes for granted should be eliminated?
        • Which factors should be reduced?
        • Which factors should be raised well above industry standard?
        • Which factors should be created that the industry has never offered?
    • Three characteristics of a good strategy
      • Focus
      • Divergence
      • Compelling Tagline
  • Formulating Blue Ocean Strategy
    • Reconstruct the market boundaries
      • Look across alternative industries
      • Look across strategic groups within industries
      • Look across the chain of buyers
        • Purchaser
        • User
        • Influencer
        • What group do you typically focus on?
      • Look across complementary product and service offerings
        • What happens before, during and after your product is used?
        • What is the context in which your product is used?
        • What are the pain points? How can they be eliminated through a complementary product and service offering?
      • Look across functional or emotional appeal to buyers
        • Trade-off between emotional appeal v. functionality
      • Look across time
        • Trends that are decisive, irreversible, and with a clear trajectory
    • Focus on the big pictures, not on the numbers
      • Compare your business with your competitors by drawing a strategic canvas (Visual Awakening)
      • Go into the field to explore the paths to creating a Blue Ocean (Visual Exploration)
      • Draw your “to be” strategic canvas and get feedback to improve (Visual Strategy Fair)
      • Communicate and support these projects (Visual Communication)
    • Pioneer – Migrator – Settler Map
      • Classify the different business in your company
    • Reach Beyond Existing Demand – Three Tiers of Non-Customers
      • Your Market
      • First Tier – “Soon to be” non customers who are on the edge of your market, waiting to jump ship
      • Second Tier – “Refusing” non customers who consciously choose against your market
      • Third Tier – “Unexplored” non customers who are in markets distant from yours
    • Get the Strategic Sequence Right
      • Buyer Utility
        • Buyer Utility Map
          • The Six Stage of the Buyer Experience Cycle
            • Purchase
            • Delivery
            • Use
            • Supplements
            • Maintenance
            • Disposal
          • The Six Utility Levers
            • Customer Productivity (help customer do things better and faster)
            • Simplicity
            • Convenience
            • Risk
            • Fun and Image
            • Environmental Friendliness
      • Price
        • Look at network externalities (all or nothing propositions), non rival goods, excludability
      • Cost
        • Look at ‘price minus’ costing, not ‘cost plus’ pricing; focus on the value that you are offering the customer.
      • Adoption – What are the adoption hurdles in actualizing your business ideas?
  • Executing Blue Ocean Strategy
    • Overcome Key Organizational Hurdles
      • Tipping point leadership
      • Use disproportionate influence factors
      • Cognitive Hurdles – People wedded to the status quo
      • Resource Hurdles
        • Redistribute resources to your hot spots
        • Redirect resources from your cold spots
        • Horse trade resources
      • Motivational Hurdle
        • Zoom in on kingpins
        • Put kingpins in a fishbowl
      • Political Hurdles
        • Angels, devils, consigliore
    • Build Execution into Strategy
      • Power of Fair Process to change attitudes and behaviors to improve strategic execution
        • Engagement
        • Explanation
        • Clarity of Expectation – State the new rules of the game

The Facebook Era – Many are talking about this!

The webinar entitled “The Facebook Era” hosted by Clara Shih depicting us on how Facebook is highly regarded as a prime catalyst in electronic commerce and internet marketing nowadays. It shows that the innovation of technology is upgrading and that every person’s life had a new change because of its existence.

In the webinar entitled “The Facebook Era” I watched, there’s a forum of two business men with Miss Clara Shih the Author of the Facebook Era and CEO of Hearsay Social. One of the business men I’ve mentioned is James Peregrino the Farmers Insurance Agency Owner and the other one is Amit Shah the Director of Online Marketing, Mobile and Social Media @ 1-800-FLOWERS.COM. Both of them shared an interesting points base on their experience about the numbers and trends of Facebook walk through the five steps to hitting a home run a way to a successful business in Facebook. Listening to their discussion makes me come up with a realization that the technology is indeed upgrading as the year goes and that people are getting on more convenient with the latest trends of technology in our lives. Social networking nowadays surpasses email, phone calls, and the businesses started to notice about it.

According to Clara Shih, the new Facebook Business Page is not only a visual transformation of the site, it is a game changer for the marketing function. The fact that Facebook will automatically transition existing business pages to the new format over the next thirty days means that marketers will have no choice but to evolve from the static “tabs” mindset to a “Timeline” mindset based on continually fresh, engaging, and authentic content. As part of the redesign, the company has effectively shelved Facebook tabs as default landing pages, a strategy which many large corporations, small businesses, and social marketers had spent time, energy, and significant budget building out. These default tabs, while effective in certain cases for driving “likes” and other calls to action, were essentially landing pages like what you see on traditional websites. The idea is that continually fresh content will engage fans — that the best way to drive fan engagement is to make marketers more engaged and having to post, monitor, and respond more often on their Business Pages.

In my own thoughts and observation, Facebook Era is about knowing or understanding how Facebook and even other social media networks affect people’s behavior, expectations, and relationships. It is an easy way to interact and share with those people in our lives such us our family, relatives, friends, workmates, business associates, and so many other people around. One more thing, it is also an easy way to get an information of a person such as their hobbies, favorite movies, favorite food, favorite music, where they live, and etc. Now what makes the site sense and worth using? Let’s talk about this in the world of business. Business people is using this site as their money making. WHY? Simply because Facebook is the largest of the networking sites all over the world and it has about more than 845 million active users. Now HOW they make this things work? First, they register to http://www.facebook.com then after it they create their personal Facebook profile, invite friends, accept friends, post, chat, read notifications and messages, and so on and so fort. On the other hand, business people wield Facebook to jive with their businesses by building pages of their business which means Marketers must evolve and so these business people have found the best way to connect with more people in this world wide web. Through this site, they persuade Facebook users to like their business pages, linked professional or employed Facebook users’ profile promoting their products and services by inviting them using Facebook apps, and so on to attract and amaze clients. That’s how they work things out.

According to Clara Shih, As individual users, we all experience and appreciate Facebook very viscerally — sharing a photo, wishing someone a happy birthday. As developers and entrepreneurs, we may experience Facebook more tactically, continually optimizing based on new features that become available. What I spent the last year writing about in The Facebook Era is articulating why Facebook is so universally appealing and how it is transforming our culture, behavior, and relationships — both between individuals as well as between companies and individuals. My hope is with a common language for us to describe these profound changes taking place that we as a developer community can be more strategic about the kinds of applications and businesses we build for this vibrant Facebook ecosystem. Today, a World Wide Web of people is emerging, and we are all experiencing the power of trusted online identity and a ubiquitous social graph. With technologies like Facebook Connect, individuals can choose to bring aspects of their identity and friend graph with them to different websites and Web applications.

Bottom line is: The use of web indeed becomes one of the people’s need.

Sources:

http://adage.com/article/digitalnext/facebook-s-business-pages-means-marketers-evolve/233387/

https://developers.facebook.com/blog/post/220/

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