The Morning Download comes from the editors of CIO Journal and cues up the most important news in business technology every weekday morning. Send us your tips, compliments and complaints. You can get The Morning Download emailed to you each weekday morning by clicking here.
Good Morning. Amid growing concerns about network vulnerability, chief information officers are finding that more of their jobs involve scrutinizing the security of third-party vendors. As the Journal’s Jennifer Smith and Emily Glazer report, big banks are turning the spotlight on their most trusted third-parties–the lawyers with access to everything from trade secrets to market-moving details on mergers and acquisitions. Banks are demanding that firms undergo outside security audits, they report, and implement their own vendor-security programs to prevent data from leaking out through third-party contractors the lawyers hire.
“It’s a lot more than just checking a box,” said Lorey Hoffman, chief information officer at law firm Goodwin Procter LLP. “I walk through our data centers into the [server] cage with examiners” sent by clients. Mr. Hoffman adds that his firm’s external-facing Internet sites get hit 400 to 500 times a week by third-party bots or denial-of-service attacks. “That kind of activity is the new normal and it’s hitting everybody.”
Last year’s Target Corp. breach brought home the cyber vulnerability exposed by third party relationships. Hackers first accessed Target’s systems using the credentials of a refrigeration contractor. After the data breach this summer at J.P. Morgan Chase & Co., which compromised contact information for about 76 million households, big banks are working to reduce their own attack surfaces. While that breach isn’t believed to have originated with a third-party vendor, banks want to do everything they can to prevent future hackers from creeping in disguised in a white-shoe firm’s expensive wingtips.
Email ‘be gone,’ one reader says. A CIO Journal story on Oct. 23, based on interviews with CIOs, concluded that email will remain the dominant communications platform for businesses for a long time. Case closed? Not quite. One reader later wrote in with hopes that the era of email fades sooner rather than later. “I am personally excited to see the emergence of enterprise social networks enabled by mobile, and I am hopeful that we can move organizations to a better way of collaborating and socializing. Legacy be gone,” writes Paul Stokes, CIO of the University of Victoria, in British Columbia.
Former Dow Jones CIO now heading enterprise strategy at AWS. Stephen Orban, former CIO and global head of technology at Dow Jones & Co., has moved on to head enterprise strategy at Amazon Web Services. In a blog post earlier this month, Mr. Orban wrote that he believed in cloud computing so strongly that “I decided to dedicate the next chapter of my career to it.” Dow Jones tells CIO Journal it has hired an interim CTO, Paul Meller, while it searches for a successor.
Good times for cyber insurance providers. Business at Miller Insurance Services LLP has doubled in 2014, with the London company selling “hundreds” of policies following several high-profile data breaches. Nick Fearon, who leads Miller’s cyber insurance practice, tells CIO Journal that business will remain robust for the foreseeable future. “We’re never going to be ahead of the hackers because we’re not that clever,” said Mr. Fearon.
How is our digital revolution doing? Guest Columnist Irving Wladawsky-Berger finds the proper response in a line predating Google by almost 140 years: “It was the best of times, it was the worst of times… we had everything before us, we had nothing before us…” Technology has created new opportunities, transforming the lives of billions in the process. At the same time, partly due to technology, employment and income are declining. “It was the spring of hope, it was the winter of despair.”
TECH TACKLES EBOLA
In the fight against Ebola, connectivity can save lives. To stop the next pandemic, connecting the world’s poorest countries to the Internet is a good place to start, writes the WSJ’s Christopher Mims. Ivory Coast, for example, which is so far Ebola-free, is capitalizing on mobile connectivity of its citizens by sending out millions of mass text messages warning about the dangers of Ebola and how to avoid catching it.
Ebola and genetic experiments may one day have a cheap paper-based test. Much like over-the-counter pregnancy tests, it may be possible to carry out complex genetics experiments or cheap tests for viruses like Ebola with paper-based tests, writes MIT Technology Review’s Karen Weintraub. Boston University synthetic biologist James Collins has found a way to “print the ingredients for simple DNA experiments on paper, freeze-dry them, and use them as much as a year later.
Paul Allen ups Ebola funding. Microsoft co-founder Paul Allen has pledged $100 million to fight the spread of Ebola, the Journal’s Brian R. Fitzgerald reports. “The Ebola virus is unlike any health crisis we have ever experienced and needs a response unlike anything we have ever seen,” Mr. Allen said on his website, Earlier Facebook Inc. CEO Mark Zuckerberg said he and his wife would donate $25 million.
MORE TECHNOLOGY NEWS
Do you know what apps your employees use? Unauthorized cloud-based software is proliferating in the workplace, causing regulatory and security challenges for companies that often don’t even know their employees are using it, the WSJ’s Deborah Gage reports. Some of the services are well known, such as Dropbox and Facebook. But at some companies, employees are tapping hundreds of cloud-based apps to perform functions ranging from Web conferencing to conducting surveys to sharing photos.
U.S. fights critiques of how Web is managed. U.S. officials are fighting off another upswell of dissent from countries irked by the way the Internet is managed, the WSJ’s Drew Fitzgerald reports. More than 190 nations are haggling at the International Telecommunication Union’s conference over whether the ITU’s mandate covering “information and communication technology” specifically includes the Internet, which didn’t exist for most of the organization’s 149-year history. U.S. officials are their allies want to keep the Web separate, while countries including Russia and several Arab states want to give the ITU a stronger hand.
H-P looks to sell corporate-networking business in China. The company is expected to sell at least 51% of H3C Technologies Co., reports the Journal’s Rick Carew and Dana Mattioli. H-P and other U.S. tech companies have come under pressure in China following revelations that the U.S. government collected data and other information at home and abroad; in some cases using infrastructure belonging to American companies.
Google’s Sundar Pichai becomes new product czar. Larry Page is transferring leadership of core Google Inc. products to Sundar Pichai, reports Re/code’s Liz Gannes and Kara Swisher, citing sources close to the situation. Mr. Pichai will now oversee research, search, maps, Google +, commerce and ads and infrastructure, in addition to Android, Chrome and Google Apps.
UBS CIO: blockchain technology can massively simplify banking. UBS AG CIO Oliver Bussman says the underlying technology behind Bitcoin, called blockchain,” has the greatest potential to disrupt the financial services sector, the WSJ’s Anna Irrera reports. Blockchain is the open, decentralized online ledger which verifies transactions in the digital currency. The Bank of England agreed in its September report, when it described blockchain as a “significant innovation” that could have “far-reaching implications.”
New York City Police to be equipped with mobile devices. The New York Police Department will outfit officers with smartphones and many patrol cars with tablets, the New York Times reports. Among the apps pre-installed will be a mobile version of the NYPD’s Domain Awareness System, which connects video feeds from closed-circuit cameras with law enforcement databases. Funding for the 35,000 smartphones and 6,000 tablets comes from the city’s financial settlement with French bank BNP Paribas, fined for violating financial sanctions.
A win for Microsoft’s Surface business. Among the happy surprises for Microsoft Corp. investors in the company’s successful quarterly financial report was the perkiness in its Surface business, the WSJ’s Shira Ovide reports. Microsoft reported that quarterly sales of the two-year-old tablet-style computer more than doubled from a year ago to $908 million.
Holiday tweet: help wanted. Heading into the holiday shopping season, retailers are bombarding customers’ inboxes and Twitter feeds with help-wanted ads, as traditional hiring methods are failing to produce enough job candidates, the WSJ’s Eric Morath reports. The national unemployment rate fell to 5.9% last month, the lowest reading since 2008. Holiday hires last year surpassed their prerecession peak and the National Retail Federation expects companies will match or exceed that level this year.
Italian lawmakers plan free Wi-Fi to bridge digital gap with Europe. A plan by legislators in Italy to make Wi-Fi free in thousands of public places aims to bridge a gap with other European nations in broadband penetration, e-government and other digital services, Reuters reports. Under the plan, large shops, taxis, airports, law courts and other public places would be required to set up an Internet connection and offer no-password wireless access for no charge.
FCC fines two carriers $10 million over data breach. The agency said that TerraCom and YourTel America exposed the personal data of up to 300,000 low-income consumers, writes the Journal’s Gautham Nagesh. Dale Schmick, operating chief at the two carriers, blamed a security breach and said the company “has rigorous privacy safeguards in place to prevent such data from public disclosure.”
U.S. TV airwaves auction for smartphones delayed to 2016. The Federal Communications Commission delayed to early 2016 an auction of the U.S. airwaves surrendered by television stations that’s meant to help feed the growing number of mobile devices, Bloomberg reports. A lawsuit by broadcasters over the auction procedure has “introduced uncertainty,” said the agency’s incentive auction team leader. The airwaves to be relinquished by the TV stations are prized for their ability to travel long distances and penetrate buildings.
Ballmer reaps tax benefit from Clippers deal. Microsoft Corp. ex-CEO Steve Ballmer got more than a basketball team in his deal to acquire the Los Angeles Clippers – he also stands to gain as much as $1 billion in tax benefits, the Financial Times reports. An analysis of U.S. tax laws shows that Mr. Ballmer could claim about half of the $2 billion purchase price in current terms over the next 15 years against his taxable income. The credits can be claimed under a little-known feature of the tax code covering so-called active owners of sports franchises.
EVERYTHING ELSE YOU NEED TO KNOW
ECB says most of Europe’s banks are healthy. European regulators said that all but 13 of the continent’s leading banks have enough capital to weather a financial storm, an attempt to put to rest years of anxiety about the industry’s health. Nine Italian banks failed the health checks, the biggest concentration of troubled banks in the ECB’s stress tests. Of the 123 banks that the European Banking Authority tested, 24 failed to show that their capital ratios would avoid sinking below 5.5% of their risk-adjusted assets in a deteriorating economy, and another 14 banks came close to failing.
Darker global outlook has bond bears hibernating. Weaker economic indicators have led many investors to reverse their recent opinion that a bond-market downturn was near. It is a change from just a few months ago, when many strategists and investors were predicting that a 30-year bull market in Treasurys was close to an end.
A single firm builds a hill of copper. One buyer has snapped up more than half the copper held in London Metal Exchange warehouses, giving it control over a crucial source of supply and raising concerns among traders about the potential for higher prices. Although the exchange doesn’t identify the owners of metals, eight traders and brokers working for different firms active on the LME said they believe Red Kite Group, a London hedge-fund manager that focuses on metals trading, was the one buying.