The United States has long been a leader in technological innovation, with companies such as Google, Apple, Facebook, and Amazon paving the way. As of October 2021, 62% of global tech unicorns have emerged from the US, with China accounting for 19%, while only 12% have come from the EU. One explanation for this delta is the size of the regulatory regime in the EU, which is known to favor larger companies and make it more expensive and harder for small companies to enter the market.

It’s been only 29 years since the EU transitioned from a trading bloc to a union of 27 member states with coordinating policies. Considering the complications that such a transition represents, it’s not surprising that, relative to the US and China, the EU has more bureaucracy. However, things are changing, as there is now an adult generation that has grown up with the EU as part of their national identity. They have also seen the benefits of that partnership manifest for much of their lives. While the member states of the EU will continue to evolve how they work with each other, they have come a long way in terms of coordination and cooperation and have a solid foundation to build upon.

Another argument that I have heard is that the EU’s focus on creating a stable and cooperative union took away from the focus on technological and market growth. That may be true but over the last decade, they have focused on creating regulations they hope will create a Digital Single Market which they hope will address this problem. During this same period, the US regulatory framework largely stood still, but they also experienced the most rapid growth of technology companies of any nation during this time.

It’s worth noting that the EU’s approach to regulation has been very implementation-specific when compared to the U.S. approach to similar regulation, as seen with the EIdAS, the EU’s digital signature legislation, and the associated supporting efforts which choose which technologies must be used. The first version of which left the topic of interoperability as a footnote and ignored the concept of reciprocity. This essentially created member-state monopolies around the legislation where country-to-country transactions would still be signed on pen and paper. That did change a few years ago, but better technological approaches to solving the associated problems were established and proven since the initial legislation was proposed two decades ago, and their adoption was held back due to this legislation’s technical specificity.

On the other hand, there is a credible argument to be made that the US has failed when it comes to creating meaningful legislation to protect its citizens from the overreach of tech giants and the increasingly online nature of daily life. In fact, many would argue that, at least for the last decade, they have failed when it comes to creating meaningful legislation, period. This failure has created an opportunity for the EU to step up and leave its mark on the global technology industry, which it certainly has been doing.

What is noteworthy here is that many of these regulations are being framed as globally binding. The concept being applied here is called extraterritoriality, which basically means that the jurisdiction of the law extends beyond the physical borders of the country or region that has enacted it. The argument is that by extending the reach of its laws to cover EU citizens wherever they may be, they are protecting the rights of its citizens and promoting a level playing field for all companies, regardless of where they are based.

But what is a regulation without teeth? This is why these regulations usually empower the EU member states to impose fines on companies, regardless of where they exist, if the associated regulations are found not to have been met. The trend to leverage extraterritoriality is sure to continue and likely accelerate. In the case of security, one such upcoming regulation from the EU is NIS2, which is looking to regulate incident response handling, again with potential fines for non-compliance.

It’s not to say that all of this EU legislation is bad, though I would argue that the more explicit it is on technical details, the worse it is. For example, consider the EU Cookie legislation–it has resulted in the online equivalent of graffiti all over the internet with no meaningful improvement for users.

As I think about this, one of the things I struggle with is that the geographic nexus of a business is increasingly not relevant to users. In one respect, this is an argument for exactly what the EU is doing. But there are also 195 sovereign nations, each with its own cultural norms and political interests. Can they all regulate online businesses regardless of where they are located? What will the long-term effects of this global regulatory trend be?

Of course, the answer is that only those countries that have enough financial clout to get away with this, but even then, would the EU want its businesses regulated in this way by the US or China? And what do you do when the regulations conflict? Does the future require proof of citizenship before using any online service?

Peter Drucker once said, “You cannot manage what you cannot measure.” This quote is applicable in many aspects of technology development and business management. Neglecting measurement often leads to problems. Another relevant saying is “Lies, damned lies, and statistics.” The importance of what we measure and how we measure it cannot be overstated when using data to manage complex systems.

In enterprise IT, endpoint management systems are often touted as the source of truth for the environment, but this is misleading. They measure the intended state of the devices, not their actual state. In other words, they track what they believe they have done, rather than whether the change was correctly and successfully deployed. This might seem similar or sufficient, but it is not. Endpoint systems have many different software and settings that can interact in unexpected ways, making the data they provide nearly useless for risk assessment, according to most security professionals.

As for EDR systems, I would argue that they are simply advanced anti-viruses. They try to protect the operating system which is largely intractable. give the enterprise visibility to attacks and infections, while providing minimal tools for a response. To be clear EDR is valuable, but its overhead is high and it is not designed for device intelligence or observability; its purpose is detection and response.

If enterprises had proper investments in observability, they could discover outages before users report them. They could use the intelligence about the state and usage of their devices to proactively defend and isolate their assets, turning what has been a reactive and inaccurate dataset into a tool to protect their networks and improve user productivity.

There is a lot to learn from Cloud deployments when looking at how to solve these problems. For example, unlike most IT departments, cloud assets are heavily instrumented with logs being centralized, with dashboards reporting real-time uptime and health. There is an entire market of solutions focused on enabling this visibility, just consider how many log aggregation and analytics offerings such as Stackdriver, CloudWatch, and New Relic exist. 

Additionally, these assets typically have cross-platform machine identities that are used to facilitate security domain separation, and interestingly these identities are increasingly using hardware-backed keys to secure those credentials. These credentials are also used to help each endpoint in those deployments achieve some basic level of self-protection, where the credentials used by these assets will capture the posture of the machines and the peers they interact with, particularly when crossing security domains and enforcing policy based on these interactions.

I believe that over the next decade, enterprise IT deployments will increasingly resemble cloud deployments, with a focus on zero-trust design patterns. However, for that to happen there are product gaps that will need to be filled. For example, there is no turnkey solution for desktop state observability with structured data that can be used for real-time policy decisions. The big tech companies have built these solutions for their own deployments but there is nothing turnkey in the market that addresses this need. Then there is the issue of how to authenticate the device and its state. There are lots of pieces in this area but no solutions. If you are going to use the observed device state for the policy you also have to worry about the validity of the associated data, while this is not possible in existing systems to totally solve this problem there are lots of things that can be done to make data more reliable.

Finally, as we see this evolution, there is a need to rethink the way enterprises approach identity. It will become an alternative to Active Directory. No security practitioner would design their source of truth in the enterprise in the same way as Active Directory is today.

The United States government and big companies like Google have both played a significant role as protectors in their respective spheres. The US government, as the world’s leading military power, has tried to serve as a global peacekeeper and defender of democracy through its high military spending. Similarly, Google, as a success in the technology industry, has leveraged its financial power from advertising to fund various initiatives to protect and grow the internet and the web.

However, in recent years, Google has undergone significant changes. The COVID-19 pandemic accelerated the need for companies to adapt and re-envision themselves, and Google was no exception. The company, in a relatively short period, hired many externally sourced professional managers and underwent a series of re-organizations and corresponding cultural changes that have fundamentally changed the company forever. This, combined with recent fiscal irresponsibility in hiring, and inability to drive a cohesive and integrated product strategy (how many messengers does one company need after all?), led to Google’s first-ever layoffs, which included a significant impact on internet investments, and being transparent my own job.

This raises important questions about the future of internet protection. While Google was clearly not the exclusive protector of the internet, its direct and indirect investments in the internet have played a significant role in protecting it. It seems unlikely that moving forward, they can be counted on in the same way. We need to see other large organizations whose businesses similarly take a critical dependency on a safe and secure internet step up and fill the gap.

This is problematic for a number of reasons, one of the largest being that public companies are, to a fault, focused on quarter-to-quarter growth. That is of course the right thing for their shareholders, at least in the near term, but the sort of infrastructure investments necessary to secure the Internet can take a decade or more of investment. That’s quite hard for an organization to justify when the most valuable resource they have is engineers when those engineers can be spent working on securing and improving their private networks or directly generating revenue.

Many of these organizations already donate to security non-profits such as ISRG and OpenSSF and work through them to make some of these improvements to the Internet, but the funding to these organizations is often piecemeal and usually only aligned with the latest security trends. Furthermore, these investments are often associated with pet projects of the sponsoring companies rather than taking a strategic and proportional investment into different problem areas. A great example of this is how many of the most important open-source projects lack the basic funding necessary to sufficiently secure them long-term.

One approach to mitigating this is to lean on these security non-profits more and give them more autonomy and funding. This would allow them to take on a larger and more independent role via a larger commitment to funding with appropriate multi-year roadmaps, milestones, and success criteria approved by some mix of funding stakeholders invited experts in the specific areas in question and key engineering participants from relevant funding organizations. This would create predictable funding and a space where long-term roadmaps for research, securing, and improving the internet can be established without relying on a small number of companies with business models that support direct investment in those activities.

This approach would have its own challenges, for example, like most non-profits, these organizations will struggle to be impact focused rather than focused on their own pet projects or philosophies. That said, this is largely part of the human condition and something that always needs to be managed. The answer to how to manage this is surely buried in what systematic approach is used for choosing initiatives, measuring their success, and having lots of meaningful milestones along the way to enable them to checkpoint, course correct and the will power kill projects as appropriate.

In summary, the role of a protector comes with great responsibility. The recent changes at Google highlight the need for a diverse set of stakeholders to come together to safeguard the internet and the web and take less dependency on one company carrying too large of the load when it comes to protecting the internet.

In recent years, the SOC2 and ISO 27001 badges have become a staple at the bottom of nearly every SaaS website. This is largely due to the growing number of startups providing solutions for SOC2 and ISO 27001 audits, such as Vanta and Secureframe. These companies greatly reduce the time and money necessary to comply with various audit regimes. The fact large companies are increasingly incorporating the requirements for SOC2 and ISO 27001 audits into their procurement process of course also drives the demand for these audits. With that said it’s important to understand what these badges really mean and what they don’t.

One common misunderstanding is that audits are ongoing assessments of an organization’s security practices. In reality, audits are almost always point-in-time retrospectives, meaning they only reflect what was the case at the time of the audit and not what is currently the case. This is a material point, as many small organizations view the work associated with these audits as an annual tax, rather than integrating the associated practices into how they work.

Another factor to consider is the scope of the audits. The entity being audited gets to choose the scope, and it’s common for startups to exclude their IT environment (such as desktops) from their audits. This means that not all SOC2 audits are created equal, and you may not be getting the full picture.

Beyond that when audits involve sampling data, it is usually the subject of the audit who chooses the sample. This means that either by accident or on purpose, the analysis may be based on the most favorable data.

There is also the concept of accepted and managed risks. An organization can often get by with poor security practices as long as they acknowledge the risk and have a plan to resolve it within a fixed period of time. This period of time can be continuously extended, allowing the organization to avoid addressing the issue indefinitely.

Then you need to remember that the auditor works for the organization being audited. They want to be hired again next year, so they may be willing to accept the organization’s interpretation of the expectations in order to secure future business. This means that the results of the audit may not be completely impartial.

And finally, there is the question of the qualifications of the auditors conducting these assessments. Often, they are exclusively accountants and not technologists, meaning that they are not equipped to evaluate the technical security or correctness of the systems being audited. Instead, they are essentially tasked with assessing if the checklist represented in the audit regime can be reasonably deemed as met. 

In conclusion, while SOC2 and ISO 27001 audits have good intentions, they are far from sufficient in assessing an organization’s security practices. The fact that the audits are point-in-time retrospectives, the scope of the audit is chosen by the entity being audited, the auditor works for the organization, and the results may be based on favorable data, all contribute to the limitations of these audits. As a result, it’s important to be aware of these limitations and not rely solely on a SOC2 badge as a sign of a secure organization.