Security Unlocked


Securing Hybrid Work: Venki Krishnababu, lululemon

Ep. 29

On this week’s Security Unlocked we’re featuring for the second and final time, a special crossover episode of our sister-podcast, Security Unlocked: CISO Series with Bret Arsenault.  

Lululemon has been on the forefront of athleisure wear since its founding in 1998, but while many of its customers look at it exclusively as a fashion brand,  at a deeper level this fashion empire is bolstered by a well thought out and maintained digital infrastructure that relies on a hard working team to run it.  

On today’s episode, Microsoft CISO Bret Arsenault sits down with Venki Krishnababu, SVP of Global Technology Services at Lululemon. They discuss the ways in which technology plays into the brand, how Venki lead a seamless transition into the remote work caused by the pandemic, and how he’s using the experiences of the past year to influence future growth in the company. 

In This Episode You Will Learn: 

  • Why Venki feels so passionately about leading with empathy 
  • Why Venki saw moving to remote work as only the tip of the iceberg; and how he handled what laid below. 
  • Specific tools and practices that have lead to Venki’s success 

Some Questions We Ask: 

  • What is the biggest lesson learned during the pandemic? 
  • How does one facilitate effective management during this time? 
  • How does Lululemon view the future of in-person versus remote work? 


Venki Krishnababu’s LinkedIn: 

Brett Arsenault’s LinkedIn: 

Nic Fillingham’s LinkedIn: 

Natalia Godyla’s LinkedIn: 

Microsoft Security Blog: 



Security Unlocked: CISO Series with Bret Arsenault 


[Full transcript can be found at]

Nic Fillingham: (00:08)

Hello. Welcome to Security Unlocked a new podcast from Microsoft, where we unlock insights from the latest in news and research from across Microsoft security engineering and operations teams. I'm Nic Fillingham.

Natalia Godyla: (00:20)

And I'm Natalia Godyla. In each episode, we'll discuss the latest stories from Microsoft Security, deep dive into the newest threat intel, research and data science.

Nic Fillingham: (00:30)

And profile some of the fascinating people working on artificial intelligence in Microsoft Security.

Natalia Godyla: (00:36)

And now, let's unlock the pod. Hello, everyone. Welcome to another episode of Security Unlocked and hello, Nic, how are you doing today?

Nic Fillingham: (00:46)

Hello, Natalia. I'm doing very well, thanks. I'm very excited for today's episode because, you know, for the past, you know, 18 months-ish, however long we've been working from home, I've been almost always in workout gear and my workout gear is, uh, is predominantly by a company called, uh, Lululemon. Very nice, comfortable stuff. And the reason I'm saying this is that I actually have a very sort of legitimate reason to be standing here in front of you in my, my Lululemon workout gear, which is?

Natalia Godyla: (01:14)

Well today we have another takeover episode. So you won't be hearing from us. You'll be hearing another episode of Security Unlocked CISO series with Bret Arsenault. And today Bret is chatting with the SVP of Global Technology Services at Lululemon, Venki Krishnababu.

Nic Fillingham: (01:33)

Yeah. This is a great episode two of this new series. For those of you listening to the Security Unlocked podcast, uh, two episodes ago, we dropped the very first episode of this new series with Mark Russinovich. We got a great response from folks, so we thought let's, let's drop another episode. This is episode number two of that new series. And today Bret speaks with not an internal Microsoft leader, but an external, external class here at Microsoft, customer CISO equivalent in Venki Krishnababu from Lululemon. It's a fantastic conversation. I learned a lot about how Lululemon is, is very much a technology company and Bret talks to Venki about, about Venki's career, how he's helped steer Lululemon's technology strategy through the pandemic and what their learnings have been over the past year and how that's sort of going to influence their security strategy in the future.

Nic Fillingham: (02:22)

Fantastic conversation, and very much, uh, a really strong episode two for this series. So highly recommend that in addition to being subscribers of Security Unlocked you become a new subscriber of Security Unlocked CISO's series with Bret Arsenault, which you can find and CISO is spelled C-I-S-O. So

Natalia Godyla: (02:45)

Yes, and this is going to be the last time that we share one of these episodes in our feed. So as Nic said, if you are interested in this new series, go ahead to that link and subscribe so you don't miss any of the upcoming episodes, which will be dropping every other Wednesday.

Nic Fillingham: (03:00)

And with that, on with the pod.

Natalia Godyla: (03:00)

On with the pod.

Bret Arsenault: (03:06)

Today, I have a special guest joining me, Venki Krishnababu. Venki is the Senior Vice President of Global Technology Services at Lululemon, the athletic apparel company based in Vancouver, BC. Venki is a transformational, business savvy, tech leader with extensive global technology experience. He's been at Lululemon for three years and was previously the CTO of Premera Blue Cross, where his leadership was pivotal to their digital transformation. Before that he was at Nordstrom for 17 years, where he led the company's service-based architecture strategy. And also for those who don't know, it's been over a year, Venki lives in my neighborhood, and yet we are doing things remotely still. We haven't had a chance to meet in person. So I hope soon we can actually meet in person.

Venki Krishnababu: (03:47)

Yeah, likewise, Bret, I'm definitely looking forward to meet you as well. It's such a great neighborhood and thank you for having me in your, uh, first podcast. I never see that as a risk at all because, uh, I know you Bret, so, uh, glad to be here and join and learn and share.

Bret Arsenault: (04:04)

No, I appreciate it. I think today would be great is to discuss some of the biggest lessons learned from the pandemic in terms of having to send employees home overnight, to remote working, not being employed. And it's just an amazing time, I think a lot of people talk about it, but understanding what it means for you at Lululemon as the senior leader you are, and then to how other people can learn from that. I think, you know, for me personally, someone recently said, yeah, I'm working from my home office, which I believe you may be doing today, and I realized I was blessed enough, one, to have a home and, two, that if I have an office that means I have a job and I know that's not true for everybody during these times. So I'm not confused by how fortunate we are, but I would think it'd be a great session for us to have a conversation on how we're making these things work for our respective companies.

Venki Krishnababu: (04:46)

Yeah, absolutely. And I share the same sentiment, Bret, very grateful to have a home and to have an office and to have a family under one roof and, uh, very, very blessed to be here and be part of this podcast.

Bret Arsenault: (04:58)

That'd be great. Before we get into the topic though, maybe you could give me a little bit about how you got into the tech industry and a little bit about your career path, because I think it's a pretty interesting background.

Venki Krishnababu: (05:08)

Yeah. Sure, Bret. It's been, I'm coming at the cusp of around 27 plus years, um, in technology. Predominantly, it's, uh, all about enabling retail business with, um, strong engineering and technology teams. I started out as a hardcore database engineer. That's where I started and, uh, and worked in different roles in almost two decades at Nor- Nordstrom, different type of roles, architecture, engineering, leadership, production support, operations, contact center, OMNi, all kinds of, you know, experience, um, all stemmed up to one thing which I'm very passionate about, which is leading and supporting people and delivering, delivering some great values for retail business and enabling them. And that's been, uh, my entry into technology and I love of technology, I love people, working with people and, and creating some great stuff together.

Bret Arsenault: (05:55)

It's a truly diverse background on all the different roles that you've had. So I think you're exceptionally qualified for the conversation today, which was, even with 27 years of experience, um, I don't think any of us predicted the situation we have, even when I was table topping pandemic exercise, I didn't see it the way this happened out. But I think as people come back to work, it's one thing to think about sending people home, but as we start, you know, working on people coming back and how we do productivity, how do you think about companies truly embracing this hybrid work environment? And what does that look like for Lululemon in the retail industry?

Venki Krishnababu: (06:27)

Yeah. In a, such a, an interesting time as we live in, uh, Bret, as you said, no one was ready to prepare to face this global pandemic, and it hit us so fast, it came like a flash on us. And the, since pandemic, many companies have, uh, pivoted and successfully shifted and shifted their business to digital work from remote. One thing pandemic has done is demystified this work from home. And it's also kind of gave an ultimatum kind of for us, set the ultimatum for leaders like us, which is a remote work or no work.

Bret Arsenault: (07:01)


Venki Krishnababu: (07:01)

I mean, that's the kind of the ultimatum. So, uh, frankly speaking Bret, to answer your question about the hybrid, mileage, you know, varies, it depends from one company to another company. And we are in the early stages of, uh, exploring hybrid environment and we also leaning in and learning from our peers and especially technology industry, like, [inaudible 00:07:22] and Microsoft and other top technology companies are kind of in the forefront, trailblazing it, we also learning and watching the industry. To me, it's uh, we are, as I said in the early stages, I'm a strong believer of test, learn, let the data and experience drive the decisions and how this hybrid work is going to set. But we are definitely exploring a hybrid work environment.

Bret Arsenault: (07:45)

That's amazing. And you, you're obviously a unique company in that you're a tech company, you do retail, you have manufacturing. And then this, you know, with the recent acquisition of the Mirror you also have a hardware line. So as I think about it, and I'd be curious, I think this is a practitioner's forum, so what would be in your mind, the biggest lesson you learned, uh, in this past year during the pandemic? Like, you know, what would you do again and what would you do differently? If we could focus on those two areas, it'd be super helpful for probably me and our listeners.

Venki Krishnababu: (08:13)

Yeah. Oh, boy. Talk about lessons. There are many, we as, uh, leaders and humans, I truly believe I am a student forever and we are continuous learners and that's the mindset I come in every day. And this pandemic has taught us a lot of stuff. And one thing which stood out for me, besides technology, besides, you know, creating a scale of remote shift and all this stuff, one thing really, really stood out for me, which is people and how resilient and the adaption and adoption of, to this new way of working, shifting and doing that in less than three, four weeks. To be honest, I was, I'm humbled, at the same time incredibly impressed and thankful to the entire, you know, team here, rallied and within three weeks we are, in our three to four weeks, our end year corporate functions. We call it as SSC, which is Store Support Center.

Bret Arsenault: (09:05)

Mm-hmm (affirmative).

Venki Krishnababu: (09:06)

Everything we do revolves around our guest in stores, we call it as our corporate headquarters our store support centers. So what we did is we shifted our entire, more than almost 2000 plus work force, corporate functions, completely remote work. And that's just kind of the, the tip of the iceberg, right?

Bret Arsenault: (09:24)

Mm-hmm (affirmative).

Venki Krishnababu: (09:24)

So then if you take the next step, you know, as we go through the pandemic, pandemic, like March, April, pretty much the entire economy, our entire market, everything was shut down, I mean, we have to close our stores. So then what happened? Business shifted. So we started to go full on digital. And as a result, if you look at our contact center, we call it as the guest education center, GEC. We used to have almost 400 folks concentrated in one full building to serve our guests. This is the, the guest first in our contact line, right? If anything, wrong with the order or if they need any help or even for something they want to buy, apply many functions and services, GEC, uh, performs. We shifted them to work from remote, the entire GEC workforce, and that happened in less than four to five weeks. And this all things, like you said, right, we are not prepared. There's no step-by-step playbook, if a global pandemic hits, exactly these are the things you had to do.

Venki Krishnababu: (10:26)

What we did is, uh, having a, a resilient team and then all leaders and the team putting their heads together, had one goal in mind, how do we enable our people? How do we serve our guests in the best possible way? And business continuity. If we keeping these three a priority, we made several decisions and we implemented several technologies and we enable this, uh, remote workforce. So that's what I would say the biggest learning for me is the resiliency and when committed people put their heads together and how they evolve out of a crisis, it is mesmerizing for me to watch and share very, very fortunate to be part of that journey. That's the first thing I would say in, like, a macro level for me, learning is about how did we adapt and adopt? And then the secondary set of learnings, right. There are technologies, there are platforms and the demystifying of working from home. You know, we, we enable many collaboration tools that also includes our teams who full, went on full on teams, enterprise level, and on top of that security. You know, once we go remote, we are no-

Bret Arsenault: (11:33)


Venki Krishnababu: (11:33)

... longer protected by the, you're, you're, you're kind of very core to that, and, um, uh, you're an expert in that area. Like the, you know, we no longer protected by the perimeter of our SSE and all the security is out the window. Now we need to pivot and how did we pivot, you know, ensuring that we have a large scale cloud centric, scalable VPN platforms, [inaudible 00:11:52] and another of how did we enable our GSE workforce? So many companies have gone through several ways to e- enable their workforce and keep the business running and humming. One thing I can tell about the second part of the question you asked about is, like, we are definitely much better prepared. My biggest wish is, we don't want to go through this again.

Bret Arsenault: (12:14)


Venki Krishnababu: (12:14)

You know, as the pandemic subside, we got a lot of community learnings as well, also social behavior learning, hopefully we learn and apply them so we don't have to go through that again. But in that case for, for better reason, if we go there, I would say resiliency planning, in my books, is a never ending process. It's always have to happen in continuum. So what we have learned, create a playbook, whatever you have, we have, we rely and lean on that and improvise further is what I would say I would do differently. Learn, apply, improvise, iterate, and make it even better.

Bret Arsenault: (12:49)

No, that's great. I think to your point around people being resilient, we've also got resilient systems, but I think we've learned a lot about people resiliency and in particular, the impact on managers. For a minute on the tech side, I'm curious though, you did some pretty interesting things with RFID at Lululemon through COVID, I think, that really helped. Can you explain a little bit about that?

Venki Krishnababu: (13:07)

Yeah. So what we have done is, we have, uh, rolled out our RFID platform, which is truly helpful in store operations, not only for store operations, all our OMNi fulfillment functions. So during pandemic, what we did is, we were able to provide, continue to provide, of course, with safety first and precaution, all the social distancing precaution, and we followed all the regul-, uh, regulations and rules, what we did is we used those platforms to unlock, uh, many new capabilities to start with, uh, store fulfillment and on, uh, shipped from stores, be able to pivot and ship digital orders and fulfill e-com orders, uh, from stores as an example. And then as the pandemic, in a start to somewhat subside, we start to slowly open the stores based on the capacity on the guidelines of the local government there, right? So we unlocked many new capabilities in preparation to provide that great service to our educators in a socially distances manner at the same time in safe manner.

Venki Krishnababu: (14:12)

Some of the technology, like, curbside pickups and then virtual wait-list, which is, um, and on digital appointments, contactless payments, and the list goes on and on it's because of the, some strong foundational platforms we put in place and which allowed us to create new many technical capabilities to help our educators. We call our sales associates as educators. So educator in store, empowering them with some powerful technology that enabled them to serve our guests, in-store guests in a much secured, socially distanced manner without compromising the service. So those are some technology unlocks we have done and we, the, the foundation which we put, allowed us to do OMNi fulfillment, the buy online pickup in store, buy online and pickup at door is another one which we enabled and gift tubs. Uh, during holiday seasons, we created less dense packed gift tubs, which is focused only on gifts. So it was, it was, uh, quite a journey. And we did all that in, like, three, four months, like, flash speed, I would say.

Bret Arsenault: (15:12)

So here's my question then. Do you think that you used to go too slow?

Venki Krishnababu: (15:15)

Oh, wow. The thing is speed and-

Bret Arsenault: (15:18)

That was, that was k-, that was kind of mean, but, I mean, it's, I mean, I look at, I look at all this digital transformation, I even look at us and I'm like, well, why didn't I push on some of those harder, sooner?

Venki Krishnababu: (15:27)

No, what happened is it's everyone rallying towards the same thing, right? And all of a sudden you get this momentum and the flywheel effect. But you're right, the entire world digital acceleration, which is supposed to be five to 10 years, it happened within one year because pandemic forced us.

Bret Arsenault: (15:43)

Yeah. No. And I think in fairness, like, it's sort of a teaser question which was, some of the things that you did wouldn't have worked had it not been for the pandemic, like, people in the in-store experience and everything else. And one of the things I was curious about in that scenario, if we could is, that, so you have the, the things you did when you, as it happened and as you were into the middle of the pandemic, now we have, as you said, more places coming online in different capacities. In this hybrid workforce, what's Lululemon thinking about the models going forward. Is it, you know, nobody's coming back or certain rules are coming back or it's 50/50, or what, what's, what's your, what's your principled view on that?

Venki Krishnababu: (16:19)

The principal view on this is as, as I mentioned earlier, Bret, we are in the early stages. We are definitely, you know, exploring our, um, hybrid work environment, our SSCs are still there, uh, which is our corporate headquarters or the tech hubs or the hubs. We are a global company. We have SSC's across the globe. So what we are doing is it's, uh, definitely we're going in with the mindset of explore this hybrid environment and understand how this works for us and then are just as needed as we go, right? And this is where, what I truly believe on and let, let that data and let the experience dictates how we evolve. The percentage of 50 here, 50 there is somewhat secondary.

Bret Arsenault: (17:05)

Mm-hmm (affirmative).

Venki Krishnababu: (17:05)

What primary is, there's no one size fits all approach for this. Some companies might go a hundred percent, some companies might say, hey, you gotta be 80% here and 20% there. So for us, we have not decided on percentage, rather we have more of a test and learn, explore, understand. And also we also keenly leaning on other industries too. And this is where, Bret, I would love to hear from you also, turn the question back to you, like how you're seeing it and hear from you as well.

Bret Arsenault: (17:34)

Hey now, you don't get to do that to the host.

Venki Krishnababu: (17:36)


Bret Arsenault: (17:36)

I think adapt and adopt and adopt and adapt, you know, model. That's a virtuous cycle that you have to think about and I think that's a smart way to think about it. I think for me, I mean, there's always a balanced view and so the question is there's companies, and some industries are more prone and capable to be able to do this, but, you know, where you're a full-on prem department and does the pendulum swing all the way to the right or as you, you know, it's, how far do you swing that pendulum? And I think much like you, our, our view is, we certainly have seen that people have the capability to be productive remotely in many of the roles, and we will continue to embrace and support that, but we'll also use the data to make sure, like, I look at the daily data on our productivity, on our collaboration capabilities, on the wellness of our employees and if we start seeing it get out of whack, or frankly, if we see competitive pressures-

Venki Krishnababu: (18:22)


Bret Arsenault: (18:22)

... we'll react to those as well. But for sure, the two things I would say we've been seeing is, we've seen a new model that can work and be very effective, both for our employees and our vendors. And we'll continue to adopt more of that. And then we will continue to use, like you said, the data to let us know whether it's still working or if we've gone too far.

Venki Krishnababu: (18:42)


Bret Arsenault: (18:42)

And I think that's going to be super interesting, but it's, I think the biggest issue, and I'd be curious to hear your view on this is, is how to help managers be effective in that model. Like the IC, the individual contributors, I kind, that's not so hard to go do, but we've, the data's shown us, that managers really bear the brunt of timezone changes of their work force or, you know, trying to be more available and they, they take a lot more of the hit. So how do we make sure that they don't have biases in that space or that we arm them to be super effective? And I know we've talked a little bit about that in the past. How are you guys, how are you thinking about that with, uh, you know, enabling your managers to be effective managers in this scenario?

Venki Krishnababu: (19:18)

Uh, yeah, I think, uh, it is important to ensure that we are providing the necessary support and the guidance for our, our leaders, right? I would start with first, ensure there's proper logistics and infrastructure, which includes, um, security is implicit, right-

Bret Arsenault: (19:33)


Venki Krishnababu: (19:34)

... part of that.

Bret Arsenault: (19:34)


Venki Krishnababu: (19:34)

So make sure that's there and be clear about what the policy, the why behind it and be crystal clear about it. If you leave gray area it's a slippery slope so you gotta be clear about that. And then followed by do not lose sight of culture. The, the culture is also important for any, any company. And it's very important and continuous feedback gathering and creating active, explicit listening sessions, understanding what's going on in the ground and that deep listening is important. And then corrections followed by the continuous feedback loop, uh, is, uh, in a, in a technical term, we call it a CICD loop, right?

Bret Arsenault: (20:07)

Yeah, right.

Venki Krishnababu: (20:07)

So the same way, same way we need to have that continuous, agile feedback loop, uh, to make micro corrections as opposed to waiting for something big to happen and making a macro corrections, which would be painful. And again, the second part would be leadership, leading people, leading teams, supporting them even in a pre-pandemic time in a global multinational workforce like us is never an easy task, right? We are highly distributed. We are global, multinational company. I have teams in, uh, in, in global in our different locations. So some level of careful and thoughtfulness is required even before this pandemic started. Now with this pandemic in mind, we need to make sure inclusivity, equity and equal-, all this stuff is part of, you know, being explicit about it, this area is important. And the last but not least, I would say definitely empathy, creating that empathy and leading with empathy and extra empathy at this time for our people is ex- extremely important as we navigate through this pandemic.

Bret Arsenault: (21:08)

Thank you. Let me come back to a comment you made about getting data and being empathetic. I think, you know, we refer to as digital empathy and I think-

Venki Krishnababu: (21:14)


Bret Arsenault: (21:14)

... these times have shown us that's super important. I'm not looking for an advertisement for Microsoft or any other company, but I am curious, like, what are some of the tools you're going to use to actually help people be productive in a hybrid workforce? And what are some of the tools you're going to use to really be able to, you know, collect that data that people could learn from on the, on the call?

Venki Krishnababu: (21:32)

So another good question, uh, Bret. There are some tools, and I personally also use it for my personal effectiveness, we use this, uh, all 365 Suite quite a bit, uh, the My Analytics part-

Bret Arsenault: (21:43)

Oh, right.

Venki Krishnababu: (21:43)

... which clearly tells me, okay, how much time I'm spending on meetings, how much think time I have and who are my top collaborators, all those things are really intriguing to me and I sometimes s-, I go into this deep introspection, why did I do that in our last week for that long, right? So allows me to understand, okay, how do I balance my time? And, and a lot of other folks within the company also use it. And I also use screen time for my mobile devices. And, um, you know, that's another way to look at it. I'm a big believer in data, but there's only one area. I don't measure things with data, Bret, this is going to be somewhat related and at the same time, why I believe technology, data analytics going to help us provide insights and become efficient continuously. There's no question about that belief.

Venki Krishnababu: (22:30)

But what I believe mo-, beyond that is, in, um, we as leaders having the right team, right people, empowering them, creating the friction-free platform for them to collaborate, when we do all those things and keep an eye on those things, productivity becomes an a, an automatic outcome of that. And so that's where I pay close attention to the, the, the stress levels of the team. I, I, when I'm in the meeting, I explicitly ask for, let's have the video let's have, especially one-on-one, we need to able to read the body language, understand how our people are responding. There's so many things you can pick up as human, which machines still not learned it yet.

Bret Arsenault: (23:06)


Venki Krishnababu: (23:07)

So it's a combination and balance between leadership that human empathy and connection followed by take advantage of this rich data and analytics and tools, which allows you to create more effectiveness and also make course corrections and adjustments.

Bret Arsenault: (23:23)

Yeah. And I think it's a, it's a great comment even where data's shown us that, like, I look at, you were mentioning workplace analytics, and I look at two-party calls and how much they've gone up, which is really, it's a replacement for the hallway conversation, that really subtle little thing like, hey, how did you do this? But now it requires a call. So you see those things go up. And I think, you know, having the ability to still do those is important. And then for me, sadly, I get the, hey, you sent this thing in off-hours. I'm like, no, I didn't. I was in a different timezone, but I haven't, I haven't been able to trick the system into that part yet.

Venki Krishnababu: (23:54)

Well, the technology, Bret, um, really helped me. This is my personal story I'm sharing. I'm a, I'm a runner. I love to run. And, and, and what happened during this peak of this pandemic, I lost sight of that and meetings after meeting, back-to-back, back-to-back, back-to-back. And then I kind of look at it and then use this, uh, work on analytics data, like, there's no breaks and I'm going, like, crazy. This is not sustainable. So what I did is took the data, worked with my personal assistant and ensured that incorporates, stitch deliberate breaks, that lunchtime is sacred time, unless really, really some major emergency that block is for me and I'm going to go run. That really helped me to get that mental balance. So same, I encourage my team also to ensure that you have deliberate breaks, look at, watch for data, watch for how the pattern changes. So definitely the technology does help and, uh, we also have to explicitly watch for it too.

Bret Arsenault: (24:48)

Yeah. I think that's a great example on the taking the lunch break. I think that's super important. One of the things that I think about in this scenario is just from a, just to knowing new perspective, if I could, I have this sort of standard set of questions that I ask everybody. So do you mind if I run you through a couple of them?

Venki Krishnababu: (25:05)

Yeah. Sure.

Bret Arsenault: (25:06)

All right. What's a book you're currently reading and what's the book you would recommend that people read?

Venki Krishnababu: (25:12)

Oh, wow. The book is about brave leadership by Brené Brown. Uh, it's really, really a good book on leadership. I really dig a lot of, you believe I, the, the number of years your book was this technology book for me, it's like 60/40.

Bret Arsenault: (25:25)

Yep. Yep.

Venki Krishnababu: (25:25)

So, um, and then, um, I'm also on the technology side, it's more of, Bret, you might notice this, uh, this, this third party supply chain software, right. That, I'm reading more on the industry, how that's, it's fast evolving industry and fascinating at the same time, so I'm reading about that. I definitely do recommend the Brené Brown's book of, if you are a really a, a big fan of, uh, leadership and wanting to get, incorporate some big, there's some good leadership lessons also incorporated which we all can learn and apply. And it's very practical.

Bret Arsenault: (25:56)

No, that's great. And I love practical leadership books, right? I think that's, uh, that's probably one of the most important ones for me. That's super helpful. Thank you. I'd just like to think from a priority, you mentioned supply chain, it's obviously a growing risk area in terms of impact, amplitude frequency and time to exploitation. So what I'm wondering from you, you don't have to be on supply chain, but just the three things that people or practitioners on this phone should think about in order to make sure that they can secure their hybrid workforce. And then the one thing they should avoid. So three things they should do. And one thing they should avoid from the perspective of, you as the Senior Vice President of Technology at Lululemon?

Venki Krishnababu: (26:35)

Three things I would say is, I always look in terms of, uh, three compartments of anything I do. One is, starts with people. With people, making sure that around us and education and how they're adapting, I'm taking it, in fact, your question a little bit more into macro level, uh, Bret, about with this hybrid workforce, what are the three things we as leaders need to, you know, watch for and do, right? So working with our people, understanding how they are working with their teams, especially for leaders who are leading other leaders, it's extremely important to get that pulse and then training around us, listening, all those things got to be incorporated from a people's standpoint. And, uh, how do you ensure that that digital fatigue is not getting the best of you? And that's going to be the, the million dollar question every day, every leader, when they wake up, need to answer, and what am I going to do today, to reduce that digital fatigue? So that's on, on people.

Venki Krishnababu: (27:31)

Then on process, right? So if you look at process, there're many process, uh, got naturally evolved and some of them pandemic driven. So we have, uh, launched the safe buildings, you know, when you come in operational capacity matters, where you sit matters, the social etiquette, um, or social distancing matters. And some of them are technology driven, some of them are process driven. So process driven's are, you have to ensure that you're declaring when you're coming in and, uh, setting some setting standards and workforce policies. And that's the, the process aspect of it.

Venki Krishnababu: (28:01)

And how do you gain access is another example you have to go through, especially in being a remote, the computer you're using, the device you using, the [inaudible 00:28:09] kind of exploding in one end, how do you ensure that when you onboard certain things or it's super clear, it's super secured, right? Very well secured. Those are the things from a process standpoint. From a technology standpoint, um, this is, uh, what, what I would say is every day we had to look at what platforms we'd use, what are the things we need to bring in? I gave examples, uh, last time, Bret, that enablement of GEC workforce with Azure VDI is a big unlock.

Bret Arsenault: (28:37)


Venki Krishnababu: (28:37)

There is this balance between empowering and also securing, protecting our employees and, and our workforce. And there are tools which allows you to solve those, right? And then you working on this technology, evolving technology, you know, and, and also meeting with industry experts and learning from them, then incorporating them. So technology is the one fast moving part of this three components. So how do you keep pace with that? So keeping pace with it.

Venki Krishnababu: (29:02)

One thing I would avoid is, this is an ultra marathon. Take pit stops and ensure that you're taking care of yourself too. Don't get, you know fatigue. As I said, don't let fatigue gets the best off you, because once, you, if your health is not good, if you're done, so you can't think, you can't make the right decisions, it's so important, uh, for, for everyone is, and especially for leaders too. Find the way to distress yourself, and, um, either it's running, running for me, yoga for someone, who knows, you know, it depends on each one. So that's what I would avoid, avoid that fatigueness and watch for that stress signals carefully.

Bret Arsenault: (29:40)

Yeah. I totally agree and understand, uh, the different points you're bringing up, but I liked the people, the process, and then the technology piece. And I think this avoidance thing, I think, people have become far more mindful I hope it sustains post uh, any pandemic situations, 'cause I think, uh, like I said, the only thing, you know, you can take into retirement or anything else you ever do is your health. So I think that's a really good way to think about it. Is there anything else you want to add, Venki, that just freeform that you'd like to add or things you'd wanted to portray as a message.

Venki Krishnababu: (30:08)

Yeah. I mean, this is more of an opportunity for, uh, me to share. We here at Lululemon uh, we are, I would say is in a, in a great, uh, spot of innovating. We are a vertical product brand and we are, um, OMNi-channel and, uh, multinational, global company and technology is kind of in the s-, core and center of enabling, and we are doing some innovative work and, uh, innovative work in terms of, uh, new technologies, new platforms, either it's RFID or it's blockchain or it's data mesh, uh, in, um, Azure data analytics, Azure data breaks or, I mean, we have doing some, several technologies and building some great stuff and, and doing some wonderful work in, uh, in the cloud. So we are hiring. So would love for folks to, you know, look at us more of an innovative technology as, company as well in addition to being a vertical brand.

Bret Arsenault: (31:02)

That's a great way to close it out, because I think it's, uh, one of the things is for people to get to know their company and I think people could think of you as a retailer or an apparel company when the reality is you're so much more in the terms of you're digitally, uh, transformed, you're doing even hardware work and the way you think of the creative value of how you pull together data, customer experience and all the other work, it's, it's a testament to a great, a great business and how every company today is both, uh, technology company and more.

Venki Krishnababu: (31:28)

Yeah. Thank you, Bret.

Bret Arsenault: (31:30)

Thanks so much.

Natalia Godyla: (31:35)

Well, we had a great time unlocking insights into security from research to artificial intelligence. Keep an eye out for our next episode.

Nic Fillingham: (31:42)

And don't forget to tweet us @msftsecurity or email us at with topics you'd like to hear on a future episode. Until then, stay safe.

Natalia Godyla: (31:53)

Stay secure.

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And then the third is about always, sort of, assuming that you've been breached and, sort of, maintaining thing philosophy of, of let's just assume that we're breached right now and let's engage in practices that would, sort of, help root out a, uh, potential breach.Nic Fillingham:Anyway, so, Arjmand, sort of, walks us through what it IoT, how does it relate to IT, how does it relate to operational technology, and obviously, what that zero trust approach looks like. On with the pod.Natalia Godyla:On with the pod. (music) Today, we're joined by Arjmand Samuel, principle program manager for the Microsoft Azure Internet of Things Group. Welcome to the show, Arjmand.Arjmand Samuel:Thank you very much, Natalia, and it's a pleasure to be on the show.Natalia Godyla:We're really excited to have you. Why don't we kick it off with talking a little bit about what you do at Microsoft. So, what does your day to day look like as a principle program manager?Arjmand Samuel:So, I am part of the Azure IoT Engineering Team. I'm a program manager on the team. I work on security for IoT and, uh, me and my team, uh, we are responsible for making sure that, uh, IoT services and clients like the software and run times and so on are, are built securely. And when they're deployed, they have the security properties that we need them and our customers demand that. So, so, that's what I do all a long.Nic Fillingham:And, uh, we're going to talk about, uh, zero trust and the relationship between a zero trust approach and IoT. Um, but before we jump into that, Arjmand, uh, we, we had a bit of a look of your, your bio here. I've got a couple of questions I'd love to ask, if that's okay. I want to know about your, sort of, tenure here at Microsoft. Y- y- you've been here for 13 years. Sounds like you started in, in 2008 and you started in the w- what was called the Windows Live Team at the time, as the security lead. I wonder if you could talk a little bit about your, your entry in to Microsoft and being in security in Microsoft for, for that amount of time. You must have seen some, sort of, pretty amazing changes, both from an industry perspective and then also inside Microsoft.Arjmand Samuel:Yeah, yeah, definitely. So, uh, as you said, uh, 2008 was the time, was the year when I came in. I came in with a, a, a degree in, uh, security, in- information security. And then, of course, my thinking and my whole work there when I was hired at Microsoft was to be, hey, how do we actually make sure that our product, which was Windows Live at that time, is secure? It has all the right security properties that, that we need that product to have. 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(laughs) That's a great, great question, and I think in the industry itself, e- evolution has been about how all around us. We are now engulfed in technology, connected technology. We call it IoT, and it's all around us. That was not the landscape 10, 15 years back. And, uh, what really is amazing is how our customers and partners are taking on this and applying this in their businesses, right? This meaning the whole industry of IoT and, uh, Internet of Things, and taking that to a level where every data, every piece of data in the physical world can be captured or can be acted upon. That is a big change from the last, uh, 10, 15 to where we are today.Nic Fillingham:I thought you were going to say TikTok dance challenges.Arjmand Samuel:(laughs)Natalia Godyla:(laughs)Nic Fillingham:... because that's, that's where I would have gone.Arjmand Samuel:(laughs) that, too. That, too, right? (laughs)Nic Fillingham:That's a (laughs) digression there. So, I'm pretty sure everyone knows what IoT is. I think we've already said it, but let's just, sort of, start there. So, IoT, Internet of Things. Is, I mean, that's correct, right? Is there, is there multiple definitions of IoT, or is it just Internet of Things? And then, what does the definition of an Internet of Things mean?Arjmand Samuel:Yeah, yeah. It;s a... You know, while Internet of Things is a very recognized acronym these days, but I think talking to different people, different people would have a different idea about how Internet of Thing could be defined. And the way I would define it, and again, not, not, uh, necessarily the authority or the, the only definition. There are many definitions, but it's about having these devices around us. Us is not just people but also our, our manufacturing processes, our cars, our, uh, healthcare systems, having all these devices around, uh, these environments. They are, these devices, uh, could be big, could be small. Could be as small as a very small temperature sensor collecting data from an environment or it could be a Roboticom trying to move a full car up and down an assembly line.Arjmand Samuel:And first of all, collecting data from these devices, then bringing them, uh, uh, using the data to do something interesting and insightful, but also beyond that, being able to control these devices based on those insights. So, now there's a feedback loop where you're collecting data and you are acting on that, that data as well. And that is where, how IoT is manifesting itself today in, in, in the world. And especially for our customers who are, who tend to be more industrial enterprises and so on, it's a big change that is happening. It's, it's a huge change that, uh, they see and we call it the transformation, the business transformation happening today. And part of that business transformation is being led or is being driven through the technology which we call IoT, but it's really a business transformation.Arjmand Samuel:It's really with our customers are finding that in order to remain competitive and in order to remain in business really, at the end of the day, they need to invest. They need to bring in all these technologies to bear, and Internet of Things happens that technology.Nic Fillingham:So, Arjmand, a couple other acronyms. You know, I think, I think most of our audience are pretty familiar with IoT, but we'll just sort of cover it very quickly. So, IoT versus IT. IT is, obviously, you know, information technology, or I think that's the, that's the (laughs) globally accepted-Arjmand Samuel:Yeah, yeah.Nic Fillingham:... definition. You know, do you we think of IoT as subset of IT? What is the relationship of, of those two? I mean, clearly, there are three letters versus two letters, (laughs) but there is relationship there. Wh- wh- what are your thoughts?Arjmand Samuel:Yeah. There's a relationship as well as there's a difference, and, and it's important to bring those two out. Information technology is IT, as we know it now for many years, is all about enterprises running their applications, uh, business applications mostly. For that, they need the network support. They need databases. They need applications to be secured and so on. So, all these have to work together. The function of IT, information technology, is to make sure that the, there is availability of all these resources, applications, networks and databases as well as you have them secured and private and so on.Arjmand Samuel:So, all of that is good, but IoT takes it to the next level where now it's not only the enterprise applications, but it's also these devices, which are now deployed by the enterprise. I mentioned Roboticoms. Measured in a conference room you have all these equipment in there, projection and temperature sensors and occupancy sensors and so on. So, all of those beco- are now the, the add on to what we used to call IT and we are calling it the IoT.Arjmand Samuel:Now, the interesting part here is in the industrial IoT space. Th- this is also called OT, operation technology. So, you know, within an organization there'll be IT and OT. OT's operation technology and these are the people or the, uh, function within an organization who deal with the, with the physical machines, the physical plant. You know, the manufacturing line, the conveyor belts, the Roboticoms, and these are called OT functions.Arjmand Samuel:The interesting part here is the goal of IT is different from the goal of OT. OT is all about availability. OT's all about safety, safety so that it doesn't hurt anybody working on the manufacturing line. OT's all about environmental concerns. So, it should not leak bad chemicals and so on. A while, if you talk about security, and this is, like, a few years back when we would talk about security with an OT person, the, the person who's actually... You know, these are people who actually wear those, uh, hard hats, you know, on, uh, a manufacturing plant. And if you talk about security to an OT person, they will typically refer to that guard standing outside and, and, uh, the-Nic Fillingham:Physical security.Arjmand Samuel:The physical security and the, the walls and the cameras, which would make sure that, you know, and then a key card, and that's about all. This was OT security, but now when we started going in and saying that, okay, all these machines can be connected to, to each other and you can collect all this data and then you can actually start doing something interesting with this data. That is where the definition of security and the functions of OT evolved. And not evolving, I mean different companies are at different stages, but they're now evolving where they're thinking, okay, it's not only about the guard standing outside. It's also the fact that the Roboticom could be taken over remotely and somebody outside, around the world, around the globe could actually be controlling that Roboticom to do something bad. And that realization and the fact that now you actually have to control it in the cyber sense and not only in the physical sense is the evolution that happened between OT.Arjmand Samuel:Now, IT and OT work together as well because the same networks are shared typically. Some of the applications that use the data from these devices are common. So, IT and OT, this is the other, uh, thing that has changed and, and we are seeing that change, is starting to work and come closer. Work together more. IoT's really different, but at the same time requires a lot of stuff that IT has traditionally done.Natalia Godyla:Hmm. So, what we considered to be simple just isn't simple anymore.Arjmand Samuel:That's life, right? (laughs) Yeah.Natalia Godyla:(laughs)Arjmand Samuel:(laughs)Natalia Godyla:So, today we wanted to talk about IoT security. So, let's just start with, with framing the conversation a little bit. Why is IoT security important and what makes it more challenging, different than traditional security?Arjmand Samuel:As I just described, right, I mean, we are now infusing compute and in every environment around us. I mean, we talked a little bit about the conveyor belt. Imagine the conference rooms, the smart buildings and, and all the different technologies that are coming in. These are technologies, while they're good, they're serve a scenario. They, they make things more efficient and so on, but they're also now a point of, uh, of failure for that whole system as well as a way for malicious sectors to bring in code if possible. And to either, uh, imagine a scenario where or an attack where a malicious sector goes into the conveyor belt and knows exactly the product that is passing through. And imagine that's something either takes the data and sells it to somebody or, worse case, stops the conveyor belt. That is millions of dollars of loss very, uh, that data that the company might be incurring.Arjmand Samuel:So, now that there's infused computer all around us, we are now living in a target which in a environment which can be attacked, and which can be used for bad things much more than what it was when we were only applications, networks and databases. Easy to put a wall around. Easy to understand what's going on. They're easy to lock down. But with all these devices around us, it's becoming much and much harder to do the same.Nic Fillingham:And then what sort of, if, if we think about IoT and IoT security, one of the things that, sort of, makes it different, I- I th- think, and here I'd love you to explain this, sort of... I- I'm thinking of it as a, as a, as a spectrum of IoT devices that, I mean, they have a CPU. They have some memory. They have some storage. They're, they're running and operating system in some capacity all the way through to, I guess, m- much more, sort of, rudimentary devices but do have some connection, some network connection in order for instruction or data to, sort of, move backwards and forwards. What is it that makes this collection of stuff difficult to protect or, you know, is it difficult to protect? And if so, why? And then, how do we think about the, the, the potential vectors for attack that are different in this scenario versus, you know, protecting lap tops and servers?Arjmand Samuel:Yeah, yeah. That's a good one. So, uh, what happens is you're right. Uh, IoT devices can be big and small, all right. They could be a small MCU class device with a real-time operating system on it. Very small, very, uh, single purpose device, which is imagine collecting temperature or humidity only. Then we have these very big, what we call the edge or heavy edge devices, which are like server class devices running a Roboticom or, or even a gateway class device, which is aggregating data from many devices, right, as a, a, and then take, taking the data and acting on it.Arjmand Samuel:So, now with all this infrastructure, one of the key things that we have seen is diversity and heterogeneity of these devices. Not just in terms of size, but also in terms of who manufactured them, when they were manufactured. So, many of the temperature sensors in environments could be very old. Like, 20 years old and people are trying to use the same equipment and not have to change anything there. And which they can. Technically they could, but then those devices were never designed in for a connected environment for these, this data to actually, uh, be aggregated and sent on the network, meaning they per- perhaps did not have encryption built into it. So, we have to do something, uh, additional there.Arjmand Samuel:And so now with the diversity of devices, when they came in, the, the feature set is so diverse. Some of them were, are more recent, built with the right security principles and the right security properties, but then some of them might not be. So, this could raise a, a challenge where how do you actually secure an infrastructure where you have this whole disparity and many different types of devices, many different manufacturers, many of ages different for these devices. Security properties are different and as we all know talking about security, the attack would always come from the weakest link. So, the attacker would always find, within that infrastructure, the device which has the least security as a entry point into that infrastructure. So, we can't just say, "Oh, I'll just protect my gateway and I'm fine." We have to have some mitigation for everything on that network. Everything. Even the older ones, older devices. We call them brownfield devices because they tend to be old devices, but they're also part of the infrastructure.Arjmand Samuel:So, how do we actually think about brownfield and the, the newer ones we call greenfield devices? Brownfield and greenfield, how do we think about those given they will come from different vendors, different designs, different security properties? So, that's a key challenge today that we have. So, they want to keep those devices as well as make sure that they are secure because the current threat vectors and threat, uh, the, and attacks are, are much more sophisticated.Natalia Godyla:So, you have a complex set of devices that the security team has to manage and understand. And then you have to determine at another level which of those devices have vulnerabilities or which one is the most vulnerable, and then, uh, assume that your most vulnerable, uh, will be the ones that are exploited. It, so, is that, that typically the attack factor? It's going to be the, the weakest link, like you said? And h- how does an attacker try to breach the IoT device?Arjmand Samuel:Yeah, yeah. And, and this is where we, we started using the term zero trust IoT.Natalia Godyla:Mm-hmm (affirmative).Arjmand Samuel:So, IoT devices are deployed in an environment which can not be trusted, should not be trusted. You should assume that there is zero trust in that environment, and then all these devices, when they are in there, you will do the right things. You'll put in the right mitigations so that the devices themselves are robust. Now, another example I always give here is, and, uh, I, your question around the attack vectors and, and how attacks are happening, typically in the IT world, now that we, we have the term defined, in the IT world, you will always have, you know, physical security. You will always put servers in a room and lock it, and, and so on, right, but in an IoT environment, you have compute devices. Imagine these are powerful edge nodes doing video analytics, but they're mounted on a pole next to a camera outside on the road, right? So, which means the physical access to that device can not be controlled. It could be that edge node, again, a powerful computer device with lots of, you know, CPU and, and so on, is deployed in a mall looking at video streams and analyzing those video streams, again, deployed out there where any attacker physically can get a hold of the device and do bad things.Arjmand Samuel:So, again, the attack vectors are also different between IT and OT or IoT in the sense that the devices might not be physically contained in a, in an environment. So, that puts another layer of what do we do to protect such, uh, environments?Nic Fillingham:And then I want to just talk about the role of, sort of, if we think about traditional computing or traditional, sort of, PC based computing and PC devices, a lot of the attack vectors and a lot of the, sort of, weakest link is the user and the user account. And that's why, you know, phishing is such a massive issue that if we can socially engineer a way for the person to give us their user name and password or whatever, we, we, we can get access to a device through the user account. IoT devices and OT devices probably don't use that construct, right? They probably, their userless. Is that accurate?Arjmand Samuel:Yeah. That's very accurate. So, again, all of the attack vectors which we know from IT are still relevant because, you know, if you, there's a phishing attack and the administrator password is taken over you can still go in and destroy the infrastructure, both IT and IoT. But at the same time, these devices, these IoT devices typically do not have a user interacting with them, typically in the compute sense. You do not log into an IoT device, right? Except in sensor with an MCU, it doesn't even have a user experience, uh, a screen on it. And so, there is typically no user associated with it, and that's another challenge. So you need to still have an identity off the device, not on the device, but off the device, but that identity has to be intrinsic off the device. It has to be part of the device and it has to be stable. It has to be protected, secure, and o- on the device, but it does not typically a user identity.Arjmand Samuel:And, and that's not only true for temperature sensors. You know, the smaller MCU class devices. That's true for edge nodes as well. Typically, an edge node, and by the way, when I say the edge node, edge node is a full blown, rich operating system. CPU, tons of memory, even perhaps a GPU, but does not typically have a user screen, a keyboard and a mouse. All it has is a video stream coming in through some protocol and it's analyzing that and then making some AI decisions, decisions based on AI. And, and, but that's a powerful machine. Again, there might never ever be a user interactively signing into it, but the device has an identity of its own. It has to authenticate itself and it workload through other devices or to the Cloud. And all of that has to be done in a way where there is no user attached to it.Natalia Godyla:So, with all of this complexity, how can we think about protecting against IoT attacks. You discussed briefly that we still apply the zero trust model here. So, you know, at a high level, what are best practices for protecting IoT?Arjmand Samuel:Yeah, yeah. Exactly. Now that we, we just described the environment, we described the devices and, and the attacks, right? The bad things that can happen, how do we do that? So, the first thing we want to do, talk about is zero trust. So, do not trust the environment. Even if it is within a factory and you have a guard standing outside and you have all the, you know, the physical security, uh, do not trust it because there are still vectors which can allow malicious sectors to come into those devices. So, that's the first one, zero trust.Arjmand Samuel:Uh, do not trust anything that is on the device unless you explicitly trust it, you explicitly make sure that you can go in and you can, attest the workload, as an example. You can attest the identity of the device, as an example. And you can associate some access control polices and you have to do it explicitly and never assume that this is, because it's a, uh, environment in a factory you're good. So, you never assume that. So, again, that's a property or a principle within zero trust that we always exercise.Arjmand Samuel:Uh, the other one is you always assume breach. You always assume that bad things will happen. I- it's not if they'll happen or not. It's about when they're s- uh, going to happen. So, for the, that thinking, then you're putting in place mitigations. You are thinking, okay, if bad things are going to happen, how do I contain the bad things? How do I contain? How do I make sure that first of all, I can detect bad things happening. And we have, and we can talk about some of the offerings that we have, like Defender for IoT as an example, which you can deploy on to the environment. Even if it's brownfield, you can detect bad things happening based on the network characteristics. So, that's Defender for IoT.Arjmand Samuel:And, and once you can detect bad things happening then you can do something about it. You get an alert. You can, you can isolate that device or take that device off the network and refresh it and do those kind of things. So, the first thing that needs to happen is you assume that it's going breach. You always assume that whatever you are going to trust is explicitly trusted. You always make sure that there is a way to explicitly trust, uh, uh, uh, either the workload or the device or the network that is connected onto the device.Nic Fillingham:So, if we start with verify explicitly, in the traditional compute model where it's a user on a device, we can verify explicitly with, usually, multi factor authentication. So, I have my user name and password. I add an additional layer of authentication, whether it's an, you know, app on my phone, a key or something, some physical device, there's my second factor and I'm, I'm verified explicitly in that model. But again, no users or the user's not, sort of, interacting with the device in, sort of, that traditional sense, so what are those techniques to verify explicitly on an IoT device?Arjmand Samuel:Yeah. I, exactly. So, we, in that white paper, which we are talking about, we actually put down a few things that you can actually do to, to, en- ensure that you have all the zero trust requirements together. Now, the first one, of course, is you need, uh, all devices to have strong identity, right? So, because identity is a code. If you can not identi- identify something you can not, uh, give it an access control policy. You can not trust the data that is coming out from that, uh, device. So, the first thing you do is you have a strong identity. By a strong identity we mean identity, which is rooted in hardware, and so, what we call the hardware based root of trust. It's technologies like TPM, which ensure that you have the private key, which is secured in our hardware, in the hardware and you can not get to it, so and so on. So, you, you ensure that you have a, a strong identity.Arjmand Samuel:You always have these privilege access so you do not... And these principles have been known to our IT operations forever, right? So, many years they have been refined and, uh, people know about those, but we're applying them to the IoT world. So, these privilege access, if our device is required to access another device or data or to push out data, it should only do that for the function it is designed for, nothing more than that. You should always have some level of, uh, device health check. Perhaps you should be able to do some kind of test station of the device. Again, there is no user to access the device health, but you should be able to do, and there are ways, there are services which allow you to measure something on the device and then say yes it's good or not.Arjmand Samuel:You should be able to do a continuous update. So, in case there is a device which, uh, has been compromised, you should be able to reclaim that device and update it with a fresh image so that now you can start trusting it. And then finally you should be able to securely monitor it. And not just the device itself, but now we have to technologies which can monitor the data which is passing through the network, and based on those characteristics can see if a device is attacked or being attacked or not. So, those are the kind of things that we would recommend for a zero trust environment to take into account and, and make those requirements a must for, for IoT deployments.Natalia Godyla:And what's Microsoft's role in protecting against these attacks?Arjmand Samuel:Yeah, yeah. So, uh, a few products that we always recommend. If somebody is putting together a new IoT device right from the silicone and putting that device together, we have a great secure be design device, which is called Azure Sphere. Azure Sphere has a bunch of different things that it does, including identity, updates, cert management. All these are important functions that are required for that device to function. And so, a new device could use the design that we have for Azure Sphere.Arjmand Samuel:Then we have, a gateway software that you put on a gateway which allows you to secure the devices behind that gateway for on time deployments. We have Defender for IoT, again as I mentioned, but Defender for IoT is on-prem, so you can actually monitor all the tracks on the network and on the devices. You could also put a agent, a Micro Agent on these devices, but then it also connects to Azure Sentinel. Azure Sentinel is a enterprise class user experience for security administrators to know what bad things are happening on, on-prem. So, it, the whole end to end thing could works all the way from the network, brownfield devices to the Cloud.Arjmand Samuel:We also have things like, uh, IoT Hub Device Provisioning service. Device provisioning service is an interesting concept. I'll try to briefly describe that. So, what happens is when you have an identity on a device and you want to actually put that device, deploy that device in your environment, it has to be linked up with a service in the Cloud so that it can, it knows the device, there's an identity which is shared and so on. Now, you could do it manually. You could actually bring that device in, read a code, put it in the Cloud and your good to go because now the Cloud knows about that device, but then what do you do when you have to deploy a million devices? And we're talking about IoT scale, millions. A fleet of millions of devices. If you take that same approach of reading a key and putting it in the Cloud, one, you'd make mistakes. Second, you will probably need a lifetime to take all those keys and put them in the cloud.Arjmand Samuel:So, in order to solve that problem, we have the device provisioning service, which it's a service in the Cloud. It is, uh, linked up to the OEMs or manufacturing devices. And when you deploy our device in your field, you do not have to do any of that. Your credentials are passed between the service and the, and the device. So, so, that's another service. IoT Hub Device Provisioning Service.Arjmand Samuel:And then we have, uh, a work, the, uh, a piece of work that we have done, which is the Certification of IoT Devices. So, again, you need the devices to have certain security properties. And how do you do that? How do you ensure that they have the right security properties, like identity and cert management and update ability and so on, we have what we call the Edge Secured-core Certification as well as Azure Certified Device Program. So, any device which is in there has been tested by us and we certify that that device has the right security properties. So, we encourage our customers to actually pick from those devices so that they, they actually get the best security properties.Natalia Godyla:Wow. That's a lot, which is incredible. What's next for Microsoft's, uh, approach to IoT security?Arjmand Samuel:Yeah, yeah. So, uh, one of the key things that we have heard our customers, anybody who's going into IoT ask the question, what is the risk I'm taking? Right? So, I'm deploying all these devices in my factories and Roboticom's connecting them, and so on, but there's a risk here. And how do I quantify that risk? How do I understand th- that risk and how do I do something about that risk?Arjmand Samuel:So, we, we got those questions many years back, like four, five years back. We started working with the industry and together with the Industrial Internet Consortium, IIC, which a consortium out there and there are many companies part of that consortium, we led something called The Security Maturity Model for IoT. So, so, we put down a set of principles and a set of processes you follow to evaluate the maturity of your security in IoT, right? So, it's a actionable thing. You take the document, you evaluate, and then once you have evaluated, it actually give you a score.It says you're level one, or two, or three, or four. Four, that's the authentication. All else is controlled management. And then based on th- that level, you know where you care, first of all. So, you know what your weaknesses are and what you need to do. So, that's a very actionable thing. But beyond that, if you're at level two and you want to be at level four, and by want to means your scenario dictates that you should be at level four, it is actionable. It gives you a list of things to do to go from level two to level four. And then you can reevaluate yourself and then you know that you're at level four. So, that's a maturityArjmand Samuel:Now, In order to operationalize that program with in partnership with IAC, we also have been, and IAC's help, uh, has been instrumental here, we have been working on a training program where we have been training auditors. These are IoT security auditors, third party, independent auditors who are not trained on SMMs Security Maturity Model. And we tell our customers, if you have a concern, get yourself audited using SMM, using the auditors and that will tell you where you are and where you need to go. So, it's evolving. Security for IoT's evolving, but I think we are at the forefront of that evolution.Nic Fillingham:Just to, sort of, finish up here, I'm thinking of some of the recent IoT security stories that were in the news. We won't mention any specifically, but there, there have been some recently. My take aways hearing those stories reading those stories in the news is that, oh, wow, there's probably a lot of organizations out here and maybe individuals at companies that are using IoT and OT devices that maybe don't see themselves as being security people or having to think about IoT security, you know T security. I just wonder if do you think there is a, a population of folks out here that don't think of themselves as IoT security people, but they really are? And then therefore, how do we sort of go find those people and help them go, get educated about securing IoT devices?Arjmand Samuel:Yeah, that's, uh, that's exactly what we are trying to do here. So, uh, people who know security can obviously know the bad things that can happen and can do something about it, but the worst part is that in OT, people are not thinking about all the bad things that can happen in the cyber world. You mentioned that example with that treatment plant. It should never have been connected to the network, unless required. And if it was connected to the, uh, to the network, to the internet, you should have had a ton a mitigations in place in case somebody was trying to come in and should have been stopped. And in that particular case, y- there was a phishing attack and the administrative password was, was taken over. But even with that, with the, some of our products, like Defender for IoT, can actually detect the administrative behavior and can, can detect if an administrator is trying to do bath things. It can still tell other administrators there's bad things happening.Arjmand Samuel:So, there's a ton of things that one could do, and it all comes down, what we have realized is it all comes down to making sure that this word gets out, that people know that there is bad things that can happen with IoT and it's not only your data being stolen. It's very bad things as in that example. And so, the word out, uh, so that we can, uh, we can actually make IoT more secure.Nic Fillingham:Got it. Arjmand, again, thanks so much for your time. It sounds like we really need to get the word out. IoT security is a thing. You know, if you work in an organization that employs IoT or OT devices, or think you might, go and download this white paper. Um, we'll put the link in the, uh, in the show notes. You can just search for it also probably on the Microsoft Security Blog and learn more about cyber security for IoT, how to apply zero trust model. Share it with your, with your peers and, uh, let's get as much education as we can out there.Arjmand Samuel:Thank you very much for this, uh, opportunity.Nic Fillingham:Thanks, Arjmand, for joining us. I think we'll definitely touch on cyber security for IoT, uh, in future episodes. So, I'd love to talk to you again. (music)Arjmand Samuel:Looking forward to it. (music)Natalia Godyla:Well, we had a great time unlocking insights into security from research to artificial intelligence. Keep an eye out for our next episode.Nic Fillingham:And don't forget to Tweet us @MSFTSecurity or email us at with topics you'd like to hear on a future episode. (music) Until then, stay safe.Natalia Godyla:Stay secure. (music)

Looking a Gift Card Horse in the Mouth

Ep. 35
Is it just me, or do you also miss the goodoledays of fraudulent activity?You remember the kind I’m talking about, theemails from princes around the world asking for just a couple hundred dollars to help them unfreeze or retrieve their massive fortune which they would share with you. Attacks havegrownmore nuanced, complex, and invasive since then, but because of the unbelievable talent at Microsoft, we’re constantly getting better at defending against it.On this episode of Security Unlocked, hosts Nic Fillingham and NataliaGodylasit down with returning champion, Emily Hacker, to discuss Business Email Compromise (BEC), an attack that has perpetrators pretending to be someone from the victim’s place of work and instructs them to purchase gift cards and send them to thescammer.Maybe it’s good tolookagift cardhorse in the mouth?In This Episode You Will Learn:Why BEC is such an effective and pervasive attackWhat are the key things to look out for to protect yourself against oneWhy BEC emails are difficult to trackSome Questions We Ask:How do the attackers mimic a true-to-form email from a colleague?Why do we classify this type of email attack separately from others?Why are they asking for gift cards rather than cash?Resources:Emily Hacker’s LinkedIn:’s2020Internet Crime Report’sLinkedIn:’sLinkedIn: Security Blog: Unlocked: CISO Series with Bret Arsenaulthttps://SecurityUnlockedCISOSeries.comTranscript:[Full transcript can be found at]Nic Fillingham:Hello, and welcome to Security Unlocked, a new podcast from Microsoft, where we unlock insights from the latest in news and research from across Microsoft security engineering and operations teams. I'm Nic Fillingham.Natalia Godyla:And I'm Natalia Godyla. In each episode, we'll discuss the latest stories from Microsoft security, deep dive into the newest thread intel, research and data science.Nic Fillingham:And profile some of the fascinating people working on artificial intelligence in Microsoft security.Natalia Godyla:And now, let's unlock the pod.Nic Fillingham:Hello listeners, hello, Natalia, welcome to episode 35 of Security Unlocked. Natalia, how are you?Natalia Godyla:I'm doing well as always and welcome everyone to another show.Nic Fillingham:It's probably quite redundant, me asking you how you are and you asking me how you are, 'cause that's not really a question that you really answer honestly, is it? It's not like, "Oh, my right knee's packing at the end a bit," or "I'm very hot."Natalia Godyla:Yeah, I'm doing terrible right now, actually. I, I just, uh- Nic Fillingham:Everything is terrible.Natalia Godyla:(laughs)Nic Fillingham:Well, uh, our guest today is, is a returning champ, Emily Hacker. This is her third, uh, appearance on Security Unlocked, and, and she's returning to talk to us about a, uh, new business email compromise campaign that she and her colleagues helped unearth focusing on some sort of gift card scam.Nic Fillingham:We've covered business email compromise before or BEC on the podcast. Uh, we had, uh, Donald Keating join us, uh, back in the early days of Security Unlocked on episode six. The campaign itself, not super sophisticated as, as Emily sort of explains, but so much more sort of prevalent than I think a lot of us sort of realize. BEC was actually the number one reported source of financial loss to the FBI in 2020. Like by an order of magnitude above sort of, you know, just places second place, third place, fourth place. You know, I think the losses were in the billions, this is what was reported to the FBI, so it's a big problem. And thankfully, we've got people like, uh, Emily on it.Nic Fillingham:Natalia, can you give us the TLDR on the, on the campaign that Emily helps describe?Natalia Godyla:Yeah, as you said, it's, uh, a BEC gift card campaign. So the attackers use typosquatted domains, and socially engineered executives to request from employees that they purchase gift cards. And the request is very vague. Like, "I need you to do a task for me, "or "Let me know if you're available." And they used that authority to convince the employees to purchase the gift cards for them. And they then co-converted the gift cards into crypto at, at scale to collect their payout.Nic Fillingham:Yeah, and we actually discuss with Emily that, that between the three of us, Natalia, myself and Emily, we actually didn't have a good answer for how the, uh- Natalia Godyla:Mm-hmm (affirmative).Nic Fillingham:... these attackers are laundering these gift cards and, and converting them to crypto. So we're gonna, we're gonna go and do some research, and we're gonna hopefully follow up on a, on a future episode to better understand that process. Awesome. And so with that, on with the pod.Natalia Godyla:On with the pod.Nic Fillingham:Welcome back to the Security Unlocked podcast. Emily hacker, how are you?Emily Hacker:I'm doing well. Thank you for having me. How are you doing?Nic Fillingham:I'm doing well. I'm trying very hard not to melt here in Seattle. We're recording this at the tail end of the heat wave apocalypse of late June, 2021. Natalia, are you all in, I should have asked, have you melted or are you still in solid form?Natalia Godyla:I'm in solid form partially because I think Seattle stole our heat. I'm sitting in Los Angeles now.Nic Fillingham:Uh huh, got it. Emily, thank you for joining us again. I hope you're also beating the heat. You're here to talk about business email compromise. And you were one of the folks that co-authored a blog post from May 6th, talking about a new campaign that was discovered utilizing gift card scams. First of all, welcome back. Thanks for being a return guest. Second of all, do I get credit or do I get blame for the tweet that enabled you to, to- Emily Hacker:(laughs) It's been so long, I was hoping you would have forgotten.Nic Fillingham:(laughs) Emily and I were going backward forward on email, and I basically asked Emily, "Hey, Emily, who's like the expert at Microsoft on business email compromise?" And then Emily responded with, "I am."Emily Hacker:(laughs)Nic Fillingham:As in, Emily is. And so I, I think I apologized profusely. If I didn't, let me do that now for not assuming that you are the subject matter expert, but that then birthed a very fun tweet that you put out into the Twitter sphere. Do you wanna share that with the listeners or is this uncomfortable and we need to cut it from the audio?Emily Hacker:No, it's fine. You can share with the listeners. I, uh- Nic Fillingham:(laughs)Emily Hacker:... I truly was not upset. I don't know if you apologized or not, because I didn't think it was the thing to apologize for. Because I didn't take your question as like a, "Hey," I'm like, "Can you like get out of the way I did not take it that way at all. It was just like, I've been in this industry for five years and I have gotten so many emails from people being like, "Hey, who's the subject matter in X?" And I'm always having to be like, "Oh, it's so and so," you know, or, "Oh yeah, I've talked to them, it's so-and-so." And for once I was like, "Oh my goodness, it me."Natalia Godyla:(laughs)Emily Hacker:Like I'm finally a subject matter in something. It took a long time. So the tweet was, was me being excited that I got to be the subject matter expert, not me being upset at you for asking who it was.Nic Fillingham:No, I, I took it in it's, I did assume that it was excitement and not crankiness at me for not assuming that it would be you. But I was also excited because I saw the tweet, 'cause I follow you on Twitter and I'm like, "Oh, that was me. That was me." And I got to use- Emily Hacker:(laughs)Nic Fillingham:... I got to use the meme that's the s- the, the weird side eye puppet, the side, side eye puppet. I don't know if that translates. There's this meme where it's like a we-weird sort of like H.R. Pufnstuf sort of reject puppet, and it's sort of like looking sideways to the, to the camera.Emily Hacker:Yes.Nic Fillingham:Uh, I've, and I've- Emily Hacker:Your response literally made me laugh a while though alone in my apartment.Nic Fillingham:(laughs_ I've never been able to use that meme in like its perfect context, and I was like, "This is it."Emily Hacker:(laughs) We just set that one up for a comedy home run basically.Nic Fillingham:Yes, yes, yes. And I think my dad liked the tweet too- Natalia Godyla:(laughs)Nic Fillingham:... so I think I had that, so that was good.Emily Hacker:(laughs)Nic Fillingham:Um, he's like my only follower.Emily Hacker:Pure success.Nic Fillingham:Um, well, on that note, so yeah, we're here to talk about business email compromise, which we've covered on the, on the podcast before. You, as I said, uh, co-authored this post for May 6th. We'll have a, a broader conversation about BEC, but let's start with these post. Could you, give us a summary, what was discussed in this, uh, blog post back on, on May 6th?Emily Hacker:Yeah, so this blog post was about a specific type of business email compromise, where the attackers are using lookalike domains and lookalike email addresses to send emails that are trying, in this particular case, to get the user to send them a gift card. And so this is not the type of BEC where a lot of people might be thinking of in terms of conducting wire transfer fraud, or, you know, you read in the news like some company wired several million dollars to an attacker. That wasn't this, but this is still creating a financial impact and that the recipient is either gonna be using their own personal funds or in some cases, company funds to buy gift cards, especially if the thread actor is pretending to be a supervisor and is like, "Hey, you know, admin assistant, can you buy these gift cards for the team?" They're probably gonna use company funds at that point.Emily Hacker:So it's still something that we keep an eye out for. And it's actually, these gift card scams are far and away the most common, I would say, type of BEC that I am seeing when I look for BEC type emails. It's like, well over, I would say 70% of the BEC emails that I see are trying to do this gift card scam, 'cause it's a little easier, I would say for them to fly under the radar maybe, uh, in terms of just like, someone's less likely to report like, "Hey, why did you spend $30 on a gift card?" Than like, "Hey, where did those like six billion dollars go?" So like in that case, "This is probably a little easier for them to fly under the radar for the companies. But in terms of impact, if they send, you know, hundreds upon hundreds of these emails, the actors are still gonna be making a decent chunk of change at the end of the day.Emily Hacker:In this particular instance, the attackers had registered a couple hundred lookalike domains that aligned with real companies, but were just a couple of letters or digits off, or were using a different TLD, or use like a number or sort of a letter or something, something along the lines to where you can look at it and be like, "Oh, I can tell that the attacker is pretending to be this other real company, but they are actually creating their own."Emily Hacker:But what was interesting about this campaign that I found pretty silly honestly, was that normally when the attacker does that, one would expect them to impersonate the company that their domain is looking like, and they totally didn't in this case. So they registered all these domains that were lookalike domains, but then when they actually sent the emails, they were pretending to be different companies, and they would just change the display name of their email address to match whoever they were impersonating.Emily Hacker:So one of the examples in the blog. They're impersonating a guy named Steve, and Steve is a real executive at the company that they sent this email to. But the email address that they registered here was not Steve, and the domain was not for the company that Steve works at. So they got a little bit, I don't know if they like got their wires crossed, or if they just were using the same infrastructure that they were gonna use for a different attack, but these domains were registered the day before this attack. So it definitely doesn't seem like opportunistic, and which it doesn't seem like some actors were like, "Oh, hey look, free domains. We'll send some emails." Like they were brand new and just used for strange purposes.Natalia Godyla:Didn't they also fake data in the headers? Why would they be so careless about connecting the company to the language in the email body but go through the trouble of editing the headers?Emily Hacker:That's a good question. They did edit the headers in one instance that I was able to see, granted I didn't see every single email in this attack because I just don't have that kind of data. And what they did was they spoofed one of the headers, which is an in-reply-to a header, which makes it, which is the header that would let us know that it's a real reply. But I worked really closely with a lot of email teams and we were able to determine that it wasn't indeed a fake reply.Emily Hacker:My only guess, honestly, guess as to why that happened is one of two things. One, the domain thing was like a, a mess up, like if they had better intentions and the domain thing went awry. Or number two, it's possible that this is multiple attackers conducting. If one guy was responsible for the emails with the mess of domains, and a different person was responsible for the one that had the email header, like maybe the email header guy is just a little bit more savvy at whose job of crime than the first guy.Natalia Godyla:(laughs)Nic Fillingham:Yeah, I li- I like the idea of, uh, sort of ragtag grubbing. I don't mean to make them an attractive image, but, you know, a ragtag group of people here. And like, you've got a very competent person who knows how to go and sort of spoof domain headers, and you have a less competent person who is- Emily Hacker:Yeah. It's like Pinky and the Brain.Nic Fillingham:Yeah, it is Pinky and the Brain. That's fantastic. I love the idea of Pinky and the Brain trying to conduct a multi-national, uh- Emily Hacker:(laughs)Nic Fillingham:... BEC campaign as their way to try and take over the world. Can we back up a little bit? We jumped straight into this, which is totally, you know, we asked you to do that. So, but let's go back to a little bit of basics. BEC stands for business email compromise. It is distinct from, I mean, do you say CEC for consumer email compromise? Like what's the opposite side of that coin? And then can you explain what BEC is for us and why we sort of think about it distinctly?Emily Hacker:Mm-hmm (affirmative), so I don't know if there's a term for the non-business side of BEC other than just scam. At its basest form, what BEC is, is just a scam where the thread actors are just trying to trick people out of money or data. And so it doesn't involve any malware for the most part at the BEC stage of it. It doesn't involve any phishing for the most part at the BEC stage of it. Those things might exist earlier in the chain, if you will, for more sophisticated attacks. Like an attacker might use a phishing campaign to get access before conducting the BEC, or an attacker might use like a RAT on a machine to gain access to emails before the actual BEC. But the business email compromise email itself, for the most part is just a scam. And what it is, is when an attacker will pretend to be somebody at a company and ask for money data that can include, you know, like W-2's, in which case that was still kind of BEC.Emily Hacker:And when I say that they're pretending to be this company, there's a few different ways that that can happen. And so, the most, in my opinion, sophisticated version of this, but honestly the term sophisticated might be loaded and arguable there, is when the attacker actually uses a real account. So business email compromise, the term might imply that sometimes you're actually compromising an email. And those are the ones where I think are what people are thinking of when they're thinking of these million billion dollar losses, where the attacker gains access to an email account and basically replies as the real individual.Emily Hacker:Let's say that there was an email thread going on between accounts payable and a vendor, and the attacker has compromised the, the vendor's email account, well, in the course of the conversation, they can reply to the email and say, "Hey, we just set up a new bank account. Can you change the information and actually wire the million dollars for this particular project to this bank account instead?" And if the recipient of that email is not critical of that request, they might actually do that, and then the money is in the attacker's hands. And it's difficult to be critical of that request because it'll sometimes literally just be a reply to an ongoing email thread with someone you've probably been doing business with for a while, and nothing about that might stand out as strange, other than them changing the account. It can be possible, but difficult to get it back in those cases. But those are definitely the ones that are, I would say, the most tricky to spot.Emily Hacker:More common, I would say, what we see is the attacker is not actually compromising an email, not necessarily gaining access to it, but using some means of pretending or spoofing or impersonating an email account that they don't actually have access to. And that might include registering lookalike domains as in the case that we talked about in this blog. And that can be typosquatted domains or just lookalike domains, where, for example, I always use this example, even though I doubt this domain is available, but instead of doing, they might do Microsoft with a zero, or like Microsoft using So it looks like an M at first glance, but it's actually not. Or they might do something like or something, which that obviously would not be available, but you get the point. Where they're just getting these domains that kind of look like the right one so that somebody, at first glance, will just look up and be like, "Oh yeah, that looks like Microsoft. This is the right person."Emily Hacker:They might also, more commonly, just register emails using free email services and either do one of two things, make the email specific to the person they're targeting. So let's say that an attacker was pretending to be me. They might register, or more recently and maybe a little bit more targeted, they might register like, and then they'll send an email as me. And then on the, I would say less sophisticated into the spectrum, is when they are just creating an email address that's like And then they'll use that email address for like tons of different targets, like different victims. And they'll either just change the display name to match someone at the company that they're targeting, or they might just change it to be like executive or like CEO or something, which like the least believable of the bunch in my opinion is when they're just reusing the free emails.Emily Hacker:So that's kind of the different ways that they can impersonate or pretend to be these companies, but I see all of those being used in various ways. But for sure the most common is the free email service. And I mean, it makes sense, because if you're gonna register a domain name that cost money and it takes time and takes skill, same with compromising an email account, but it's quick and easy just to register a free email account. So, yeah.Nic Fillingham:So just to sort of summarize here. So business email compromise i-is obviously very complex. There's lots of facets to it.Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:It sounds like, first of all, it's targeted at businesses as opposed to targeted individuals. In targeted individuals is just more simple scams. We can talk about those, but business email compromise, targeted at businesses- Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:... and the end goal is probably to get some form of compromise, and which could be in different ways, but some sort of compromise of a communication channel or a communication thread with that business to ultimately get some money out of them?Emily Hacker:Yep, so it's a social engineering scheme to get whatever their end goals are, usually money. Yeah.Nic Fillingham:Got it. Like if I buy a gift card for a friend or a family for their birthday, and I give that to them, the wording on the bottom says pretty clearly, like not redeemable for cash. Like it's- Emily Hacker:So- Nic Fillingham:... so what's the loophole they're taking advantage of here?Emily Hacker:Criminals kind of crime. Apparently- Natalia Godyla:(laughs)Emily Hacker:... there are sites, you know, on the internet specifically for cashing out gift cards for cryptocurrency.Nic Fillingham:Hmm.Emily Hacker:And so they get these gift cards specifically so that they can cash them out for cryptocurrency, which then is a lot, obviously, less traceable as opposed to just cash. So that is the appeal of gift cards, easier to switch for, I guess, cryptocurrency in a much less traceable manner for the criminals in this regard. And there are probably, you know, you can sell them. Also, you can sell someone a gift card and be like, "Hey, I got a $50 iTunes gift card. Give me $50 and you got an iTunes gift card." I don't know if iTunes is even still a thing. But like that is another means of, it's just, I think a way of like, especially the cryptocurrency one, it's just a way of distancing themselves one step from the actual payout that they end up with.Nic Fillingham:Yeah, I mean, it's clearly a, a laundering tactic.Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:It's just, I'm trying to think of like, someone's eventually trying to get cash out of this gift card-Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:... and instead of going into Target with 10,000 gift cards, and spending them all, and then turning right back around and going to the returns desk and saying like, "I need to return these $10,000 that I just bought."Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:I guess I'm just puzzled as to how, at scale- Emily Hacker:Yeah.Nic Fillingham:... and I guess that's the key word here, at scale, at a criminal scale, how are they, what's the actual return? Are they getting, are they getting 50 cents on the dollar? Are they getting five cents on the dollar? Are they getting 95 cents on the dollar? Um, it sounds like, maybe I don't know how to ask that question, but I think it's a fascinating one, I'd love to learn more about.Emily Hacker:It is a good question. I would imagine that the, the sites where they exchange them for cryptocurrency are set up in a way where rather than one person ending up with all the gift cards to where that you have an issue, like what you're talking about with like, "Hey, uh, can I casually return these six million gift cards?" Like rather than that, they're, it's more distributed. But there probably is a surcharge in terms of they're not getting a one-to-one, but it's- Nic Fillingham:Yeah.Emily Hacker:... I would not imagine that it's very low. Or like I would not imagine that they're getting five cents on the dollar, I would imagine it's higher than that.Nic Fillingham:Got it.Emily Hacker:But I don't know. So, that's a good question.Natalia Godyla:And we're talking about leveraging this cryptocurrency model to cash them out. So has there been an increase in these scams because they now have this ability to cash them out for crypto? Like, was that a driver?Emily Hacker:I'm not sure. I don't know how long the crypto cash out method has been available.Natalia Godyla:Mm-hmm (affirmative).Emily Hacker:I've only recently learned about it, but that's just because I don't spend, I guess I don't spend a lot of time dealing with that end of the scam. For the most part, my job is looking at the emails themselves. So, the, learning what they're doing once they get the gift cards was relatively new to me, but I don't think it's new to the criminals. So it's hard for me to answer that question, not knowing how long the, the crypto cash out method has been available to them. But I will say that it does feel like, in the last couple of years, gift card scams have just been either increasing or coming into light more, but I think increasing.Nic Fillingham:Emily, what's new about this particular campaign that you discussed in the blog? I-it doesn't look like there's something very new in the approach here. This feels like it's a very minor tweak on techniques that have been employed for a while. Tell me what's, what's new about this campaign? (laughs)Emily Hacker:(laughs) Um, so I would agree that this is not a revolutionary campaign.Nic Fillingham:Okay.Emily Hacker:And I didn't, you know, choose to write this one into the blog necessarily because it's revolutionary, but rather because this is so pervasive that I felt like it was important for Microsoft customers to be aware that this type of scam is so, I don't know what word, now we're both struggling with words, I wanna say prolific, but suddenly the definition of that word seems like it doesn't fit in that sentence.Nic Fillingham:No, yeah, prolific, that makes sense. Emily Hacker:Okay.Nic Fillingham:Like, this is, it sounds like what you're saying is, this blog exists not because this campaign is very unique and some sort of cutting-edge new technique, it exists because it's incredibly pervasive.Emily Hacker:Yes.Nic Fillingham:And lots and lots of people and lots and lots of businesses are probably going to get targeted by it. Emily Hacker:Exactly.Nic Fillingham:And we wanna make sure everyone knows about it.Emily Hacker:And the difference, yes, and the, the only real thing that I would say set this one apart from some of the other ones, was the use of the lookalike domains. Like so many of the gift cards scams that I see, so many of the gift cards scams that I see are free email accounts, Gmail, AOL, Hotmail, but this one was using the lookalike domains. And that kind of gave us a little bit more to talk about because we could look into when the domains were registered. I saw that they were registered the day, I think one to two days before the attack commenced. And that also gave us a little bit more to talk about in terms of BEC in the blog, because this kind of combined a couple of different methods of BEC, right? It has the gift cards scam, which we see just all the time, but it also had that kind of lookalike domain, which could help us talk about that angle of BEC.Emily Hacker:But I had been, Microsoft is, is definitely starting to focus in on BEC, I don't know, starting to focus in, but increasing our focus on BEC. And so, I think that a lot of the stuff that happens in BEC isn't new. Because it's so successful, there's really not much in the way of reason for the attackers to shift so dramatically their tactics. I mean, even with the more sophisticated attacks, such as the ones where they are compromising an account, those are still just like basic phishing emails, logging into an account, setting up forwarding rules, like this is the stuff that we've been talking about in BEC for a long time. But I think Microsoft is talking about these more now because we are trying to get the word out, you know, about this being such a big problem and wanting to shift the focus more to BEC so that more people are talking about it and solving it. Natalia Godyla:It seemed like there was A/B testing happening with the cybercriminals. They had occasionally a soft intro where someone would email and ask like, "Are you available?" And then when the target responded, they then tried to get money from that individual, or they just immediately asked for money.Emily Hacker:Mm-hmm (affirmative).Natalia Godyla:Why the different tactics? Were they actually attempting to be strategic to test which version worked, or was it just, like you said, different actors using different methods?Emily Hacker:I would guess it's different actors using different methods or another thing that it could be was that they don't want the emails to say the same thing every time, because then it would be really easy for someone like me to just identify them- Natalia Godyla:Mm-hmm (affirmative).Emily Hacker:... in terms of looking at mail flow for those specific keywords or whatever. If they switch them up a little bit, it makes it harder for me to find all the emails, right? Or anybody. So I think that could be part of the case in terms of just sending the exact same email every time is gonna make it really easy for me to be like, "Okay, well here's all the emails." But I think there could also be something strategic to it as well. I just saw one just yesterday actually, or what day is it, Tuesday? Yeah, so it must've been yesterday where the attacker did a real reply.Emily Hacker:So they sent the, the soft opening, as you said, where it just says, "Are you available?" And then they had sent a second one that asked that full question in terms of like, "I'm really busy, I need you to help me, can you call me or email me," or something, not call obviously, because they didn't provide a phone number. Sometimes they do, but in this case, they didn't. And they had actually responded to their own email. So the attacker replied to their own email to kind of get that second push to the victim. The victim just reported the email to Microsoft so they didn't fall for it. Good for them. But it does seem that there might be some strategy involved or desperation. I'm not sure which one.Natalia Godyla:(laughs) Fine line between the two.Emily Hacker:(laughs)Nic Fillingham:I'd want to ask question that I don't know if you can answer, because I don't wanna ask you to essentially, you know, jeopardize any operational security or sort of tradecraft here, but can you give us a little tidbit of a glimpse of your, your job, and, and how you sort of do this day-to-day? Are you going and registering new email accounts and, and intentionally putting them in dodgy places in hopes of being the recipient? Or are you just responding to emails that have been reported as phishing from customers? Are you doing other things like, again, I don't wanna jeopardize any of your operational security or, you know, the processes that you use, but how do you find these?Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:And how do you then sort of go and follow the threads and uncover these campaigns?Emily Hacker:Yeah, there's a few ways, I guess that we look for these. We don't currently have any kind of like Honey accounts set up or anything like that, where we would be hoping to be targeted and find them this way. I know there are different entities within Microsoft who are, who do different things, right? So my team is not the entity that would be doing that. So my team's job is more looking at what already exists. So we're looking at stuff that customers have reported, and we're also looking at open source intelligence if anyone else has tweeted or released a blog or something about an ongoing BEC campaign, that might be something that then I can go look at our data and see if we've gotten.Emily Hacker:But the biggest way outside of those, those are the two, like I would say smaller ways. The biggest way that we find these campaigns is we do technique tracking. So we have lots of different, we call them traps basically, and they run over all mail flow, and they look for certain either keywords or there are so many different things that they run on. Obviously not just keywords, I'm just trying to be vague here. But like they run on a bunch of different things and they have different names. So if an email hits on a certain few items, that might tell us, "Hey, this one might be BEC," and then that email can be surfaced to me to look into.Emily Hacker:Unfortunately, BEC is very, is a little bit more difficult to track just by the nature of it not containing phishing links or malware attachments or anything along those lines. So it is a little bit more keyword based. And so, a lot of times it's like looking at 10,000 emails and looking for the one that is bad when they all kind of use the same keywords. And of course, we don't just get to see every legitimate email, 'cause that would be like a crazy customer privacy concern. So we only get to really see certain emails that are suspected malicious by the customer, in which case it does help us a little bit because they're already surfacing the bad ones to us.Emily Hacker:But yeah, that's how we find these, is just by looking for the ones that already seem malicious kind of and applying logic over them to see like, "Hmm, this one might be BEC or," you know, we do that, not just for BEC, but like, "Hmm, this one seems like it might be this type of phishing," or like, "Hmm, this one seems like it might be a buzz call," or whatever, you know, these types of things that will surface all these different emails to us in a way that we can then go investigate them.Nic Fillingham:So for the folks listening to this podcast, what do you want them to take away from this? What you want us to know on the SOC side, on the- Emily Hacker:Mm-hmm (affirmative).Nic Fillingham:... on the SOC side? Like, is there any additional sort of, what are some of the fundamentals and sort of basics of BEC hygiene? Is there anything else you want folks to be doing to help protect the users in their organizations?Emily Hacker:Yeah, so I would say not to just focus on monitoring what's going on in the end point, because BEC activity is not going to have a lot, if anything, that's going to appear on the end point. So making sure that you're monitoring emails and looking for not just emails that contain malicious links or attachments, but also looking for emails that might contain BEC keywords. Or even better, if there's a way for you to monitor your organization's forwarding rules, if a user suddenly sets up a, a slew of new forwarding rules from their email account, see if there's a way to turn that into a notification or an alert, I mean, to you in the SOC. And that's a really key indicator that that might be BEC, not necessarily gift cards scam, but BEC.Emily Hacker:Or see if there is a way to monitor, uh, not monitor, but like, if your organization has users reporting phishing mails, if you get one that's like, "Oh, this is just your basic low-level credential phishing," don't just toss it aside and be like, "Well, that was just one person and has really crappy voicemail phish, no one's going to actually fall for that." Actually, look and see how many people got the email. See if anybody clicked, force password resets on the people that clicked, or if you can't tell who clicked on everybody, because it really only takes one person to have clicked on that email and you not reset their password, and now the attackers have access to your organization's email and they can be conducting these kinds of wire transfer fraud.Emily Hacker:So like, and I know we're all overworked in this industry, and I know that it can be difficult to try and focus on everything at once. And especially, you know, if you're being told, like our focus is ransomware, we don't want to have ransomware. You're just constantly monitoring end points for suspicious activity, but it's important to try and make sure that you're not neglecting the stuff that only exists in email as well. Natalia Godyla:Those are great suggestions. And I'd be remiss not to note that some of those suggestions are available in Microsoft Defender for Office 365, like the suspicious forwarding alerts or attack simulation training for user awareness. But thank you again for joining us, Emily, and we hope to have you back on the show many more times.Emily Hacker:Yeah, thanks so much for having me again.Natalia Godyla:Well, we had a great time unlocking insights into security from research to artificial intelligence. Keep an eye out for our next episode.Nic Fillingham:And don't forget to tweet us @msftsecurity, or email us at with topics you'd like to hear on our future episode. Until then, stay safe.Natalia Godyla:Stay secure.