Tech Broiler

Jason Perlow and Scott Raymond

Outsourcing email: Do the benefits outweigh the risks?

By | April 2, 2011, 6:22pm PDT

Summary: Sure it’s easier to outsource your email marketing to a third-party company. But is it really worth the risk?

On March 30, the email marketing company Epsilon was hacked. It’s too soon to tell how widespread the exposure is. Right now, Epsilon has said that the customer lists of a number of major brands have been compromised.

Epsilon claims that no personal information other than names and email addresses were revealed. Being a naturally suspicious person, I think I would rather wait for the other shoe to drop before breathing a sigh of relief–as well as keeping an eye out for targeted phishing scams.

I just received an email from Tivo:

Dear TiVo Customer,

Today we were informed by our email service provider that your email address was exposed due to unauthorized access of their system. Our email service provider deploys emails on our behalf to customers who have opted into email-based communications from us.

We were advised by our email service provider that the information that was obtained was limited to first name and/or email addresses only. Your service and any other personally identifiable information were not at risk and remain secure.

Please note, it is possible you may receive spam email messages as a result. We want to urge you to be cautious when opening links or attachments from unknown third parties.

We regret this has taken place and apologize for any inconvenience this may have caused you. We take your privacy very seriously, and we will continue to work diligently to protect your personal information.

If you have unsubscribed in the past, there is no need to unsubscribe again. Your preferences will remain in place.

Sincerely,
The TiVo Team

I think it’s great that the companies whose marketing lists were hit notified their customers. However, this is April 2, and the intrusion at Epsilon happened 3 days ago. In internet time, that’s pretty much a lifetime. Stolen information could have circled the globe a dozen times by that point. Epsilon themselves took 2 days to put out the press release; perhaps they notified the customers earlier, but it’s a moot point.

This situation points out a glaring fault in the outsourcing of your email marketing to a third party company. Putting aside for a moment that there are plenty of email marketing firms out there that don’t play nice or by the rules (i.e., spammers), there’s also the issue of corporate security and responsibility.

When something like this happens, people usually get fired. But if your company outsources the email to a third-party, does your company make someone internally a scapegoat and fire them, even though the intrusion didn’t happen on your own network? Do you take it out on the people that chose to outsource? Or on the ones responsible for choosing that specific email provider.

Obviously, after a situation like this heads do roll. And quite often it’s through no fault of your internal employees or the external marketing company. Sometimes you just can’t stop a dedicated, persistent hacker.

If the marketing company did their due diligence and secured their network as well as possible, you can’t blame them–unless, of course, your contract with them states that they owe you damages if they are unable to keep your information secure.

If you don’t want to hear excused about shifted blame, take the responsibility for your own data and host the email within your company. It’s not that hard to host your own mailing lists. And it doesn’t take as many resources as you might think. Applications like ListServ and Majordomo have been around for years and can handle millions of messages per day.

Maybe it’s time for big companies with large IT departments to rethink outsourcing some of their critical customer data and bring it back in house. At least then if you get compromised you can blame yourself, instead of worrying about your data being handled by strangers.

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Scott Raymond has been a technologist and system administrator for over 25 years.

Disclosure

Scott Raymond

I am the IT Manager for a high end audio and network systems integrator in northern Califronia. My wife works at Adobe Systems, Inc. Whenever I write an article that might involve Adobe or its products, I add a disclaimer at the top of the article to make sure she is not involved in any way. We have a small bit of stock with AT&T and no other major investments that would cause conflict.

Biography

Scott Raymond

Scott Raymond has been a technologist and system administrator for over 25 years. Starting as a hobbyist in his teens, Scott quickly learned that he could translate his passion and knowledge into a full-time career. He currently works as the IT Manager for a high end audio and network systems integrator in northern California. He has written technology articles for various publications in the past and began contributing to ZDnet as a guest blogger on Jason Perlow's Tech Broiler. Scott and Jason met in New York in the 1990s where they co-managed the New York City Palm Pilot Users' Group.

In his spare time, Scott is a trained chef and avid bicycling enthusiast, as well as a voracious reader of historical, science and horror fiction. He is a huge fan of pop culture, with a wide range of interest in TV shows, movies and games.

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RE: Outsourcing email: Do the benefits outweigh the risks?
FAULKNE 13th Oct
Good day to confirm this comment I would appreciate T h e b e s t o f Z D N e t d e l i v e r e d your website very nice to everyone Yes, Oracle is the only one with shared-disk architecture, but that is there advantage. It means you can add or remove nodes and the database lives on. In a shared nothing architecture, if you lose a node, you lose the system. I'm sure Oracle appreciates EMC highlighting their advantage.I also desire to signal in your RSS feeds. Thank you as soon as once again and maintain up the great operate Awesome post! Thank you very much || thanks for nice content this is really benefit to me.
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So the answer is No, then?
peter_erskine@... 2nd Apr 2011
I'd go along with that. In the Epsilon case, they have claimed that no actual email messages were taken. How would they know, and how plausible is that? I don't believe it.
The real question email users should ask themselves is: "How would I like all of my emails to be made public", because that is what the risk is.
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"How plausible is that?"
RationalGuy 4th Apr 2011
@peter_erskine@...

How plausible is it that an e-mail marketing company, which is the kind of company that sends out e-mail marketing campaigns for customers, not the kind of company that hosts e-mail services for customers, didn't expose any hosted e-mail? It's 100% plausible.

The nonsense behind this post is clear, right from the cheesy pirate graphic. "The cloud is not secure" is the battle cry of desperate IT people trying scare tactics instead of adding real value to their companies. The truth is most private e-mail systems are not any more secure.

This kind of diatribe is like the outraged parent who wants to ban "dangerous" children's toys, yet drives their kid around in a car where the kid is probably 10,000 times more likely to get injured.

I wish tech bloggers would write long scathing blog posts every time a private e-mail system is hacked somewhere in the world, and warn of the dangers of privately-hosted e-mail. They would probably never have room for any other kinds of posts.
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@RationalGuy

The web IS NOT and never has been secure. When multiple companies start putting all their eggs in the same basket they paint a big target on that basket.

When companies host their own email they reduce the target size. If Tivo and Walmart and a hundred other companies host with Acme Email and Acme Email is hacked, then *every* company was hacked.

If they don't, and Tivo gets hacked the other 100+ companies *are not*.

This is security 101 RationalGuy. Security is a multi-layer process, and redundancy (defense in layers) is the only way.

Keeping targets scattered so one shot can't take them out is basic security doctrine. So is having multiple layers of security.

The web is not secure. It never can be. Especially when you gather all your targets in one place...
@wolf_z
The web IS NOT and never has been secure.
Neither is the "private" side of your corporate firewall. But your security "expert" likes to pretend that it is.

When companies host their own email they reduce the target size. If Tivo and Walmart and a hundred other companies host with Acme Email and Acme Email is hacked, then *every* company was hacked.
This, of course, is true only if your cloud service provider is incredibly stupid. If you sign up for hosted e-mail and you don't have written assurances that your cloud-hosted systems aren't physically and logically separated from the other customers' systems, without common root access, then you are simply bad at your job. If your due diligence begins and ends with the "Compare Our Plans" table on the service provider's website, you deserve what you get.

These ideas are all implicit in your statements, and they are all nonsense:
- All private networks are risk-free.
- All cloud service networks are fraught with unimaginable risk.
- A compromise of any part of a cloud service instantly means that the entirety of the cloud has been compromised.
- The network that "I" control is more secure than the network "they" control.
- Implementing any security tactic is always better than not implementing it, regardless of overall security strategy.
@RationalGuy ... The "cloud" is meaningless as the only thing it designates is a server/s in one location. That's not new and it's not any different than they have ever been w/r to security or reliability. It's a moronic hype name to try to talk people into centralizing their data all in once place, and out of the hands of the owners.
@tom@...

Cloud services typically involve virtualized hardware with the ability to dynamically assign computing power to a cluster in response to demand, as well as geographically diverse infrastructures with synchronized data for business continuance and performance.

It's actually about de-centralizing data physically, while centralizing it logically in the cloud.
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Would you subscribe to a phone service if you knew the employees of your phone company would be listening to every call you made?

Email is obviously a form of communication, and for business, it generally contains some very sensitive information that you do not want anyone (especially your competitors) looking at.

As a former employee of a mail provider, I can tell you that almost all the employees read the customers private emails (personal experience and war stories with friends who worked for other providers). And the good ones (emails) get passed around the office.

Needless to say, I would never outdource my email, not for all the tea in China. I don't understand why anyone would (let alone a company) if you rely on secure and confidential communication, not just from hackers, but from the prying eyes of strangers.

This is a no brainer and is why the "cloud" fails. If people are going to have access to your level 1 data, then you are better protected if they work for you. If you let another company have access to that data, then you have no clue as to who is looking at it, when they are looking at it, what they can do with it, and who they can sell it to. The cloud fails, miserably.
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@peter_erskine@... You are absolutely correct: E-mail is NOT private! Go to Google and look for your emaiil address; you could be pretty surprised.
Anytime you pass data through as many as 30 nodes/machines, that's 30+opportunities to grab it if they're sniffing for you by keywords, etc.. If you're not using good encryption, then it's pretty easy to get at your mails anywhere along the route including the first & last servers.
Anyone using e-mail for confidential or higher data transmission/discussions is asking for trouble eventually.
E-mails aren't even transitory as some pages on websites are: They're sent or posted and then they live most likely in each servers archive for a long, long time, even thru server changeouts.
Never use media that passes thru the public domain, being web site or e-mail. And especially never put an email address in the clear in a mail.
Encryption can help, depending on how determined the perp is. And no, ROT-13 is NOT encryption.
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Avoid risk at all costs
Robert Hahn 2nd Apr 2011
If you fire everybody in your place who ever makes a mistake, you will soon have a company in which no one ever tries anything new. Your company will also be condemned to repeating the same mistakes, since everyone who could have learned from them was fired.
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Contributr
@Robert Hahn It is, however, an unfortunate aspect of the disposable workforce that has developed in this country. For a situation like this, the IT person in charge of setting up the outsourced email service would get the ax, while the executive that made the decision to outsource because he read about it in a trade magazine will get a fat bonus.
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RE: Outsourcing email: Do the benefits outweigh the risks?
Past_Prime_Nerd Updated - 3rd Apr 2011
@Scott Raymond
This is way you should outsourced it yourself without telling your boss. Spend the the saved money on developing new skill for yourself and be glad you dont have to manage that dam email server.
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@Robert Hahn
Or workers will stop reporting mistakes. Most managers will never know if you've been hacked if you don't tell them.
@Past_Prime_Nerd Most managers don't ever want to hear bad news, so not telling them is the surest path to career advancement. By the time the bad news becomes all too painfully obvious to the pointy-haired boss, you'll be out of there, and he won't remember you were ever there, so he'll just fire whoever is standing nearest the problem at the time he hears of it. Like maybe the poor slob who actually told him the bad news to begin with. Typical Corporate American Management at its finest!
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@Robert Hahn These kinds of critical mistakes are the most costly, yet effective, form of IT training available. You certainly want to avoid them. But if you incur the cost, who do you want to gain the benefits? Your own company or the next one that the person who made the mistake lands at?
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@Robert Hahn

This is not really as bad as you make it. You would not lack for innovation if you terminate every employee that makes a mistake... You would lack for employees.....
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Dont get it...
jessiethe3rd 3rd Apr 2011
Out sourcing email and services (and the risk) comes with the territory. It's about focusing on things that are most important to the business. Employing IT people instead of outsourcing can be wasteful.
@jessiethe3rd

And how wasteful will the lawsuits be? Or the damage to the company's reputation? Or the secrets stolen?

What if this hadn't been marketing? What if this had been an Enterprise-grade version of Gmail? It would have made the HBGary hack a world wide phenomenon.

Sounds pretty wasteful to me! IT is not wasteful...
@wolf_z Enterprise Grade Version of gmail is an oxymoron.
@wolf_z

So all cloud-service engagements end in lawsuits, damaged reputations and stolen secrets? No privately-hosted e-mail system was ever compromised leading to these things?

Here's the thing:
Your company is not better at security than Google is.

To concoct some ridiculous doomsday fantasy, and then say "that sounds pretty wasteful" is just a self-serving lie.
@RationalGuy Your company is not better at security than Google is.

Very true. But at least here, I know who to blame. And I wouldn't have to wait 3 years for the lawsuit to finish up. The Axe would fall immediately. How exactly do I get a hold of that Google engineer that was reading e-mails?
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You've shown your hand ...
RationalGuy 4th Apr 2011
@Badgered

But at least here, I know who to blame.

If you want an IT strategy that revolves around who you can blame things on, then there is no hope for you. Why not focusing on earning praise rather than dodging/placing blame?
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@RationalGuy Why not focusing on earning praise rather than dodging/placing blame?

So outsourcing can only earn you praise... I think you too have shown your hand. Do you sell cloud services by the way? Believe me, I would love for everything to be rosy and to have everyone singing kum-bye-ah... Life doesn't work that way. Things happen and problems arise. If someone is stealing my data or falling short of expectations, I'd prefer to know the person by name that does it.
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Praise
RationalGuy Updated - 4th Apr 2011
@Badgered

When I was talking about praise, I was talking about strategy, not the tactical decision on whether or not to move applications to the cloud. My point was that you don't act from a position of being great at what you do, of constantly performing beyond what is required. Success is not an assumption on your part. Therefore, you seem to come from a defensive place ... a place where you require scapegoats.

Life is better when you expect success and you build a team that can win consistently. It's much easier to focus on how to reward people who do really well all the time than it is to try to figure out how to punish people who lose. You make choices because you expect to lose. That is very telling.

No, I don't sell cloud services. I don't fear them, either. And I don't lie about them in order to create a cloud of fear around them.

I love IT. The only way for IT as a function to move forward is to move beyond the place where the user is the enemy and the MO is to hide as much from management as possible. The days of the secret technology priesthood are over. To survive, IT has to become great, because frankly there is too much competition and management doesn't believe the Big Lie anymore.
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Message has been deleted.
james347 3rd Apr 2011
Message has been deleted.
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mm
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Message has been deleted.
rolv@... Updated - 5th Apr 2011
@rolv@... thanks for the advertisement. Unwittingly, it helps add against the case of outsourcing email. Thank you!
Or you could use Gmail and know that all your addresses are on Google servers, and that all your emails will be read by Google. Clearly, having access to email addresses and knowledge of their holders' interests is very profitable.
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Just stop...
anothersmartguy 4th Apr 2011
outsourcing stuff.
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"If the marketing company did their due diligence and secured their network as well as possible, you can?t blame them?unless, of course, your contract with them states that they owe you damages if they are unable to keep your information secure."

That is exactly right. The exposure highlights the importance of ensuring your underpinning contracts with suppliers stipulates damages and the *monetary* value of those damages. Do not sign a boiler plate contract with a supplier if you do not understand the business model of the supplier. For example, adding additional days to a supplied service because of an outage benefits the supplier, not the customer.

having an internal employee to "blame" or perform a non-value adding function such as this with your own infrastructure creates no business value. If you do not want to hear excuses or shifting blame, take the responsibility of your own contracts.
It is not that hard to outsource your mailing lists with a solid supplier and a well-crafted underpinning contract. And it frees up your valuable resources while allowing your IT department to focus on the revenue generating IT functions instead of managing antiquated, deprecated communication platforms like listserv or majordomo.

Maybe it is time for big companies to rethink the "blame game" and instead focused on smart outsourcing.
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Considering that it is an eMail marketing company, how do you know that they didn't just sell you out? It seems just as likely as that they got hacked. Anytime you out-source or off-shore a corporate function you have essentially ?thrown away? whatever it is you may once have had.

When your customer list, or worse your business data, is in the hands of someone who is *not* part of your company, then they have no incentive to care what happens to it. In fact, many of them can profit from selling it to other business, or worst of all, to your competitors.

Your business can go belly-up and have but a small effect upon theirs, but you can not be so cavalier. Frankly, this idea of saving a tenth of a cent annually by out-sourcing business functions is insane, and I am sure that future university classes will be taught about the insipid foolishness of these days.

Regards,
Jon
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@JonathonDoe

This argument is ridiculously flimsy.

There is much more of a profit motive to secure you as a long-term customer in a business model built around such, than in a single short-term gain that committing a felony and selling your information to a competitor would provide. However, a bitter or angry IT person might more easily be enticed by a competitor to steal and sell your data for a big cash payout.
@RationalGuy

I think you could find corruption and security weaknesses in outsourced companies, as well as your own. So then to me it becomes a matter of control. Do I control the data, or do I let someone else control it? Being a control freak... guess which way I'm leaning.
Hi Rational Guy,

Of course there have been criminals in-house before, but there is a measure of control that can be exerted internally ... from the use of careful hiring practices to how I treat my employees, and the good morale that results from that.

In the worse case, if such criminal behavior is inevitable, then there are mitigating technological actions which may be taken to minimize the data exposure and the subsequent damage

However, once your data is stored elsewhere bu someone else, then you are at the mercy of their security design, their hiring practices, and their morale issues from how they treat their employees (are their disgruntled employees placing me at risk?).

These are all risks that are beyond my control once lazily I pass off the responsibility for my data to someone else. I would prefer to run the minimal risk of an internal mistake rather than the unknown liabilities of an external vendor having the fate of my business in their hands.

All of which doesn't even address issues like real-time access to the data, loss of network connectivity causing a business stoppage, different privacy and data laws governing the location where the provider operates, and the risk of the provider simply going out of business (and leaving me high and dry without either the service or my precious data).

No, once you examine all the factors, the risk of out-sourcing any IT function is far too high to take.

Regards,
Jon
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"Control freaks"
RationalGuy 4th Apr 2011
@Badgered & JonathonDoe

You both are proceeding from the false assumption that you are in control of data on your private network. Here's the reality -- there is no "edge" anymore. That's a bitter pill that "experts" in technology security seem to refuse to swallow. There is no safe harbor. There is no place that you control.

IT Security is a boxing match. It's no longer about not getting hit. It's about being able to get hit hard repeatedly and still be able to keep going.
Um, since when are email addresses secure past the moment that the owner of the mailbox clicks send the first time?
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Have you all lost the plot?
sysop-dr 4th Apr 2011
OK the story was about a company that provides email advertising and not hosted email. They are the ones who send out, among other things tivo's adverts to your email box. BUT they do not host Tivo's email servers so all of the noise about who hosts the companies email servers is moot and just noise ( read the story again, they are an email marketing company.) Please stick to the topic and not going off on cloud email which is a totally different story.
In this instance the only data available is 2 things, first name and email addrerss, the things needed to make a form letter, dear firstname and email it to username@your.email and the company has no other data for the campaign because that is all they need. If they got any emails it would be the marketing email which just means one more email out there trying to sell tivos. So for tivo, no risk, except they had to notify people and they should have done it sooner. They will continue to use this marketing guy because he will give them the next campaign free.
@sysop-dr

No... I think we're all aware of the plot. See the great thing about discussions is, they can evolve into broader discussions.
Scott and @RationalGuy are the only ones that addressed what actually happened here. This had nothing to do with someone's internal email being exposed or to whether or not you should be hosting your own internal email or outsourcing it.

These were incidents with the firms than handle email-marketing, basically email-blasts that confirm to regulations (have opt-in, subscribe, unsubscribe capabilities, etc.).

This had nothing to do with the client company's internal email systems.

As to whether Majordomo and ListServ can fullfill the same function as the commercial email-marketing systems - only on the most basic level. Many of the email-marketing services have sophisticated composition, publishing, issue management and other workflow-management features.

I imagine there is software you can purchase to do this inhouse also - but I'm not aware of it.
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All email is at risk, by definition.
alan.douglas@... 4th Apr 2011
Anything that goes out over the public airwaves of any kind is always at risk of interception, and all hosting sites, whether your own or a third party's, are at risk of being compromised.
All staff need to be educated on what goes into an email, and what doesn't. Privacy and security are NOT other people's responsibilities ... it falls to each and every employee using the system.
If the risks can be mitigated to the satisfaction of the corporate governing body, then outsourcing is a great solution, especially for SMBs.
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outsourcing works but....
magallanes 4th Apr 2011
Double outsourcing does not work, and triple outsourcing is dangerous.

For example, Tivo oursourcing their email marketing to Epsilon and Epsilon may be do the same with some third company company and so on... finally the works may be done by a small company that nobody cares about the privacy of the information.
Yes and No.
Hihi, don't assume you will ever get notice of all the hacks that happen out there. Doesn't matter if you host the data on your own servers. Hackers will steal it and you won't notice. And it doesn't matter. Let them go with the information.
Nobody notes, nobody cares.
One assumes that Tivo and such other companies did due diligence looking into the trustabilty of their provider.

if not, its their fault.

Outsourcing doesn't mean you can know less about the subject, on the contrary it means you have to know *more* to prevent being BS'd by the outsourcer.
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Misleading title
jred 6th Apr 2011
"Outsourcing Email" is significantly different from "Outsourcing Email Marketing". The article was ok, just not what I expected (an article on some of the dangers of email/Exchange hosting).
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