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Offshore coding work raises security concerns

By Dan Verton
May 5, 2003 12:00 PM ET

Computerworld - MYRTLE BEACH, S.C. -- IT professionals are raising serious questions about the U.S. software industry's reliance on overseas software developers, arguing that the practice puts companies and the U.S. economy at risk.
A recent study by Gartner Inc. predicts that by 2004, more than 80% of U.S. companies will consider outsourcing critical IT services, including software development, to countries such as India, Pakistan, Russia and China. But some users said the trend needs to be given a sanity check in light of recent changes in the global security environment.
At last week's Techno-Security Conference here, users peppered a panel of corporate security officers with questions about the wisdom of outsourcing software development to cheap labor overseas, where there is little or no way to ascertain the security risk that workers may pose.
Of particular concern to some attendees is the work that is being sent to China. While not yet a major provider of outsourcing services, China has a significant economic espionage program that targets U.S. technology, the users noted. Also of concern are countries in Southeast Asia, particularly Malaysia and Indonesia, where terrorist networks are known to exist.
Speaking directly to Oracle Corp. Chief Security Officer Mary Ann Davidson, one audience member said that it's "ironic that the countries the software industry trusts the least with binary code are the places where source-code development is being sent."
Davidson acknowledged that Oracle, which sells its software to all of the major U.S. intelligence agencies, does outsource some of its development work to companies in India and China. However, "we give read access, not write privileges, to developers in India," she said. "And for the work done in China, it's quality control, and they do not need source-code access to do that."
Although Davidson acknowledged that there is "a national security issue" involved in moving development work overseas, she said there is also no guarantee that a worker who is a U.S. citizen won't intentionally harm source code.
The economic situation today is such that "you can't build these products without non-U.S. citizens," said Davidson. "Whether you like it or not, our national secrets are already being preserved by people who built these parts of the core infrastructure, and they're not U.S. citizens."
Assessing Risks
Tim McKnight, chief information assurance officer at Los Angeles-based Northrup Grumman Corp. and a former security officer at Cisco Systems Inc., said companies must put in place a verification and auditing process. And he said that effort will be costly.
"At Cisco, we had teams that would go overseas and verify the people that were there,

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