IBM has announced that it is opening a Quantum Computation Centre in New York which will bring the world’s largest fleet of quantum computing systems online, including the new 53-Qubit Quantum System for broad use in the cloud.

Largest Universal Quantum System For External Access

The new 53-quantum bit/qubit model is the 14th system that IBM offers and IBM says that it is the single largest universal quantum system made available for external access in the industry, to date. This new system will (within one month) give its users the ability to run more complex entanglement and connectivity experiments.

IBM Q

It was back in March 2017 that IBM announced that it was about to offer a service called IBM Q that would be the first time that a universal quantum computer had been commercially available, giving access to (and use of) a powerful, universal quantum computer, via the cloud.

Since then, a fleet composed of five 20-qubit systems, one 14-qubit system, and four 5-qubit systems have been made available, and since 2016 IBM says that a global community of users have run more than 14 million experiments their quantum computers through the cloud, leading to the publishing of more than 200 scientific papers.

Who?

Although most uses of quantum computers have been for isolated lab experiments, IBM is keen to make quantum computing widely available in the cloud to tens of thousands of users, thereby empowering what it calls “an emerging quantum community of educators, researchers, and software developers that share a passion for revolutionising computing”.

Why?

The hope is that by making quantum computing more widely available, it could lead to greater innovation, more scientific discoveries e.g. new medicines and materials, improvements in the optimisation of supply chains, and even better ways to model financial data, thereby leading to better investments which could have an important and positive knock-on effect in businesses and economies.

Partners

Some of the partners and clients that IBM says it has already worked with its quantum computers include:

• J.P. Morgan Chase for ‘Option Pricing’ – a way to price financial options and portfolios. The method devised using the quantum computer has accelerated things dramatically so that financial analysts can now perform option pricing and risk analysis in near real-time.
• Mitsubishi Chemical, Keio University and IBM, on a simulation related to reactions in lithium-air batteries which could lead to making more efficient batteries for mobile devices or automotive vehicles.

Quantum Risk?

Back in November 2018 however, security architect for Benelux at IBM, Christiane Peters, warned of the possible threat of commercially available quantum computers being used by criminals to try and crack encrypted business data.

As far back as 2015 in the US, the National Security Agency (NSA) warned that progress in quantum computing was at such a point that organisations should deploy encryption algorithms that can withstand such attacks from quantum computers.

The encryption algorithms that can stand up to attacks from quantum computers are known by several names including post-quantum cryptography / quantum-proof cryptography, and quantum-safe / quantum-resistant cryptographic (usually public-key) algorithms.

What Does This Mean For Your Business?

The ability to use a commercially available quantum computer via the cloud will give businesses and organisations an unprecedented opportunity to solve many of their most complex problems, develop new and innovative potentially industry-leading products and services and perhaps discover new, unthought-of business opportunities, all without needed to invest in hitherto prohibitively expensive hardware themselves. The 15 hugely powerful systems now available to the wider computing and business community could offer the chance to develop products that would provide a real competitive advantage in a much shorter amount of time and at much less cost than traditional computer architecture and R&D practices previously allowed.

As with AI, just as new technologies and innovative services can be used for good, their availability could also mean that in the wrong hands they could be used to pose a new threat that’s very difficult for most business to defend against. Quantum computing service providers, such as IBM, need to ensure that the relevant checks, monitoring and safeguards are in place to protect the wider business community and economy against a potentially new and powerful threat.

Two security specialists who performed a physical break-in on the US courthouse that hired their company for a penetration test have claimed that their break-in was part of their assessment of security.

What Happened?

Dallas’ State Court Administration (SCA) is reported to have hired security company Coalfire Labs to conduct testing of the security of the court’s electronic records at the Dallas County Courthouse in the town of Adel, around 20 miles west of Des Moines.

The police were called to the courthouse just after midnight on the 11th September where two men, who had been seen walking around on the third floor, came to the door to meet the police.  When the two men, named as Justin Wynn and Gary Demercurio, came to the door, they were allegedly carrying multiple burglary tools and allegedly claimed that they had been contracted to break into the building and to check the courthouse alarm system and how responsive the police were.  The two men were promptly arrested, jailed and released on a $50,000 bond.

No Knowledge

It has been reported that at the time, Dallas County claimed to have no knowledge of the security company or their plans, but Iowa’s State Court Administration did later release a statement confirming that it hired the company Coalfire Labs to test the security of the court’s electronic records.

The State Court Administration did, however, say that although it had asked the company to attempt unauthorised access to court records through various means to learn of any potential vulnerabilities, it didn’t intend or expect those means to include forced entry to the building, an act that it could not condone (certainly not for cyber testing).

Would A Physical Break-In Be Part of a Pen Test?

Some tech commentators have speculated that some cybercrimes require the criminal to be physically close to target devices, which would, therefore, require companies and organisations to perhaps consider investing in physical defences as well as cyber defences.

Coalfire

Coalfire Labs, the global company that was hired to carry out the pen testing assessment, (reported to have carried out hundreds of assessments for government agencies in the past) has been unable to comment on this particular case due to the confidential nature of its work, security and privacy laws, and the fact that a legal case is active.

Similar?

One thing that may not be good news for the two penetration testers is that there have been reports that a break-in at the Polk County Historic Courthouse in nearby Polk County on 9 Sept was apparently similar in nature to the Dallas County Courthouse break-in.

What Does This Mean For Your Business?

Physical security is, of course, an important part of protecting the whole business, but under GDPR, data security should not involve leaving personal data anywhere that it could easily be accessed by unauthorised persons, whether it is in a physical or virtual location.

Penetration testing is a legitimate and valuable way for companies and organisations to assess where more work needs to be undertaken to ensure the safety of all data and information that they hold, but it is unlikely that many UK businesses would consider a physical break-in to be a legitimate part of what is usually and electronic-based assessment.  It remains to be seen what happens in the US court case.

The new cloud market report from the Synergy Research Group shows that cloud-associated markets, such as the public cloud, are growing at rates ranging from 10% to over 40% and the annual spending on the cloud may double in four years.

IaaS & PaaS Biggest Growth

Synergy’s half-yearly report shows that across the seven key cloud service and infrastructure market segments, revenues for operator and vendors in the first half of 2019 exceeded $150 billion, which is a rise in growth of 24% from the first half of 2018.

The biggest area of growth in the cloud infrastructure sector was in the infrastructure as a service (IaaS) and platform as a service (PaaS) market segments where there was a massive 44% growth rate.  IaaS is online, virtualised computing resources over the internet, and PaaS is where a provider hosts the hardware and software on its own infrastructure with PaaS products enabling developers to build custom applications online without having to worry about data serving, storage, and management.

The Synergy report also showed growth rates of enterprise SaaS at 27%, UCaaS at 23% and hosted private cloud infrastructure services at 20%.  The report also shows that spending on cloud services is now much greater than spending on supporting data centre infrastructure.

Infrastructure Investments

In the first half of 2019, cloud service providers spent $55 billion on the hardware and software used to build cloud infrastructure (evenly split between public and private clouds).  These infrastructure investments helped cloud service providers to generate over $90 billion in revenues from their cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and enterprise SaaS.

Leaders

The Synergy report shows that the leaders in the IaaS and PaaS segments in the first half of 2019 are Microsoft, Amazon/AWS, Dell EMC, Cisco, HPE and Google.  Back in February, Amazon’s Web Services (AWS) reported a massive 45% growth in revenue within the fourth quarter, mostly fuelled by big profits from its public cloud arm.

Other big names in that market segment include Salesforce, Adobe, VMware, IBM, Digital Realty, Equinix and Rackspace.

All these big players together account for over half of all cloud-related revenues.

What Does This Mean For Your Business?

The public cloud is being embraced by businesses as they seek to outsource and ditch traditional capital investment and maintenance problems and costs while reaping the benefits of having the pay-as-you-go scalability, security, and outsourced expertise that allows them to free up more of their own resources.  Cloud service providers are now investing heavily to win large slices of the cloud market with Amazon and Microsoft as market leaders, and as the Synergy report shows, this investment is delivering big revenues and impressive growth rates, particularly in the IaaS and PaaS market segments.

Multinational IT security company ‘Trend Micro’ has highlighted the future threat of cybercriminals making and posting (or threatening to post) malicious ‘deep fake’ videos online in order to cause damage to reputations and/or to extract ransoms from their target victims.

What Are Deepfake Videos?

Deep fake videos use deep learning technology and manipulated images of target individuals (found online), often celebrities, politicians, and other well-known people to create an embarrassing or scandalous video such as pornography or violent behaviour. The AI aspect of the technology means that even the facial expressions of those individuals featured in the video can be eerily accurate, and on first viewing, the videos can be very convincing.

An example of the power of deepfake videos can be seen on the Mojo top 10 (US) deep fake video compilation here: https://www.youtube.com/watch?v=-QvIX3cY4lc

Audio Too

Deepfake ‘ransomware’ can also involve using AI to manipulate audio in order to create a damaging or embarrassing recording of someone, or to mimic someone for fraud or extortion purposes.

As an example, in March this year, a group of hackers were able to use AI software to mimic (create a deep fake) of an energy company CEO’s voice in order to successfully steal £201,000.

Little Fact-Checking

Rik Ferguson, VP of security research and Robert McArdle, director of forward-looking threat research at Trend Micro recently told delegates at Cloudsec 2019 that deepfake videos have the potential to be very effective not just because of their apparent accuracy, but also because we live in an age when few people carry out their own fact-checking. This means that by simply uploading such a video, the damage to reputation and the public opinion of the person is done.

Scalable & Damaging

Two of the main threats of deepfake ransomware videos is that they are very flexible in terms of subject matter i.e. anyone can be targeted, from teenagers for bullying to politicians and celebrities for money, and they are a very scalable way for cybercriminals to launch potentially lucrative attacks.

Positive Use Too

It should be said that deepfakes don’t just have a negative purpose but can also be used to help filmmakers to reduce costs and speed up work, make humorous videos and advertisements, and even help in corporate training.

What Does This Mean For Your Business?

The speed at which AI is advancing has meant that deepfake videos are becoming more convincing, and more people have the resources and skills to make them.  This, coupled with the flexibility and scalability of the medium, and the fact that it is already being used for dishonest purposes means that it may soon become a real threat when used by cybercriminals e.g. to target specific business owners or members of staff.

In the wider environment, deepfake videos targeted at politicians in (state-sponsored) political campaigns could help to influence public opinion when voting which in turn could have an influence on the economic environment that businesses must operate in.

France’s finance minister, Bruno Le Maire has said that the development of Facebook’s new Libra cryptocurrency will be blocked in Europe unless concerns over risks to consumers and to the monetary systems of countries can be addressed.

Libra – Announced in June

Announced in June this year and due to be launched in 2020, Libra is Facebook’s cryptocurrency which will enable payments to be made by a special phone app and by messaging services such as WhatsApp so that spending the new currency could be as easy and fast as texting.  Management of the currency, units of which can be purchased via Libra’s platforms and stored it in a digital wallet called “Calibra”.

In addition to Facebook, the Association has 27 other members/partners, all of whom will most likely have to accept Libra, including Mastercard, PayPal, eBay, Spotify, Uber, Vodafone, and a variety of charities such as Women’s World Banking.

For Use By The ‘Unbanked’

Facebook has promoted Libra as being targeted mainly at the 1.7 billion adults worldwide who do not have a bank account, and who use services such as payday loans although 1 million plus of these already have a smartphone, thereby enabling them to use the apps through which Libra can be operated.  This “unbanked” segment of the potential market contains mainly people from developing countries, a large proportion of which are women.

Why Does France Object?

In Bruno Le Maire’s speech at the OECD Global Blockchain Policy Forum 2019 he identified several reasons why France would consider blocking Libra in Europe, the main one being that monetary sovereignty of countries may be at stake from a possible privatisation of money e.g. because Facebook is a sole actor (company) with more than 2 billion users on the planet. Mr Le Maire also expressed concern that Libra’s digital credits could facilitate money laundering and terrorism.

Other concerns about Libra’s introduction include:

• Possible risks to consumers (their personal data) in the light of Facebook’s sharing of user data with Cambridge Analytica.
• Consumers may turn to cryptocurrencies like Libra during a time of national crisis, which could make it more difficult for governments to stabilise their economies, thereby making matters worse.
• The need for Libra to meet regulations for consumer protection, money laundering and financing terrorism.
• Libra uses blockchain, which many banks still consider to be an emerging technology that should be approached with caution.

Highlights The Need To Work Together

According to the head of policy and communications at the Libra Association, the concerns expressed by Bruno Le Maire highlight the need for the project’s backers to work together with regulators to make the implementation of the Libra project safe, transparent and consumer focused.

What Does This Mean For Your Business?

For Facebook, Libra is an opportunity to monetise another of its services, and an opportunity to diversify.  Even though Facebook has promoted Libra as a currency for use by the 1.7 billion people without bank accounts, it is more likely that Libra will gain more users with bank accounts in developed countries more quickly.  Also, some more sceptical commentators have noted that Libra may be less about money and blockchain but more about gathering more information about the identity of clients.

Even though Libra users are not intended to be businesses, if Libra does help the ‘unbanked’ this could have a knock-on effect in helping that segment of society to buy more goods and services, thereby helping businesses and the economy.

Libra looks set to face more scrutiny and attempts to make sure that it meets the regulation of countries that are worried by the possible shift in control from governments and central banks to big business that Libra could bring. This shift in control could have a number of effects on the business environment and the economies of countries if Libra proves to be popular.