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Suspected Russian hack of U.S. government brings attention to obscure IT firm

U.S. Chamber of Commerce building in Washington
The U.S. Chamber of Commerce building in Washington.
(Manuel Balce Ceneta / Associated Press)

Before this week, few people were aware of SolarWinds, a Texas-based software company that provides vital computer network-monitoring services to corporations and government agencies around the world.

But the revelation that elite cyber spies have spent months secretly exploiting SolarWinds’ software to peer into computer networks — including those of U.S. government offices such as the State Department — has put many of its highest-profile customers in national governments and Fortune 500 companies on high alert.

“They’re not a household name the same way that Microsoft is. That’s because their software sits in the back office,” said Rob Oliver, a research analyst at Baird who has followed the company for years. “Workers could have spent their whole career without hearing about SolarWinds. But I guarantee your IT department will know about it.”

Now plenty of other people know about it, too, and not in a good way.

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Founded in 1999 by two brothers in Tulsa, Okla., ahead of the feared turn-of-the-millennium Y2K computer bug, the company’s website says its first product “arrived on the scene to help IT pros quell everyone’s world-ending fears.”

This time, its products are the ones instilling fears. The company began alerting about 33,000 of its customers Sunday that an “outside nation state” — widely suspected to be Russia — had found a back door into some updated versions of its premier product, Orion. The ubiquitous software tool, which helps organizations monitor the performance of their computer networks and servers, had become an instrument for spies to steal information undetected.

Hackers got into computers at the Treasury and Commerce departments and possibly other federal agencies, triggering a response involving the National Security Council.

One of SolarWinds’ customers, the prominent California cybersecurity firm FireEye, was the first to discover the cyberespionage operation. FireEye revealed earlier this month that its own systems were breached by attackers who made off with its defensive hacking tools. Among the other revealed spying targets were the U.S. departments of Treasury and Commerce.

The operation began at least as early as March, when SolarWinds customers who installed updates to their Orion software were unknowingly welcoming malicious hidden code that could give intruders the same view of their corporate network that in-house IT crews have. FireEye described the malware’s dizzying capabilities, which include lying dormant up to two weeks and cleverly masquerading its reconnaissance as legitimate Orion activity.

The breach has caused a crisis for SolarWinds, which is based in the hilly outskirts of Austin, Texas. The compromised product accounts for nearly half the company’s annual revenue, which totaled $753.9 million over the first nine months of this year. Its stock has plummeted 23% since the beginning of the week.

Its longtime CEO, Kevin Thompson, had months earlier indicated that he would be leaving the company at the end of the year as it prepared to spin off one of its divisions. The SolarWinds board appointed his replacement just a day before FireEye first publicly revealed the hack.

The same Russian intelligence outfit that hacked the Democrats in 2016 has tried to hack into more than 200 organizations’ systems, Microsoft says.

“This is an unimaginable, unfortunate situation,” Oliver said. “SolarWinds products have always been reliable. Its value proposition has been around reliability.”

SolarWinds executives declined interviews through a spokesperson, who cited an ongoing investigation that now involves the FBI and other agencies. Thompson’s last few weeks at the helm are likely to be spent responding to frightened customers, some of whom are also rankled by marketing tactics that might have turned SolarWinds and its highest-profile clients into potential targets.

The company earlier this week took down a web page that boasted of dozens of its best-known customers, from the White House, Pentagon and the Secret Service to the McDonald’s restaurant chain and Smithsonian museums.

SolarWinds estimated in a financial filing that about 18,000 customers had installed the compromised software, meaning that many of them were vulnerable to spy operations at some time this year.


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