Friday, December 28, 2007

FT.com / Companies / IT - Technology predators on the prowl

FT.com / Companies / IT - Technology predators on the prowl

Technology predators on the prowl
By Philip Stafford

Published: December 28 2007 01:21 | Last updated: December 28 2007 01:21

KKR’s £600m takeover last week of Northgate Information Solutions was proof that the UK technology sector remains fertile territory for dealmakers.

November was a turbulent month as fears began to bite that the credit crunch would force the financial services industry to curb discretionary technology spending, such as on consultants.

A profit warning from Detica, one of the sector’s largest players, contributed to the FTSE Software and Information Technology sector’s worst month since the dotcom bubble burst in March 2000.

Mild cautionary statements were treated like heavy profit warnings and the long distrust the City has held for technology resurfaced, culminating in early December with the pulled initial public offering of Sophos, the IT security group, despite solid recurring revenues and a 25-year track record.

The coming year is likely to prove a tough one for many, especially those with exposure to financial services. After five years of sequential growth, Gartner, the consultancy, is predicting global growth of 5.5 per cent, down from about 8 per cent in 2007.

Yet beneath the headline fears, investors, bankers and analysts remain optimistic that corporate earnings and activity will not dry up.

The Northgate deal capped a flurry of bid activity in December as predators emerged to sniff out undervalued assets.

They appeared willing to pay chunky premiums.

Northgate was taken out at 40 per cent more than its prevailing share price, while NSB Retail Systems agreed a £160m deal with US-based Epicor at a 60 per cent premium.

Other recent deals include Pace Micro Technology‘s purchase of the set-top box and connectivity business of Dutch group Philips for £68m.

Xploite, the IT managed services group, is in talks with several bidders.

Investors have grown more comfortable with technology stocks as many companies in the sector have matured and proved far more efficient at converting their cash into operating profit.

Furthermore, IT operations are embedded into corporate life as never before.

“In a tougher market, there will be more focus on outsourcing tech activity,” said Mike Tobin, chief executive of Telecity, the data centre hosting company.

FDM, the IT staffing company, actually forecast results would be materially ahead of previous expectations as a shortage of specialist IT skills meant banks could not rely solely on in-house teams.

“Product cycles are typically stronger than the economic cycle – so we are relaxed about the prospects for well-placed product companies like Autonomy, Aveva, Fidessa, Micro Focus and Innovation,” said George O’Connor, an analyst at Panmure Gordon.

Will Wallis, an analyst at Numis Securities, said Northgate’s takeover could boost the share prices of companies that have been subject to takeover rumour or talks with private equity, such as Misys, Intec Telecom and Coda.

He pointed out that Northgate was sold on a prospective multiple of 18 times enterprise value/net operating profit after tax.

“It’s in line with multiples paid by private equity in the UK software sector prior to the credit crunch,” he said.

He also predicted it would boost other local government software companies, such as Civica and Anite.

“This deal opens up the possibility of consolidation in the public sector, led by private equity,” he added. “Both Civica and IBS ... are valued at just half the multiple that KKR is paying for Northgate.”

Yet Northgate could still be the largest deal for some time.

Graham Bird, fund manager at SVG, which invested in Northgate, said: “I wouldn’t be surprised if there was a pick-up in merger and acquisitions activity as many valuations are extreme.”

“Many of these companies are run far better. In the sell-off, there was no distinction between good and bad companies and I think private equity will spot this.”

But he added: “There’s unlikely to be mega-deals while the banks are not open properly.”

Deals concluded are likely to be “without the need to syndicate with other banks,” he said.

Trade buyers flush with cash are also likely to remain interested. Datatec, one of the largest IT services companies on Aim, has a long standing plan for further acquisitions and Jens Montanana, chief executive, remains bullish.

“It will play into the hands of operators and not the private equity players as we have assets to make synergies,” he said.

“We think there is going to be an opportunity for us,” he said. “But it will take time to work its way through. Some sellers still have silly ideas for valuations.”

Nevertheless if the UK and US economies fall into recession, valuations could yet fall further.

Copyright The Financial Times Limited 2008

Monday, December 17, 2007

FT.com / World - Companies call for centralised e-crime unit

FT.com / World - Companies call for centralised e-crime unit

Companies call for centralised e-crime unit
By Maija Palmer, Technology Correspondent

Published: December 17 2007 01:46 | Last updated: December 17 2007 01:46

Businesses are becoming increasingly frustrated at having no centralised organisation to which they can report instances of computer crime, and are calling on the government to form a central police e-crime unit.

David Roberts, chief executive of the Corporate IT Forum, which represents computer users in about half of the FTSE 100 companies, said his members were left with the feeling that the government did not take cybercrime seriously.

“There is no source to go to to report e-crime, other than the local police station – and they have very little understanding of it. It is a significant problem,” Mr Roberts said.

He said businesses previously had a close relationship with the National High Tech Crime Unit. However, since this was merged with the Serious Organised Crime Agency in April 2006, there has been less frequent contact. Soca does not directly take reports of cybercrime, and follows up only larger cases.

“Whereas I fully supported the need for an agency to concentrate on serious and organised crime, the loss of the NHTCU seems to have reduced the focus on ‘everyday’ computer crime that is relevant to UK business and the general public,” said Paul Simmonds, global information security director of ICI.

The recent loss of the personal details and bank accounts of 25m people by HM Revenue and Customs has brought new urgency to tackling the problem of cybercrime.

A number of high-profile security experts have signed an online petition (at http://petitions.pm.gov.uk/ecrime) on the Number 10 Downing Street website, which urges the government to create a central e-crime unit. The petition is backed by Infosecurity Europe, organisers of Europe’s biggest annual IT security conference.

The Association of Chief Police Officers has submitted a proposal to the Home Office for a national e-crime unit, but the Home Office says it needs more clarification on detail and costs.

A report by the science and technology committee of the House of Lords into internet security this summer also recommended the formation of such an organisation, but it was quickly dismissed by the government. There is particular concern that there are too few resources for following up smaller computer crimes, such as fraud on the Ebay auction site, or small amounts of money stolen from online bank accounts.

Under new guidelines, individuals must report cases of identity fraud to the banks rather than police, and it is up to the banks to decide which cases to take to the police. Local police forces will record crimes such as Ebay fraud, but one force, which declined to be named, admitted it did not have the resources to pursue many of these.

“There is no one to chase the small stuff, and that is why we need a central co-ordinating unit. Soca is just interested in the big stuff, but it’s the little stuff that really hurts the citizen,” said Lord Erroll, who sits on the Lords committee and is one of the signatories to the petition. “Losing £500 can be quite critical for the average person.”

A survey last year by Get Safe Online, a government-backed initiative to alert consumers to computer crime, suggested 21 per cent of people thought e-crime was the type of crime they were most likely to encounter.

However, specific statistics on the number of computer crimes are not even being collected by the government.
Copyright The Financial Times Limited 2007

Friday, December 14, 2007

FT.com / In depth - Google in challenge to Wikipedia

FT.com / In depth - Google in challenge to Wikipedia

Google in challenge to Wikipedia
By Richard Waters in San Francisco

Published: December 14 2007 21:41 | Last updated: December 14 2007 21:41

Google has taken direct aim at Wikipedia with a project designed to supplant the collectively produced encyclopedia as the primary source for basic information on the web.

Known as Knol, and currently restricted to a limited test, the service is a highly ambitious attempt to collect and organise “user-generated information” in all fields of knowledge.

The move echoes other Google efforts to transform online behaviour – although some, such as Google Base, designed as an open database to collect items for sale, have failed to catch on widely.

With Google’s service, anyone will eventually be able to write a web page about any topic they want, and have it indexed by Google and other search engines. Authors will also be able to benefit from any advertising placed on the page.

Google gave few details about how it would rank submissions to highlight the most accurate or useful, but the group said user ratings would be important.

“A Knol on a particular topic is meant to be the first thing someone who searches for this topic for the first time will want to read,” Udi Manber, a Google engineer, wrote on a blog post that announced the project.

That role is often taken by Wikipedia entries, which frequently appear high on Google’s and other search engines’ results, making the collective encyclopedia one of the 10 most-visited sites.

The design of the Google project seeks to address some of the fundamental issues that have hampered the controversial Wikipedia. Entries in the encyclopedia are anonymous and often lead to heated “edit wars”, as people with rival opinions compete to change items. By contrast, Google plans to identify its writers and avoid the collective editing process altogether.

“The key idea behind the Knol project is to highlight authors,” Mr Manber said.

He added Google expected rival notes to appear on many topics: “Competition of ideas is a good thing.”

That approach will avoid the “problems of governance that come from trying to run a collaborative community” like Wikipedia, said Larry Sanger, a founder of the website who split with that project over its failure to apply stricter editing policies.
Copyright The Financial Times Limited 2007

Monday, December 10, 2007

FT.com / Technology - Where do IT vendors think business’s focus should be?

FT.com / Technology - Where do IT vendors think business’s focus should be?

Where do IT vendors think business’s focus should be?
By Alan Cane

Published: December 5 2007 04:40 | Last updated: December 5 2007 04:40

Vendors large and small believe that many – perhaps most – large organisations are capable of making big improvements in their use of IT.

They believe several technologies that had promised much in the past without necessarily delivering have now developed to the point where they can be used, for example, to re-engineer legacy applications or control data centres remotely.

These possibilities could be prejudiced, however, by factors including a deteriorating financial climate, which could place extra pressure on strained budgets, and a tenacious if mistaken belief among some managers that IT represents a cost rather than a source of innovation. These could hamper willingness to invest in new technologies.

In its 2007 global IT survey, however, published today, the consultancy Accenture found a close relationship between IT innovation, execution and productivity. “Those organisations that keep their IT investment steady in good and bad times have progressed most in using IT to transform the way they do business,” it says, arguing that organisations that are most advanced in adopting new mobility, collaboration and insight technologies performed better than their slower contemporaries across a range of benchmarks.

It found, for example, that the majority of what it describes as “high performers” – companies that excel in both innovation and execution – have shed most of their legacy systems and are investigating innovations such as software as a service and service-oriented architectures, which, it suggests, may lead to organisations owning only the software they have developed themselves to seek competitive advantage.

Vendors are aware that the “green agenda” is weighing heavily on CIO’s minds and pockets, although most seem more prepared to pay lip service to reducing their carbon footprint than actually doing anything about it.

A survey carried out by the software giant Symantec concluded that improving sustainability and meeting “green” policies set out at corporate level were not high priorities for IT departments in Europe. CIOs were driven to adopt green policies – improving energy efficiency, cutting cooling costs – in their data centres for operational rather than altruistic goals.

Only one in seven, Symantec found, had successfully implemented a green data centre. European organisations, however, were ahead of the US in adopting green policies.

John Hughman, senior technology analyst at the consultancy Ernst & Young, warns of the consequences of the explosion in IT usage and subsequent growth in data, which has put heavy pressures on the data centre.

The lifecycle costs of running a data centre now exceed the initial capital expenditure and a significant proportion of these costs can be attributed to power use – about half the budget goes on cooling.

Organisations must invest in virtualisation, running several operating systems and/or applications on a single machine, he says, to reduce the number of physical machines, pointing out that most servers only run at about 20 per cent utilisation.

He also calls for the relationship between data centre budgets and the cost of powering them to be made explicit. “It is unusual for CIOs to own this cost and therefore few are incentivised to help reduce it,” he says.

Most vendors think the pressure to “go green” will intensify and force change. Joe Hemming, chief executive of computing services group LogicaCMG, expects to be asked to undertake projects to help companies reduce their carbon footprint: “Whether this is through smart metering of energy use, green supply chains or the outsourcing of functions to low carbon environments such as India, this will characterise the year ahead.”

Mark Pearce, head of product marketing for the US-based networking group Enterasys agrees that top of the list for most CIOs will be managing down operational costs, data centre space and environmental impact.

“All three are going to drive virtualisation up the strategic agenda,” he says, adding the warning: “The CIO must not allow his team to rush into virtualisation without due diligence on key issues such as security. Virtualisation impacts a number of other disciplines and to allow a headlong rush into this area could prove extremely costly if done in isolation.”

Some vendors, however, think the IT department still has to win its corporate spurs on a decidedly difficult battlefield.

Steve Gedney, managing director of Borland’s UK operations sees next year as a tipping point. “Put simply, 2008 is the year when CIOs have to prove IT really can work with the business to transform processes and benefit the organisations they serve.”

“This year has seen new levels of large-scale IT project failure with organisations still working in silos using disconnected business and IT processes. The priority for CIOs in 2008 is to drive change to improve this situation,” he said, arguing for better IT metrics so that performance can be measured and improvements demonstrated.

Cisco, the company whose routers underpin much of the traffic on the internet, has for some years been expanding its presence in videoconferencing, in the belief that collaboration will be high up the CIO agenda.

According to Nick Earle of the company’s European markets division, business video will be the next big thing, as executives seek ways to collaborate without enlarging their carbon footprint.

“Some of the latest virtual conferencing technologies make the meeting experience almost as good as being face-to-face without the hassle of travelling. That is why I believe collaboration, enabled by business video, will top the IT agenda in 2008.”

Better communications are also high on the list for the networking group ntl:Telewest. Stephen Beynon, managing director of its business division, says he expects continued strong demand for ethernet services. “We expect this trend to continue in 2008, especially as users evolve beyond point-to-point and move to virtual private networks (VPNs). Ethernet VPNs are more complicated, which will see more customers seeking increased control over, and visibility of, the performance of their network.”

That, he thinks, is the job of the network provider, with simplicity and transparency the key.

Finding ways to cut costs so as to free resources for innovation is also expected to occupy the CIO’s attention.

Mirapoint of the US provides a simple example of where cost-savings can be madein the realm of e-mail. Commercial offerings are costly and should be limited to knowledge workers. It supplies staff with low collaboration needs with a simple e-mail appliance that cuts costs by half.

According to Alan Elliot, the company’s head of marketing, for every 10,000 employees who are shifted to the Mirapoint systems the company saves $1m a year: “This money can be spent on new technologies instead of an expensive e-mail platform,” he says.

Copyright The Financial Times Limited 2007

FT.com / Technology - What’s on CIO wishlists?

FT.com / Technology - What’s on CIO wishlists?

What’s on CIO wishlists?
By Alan Cane

Published: December 5 2007 04:40 | Last updated: December 5 2007 04:40

Aligning technology with the business, while dealing with the pressure on space and power in the data centre and addressing green issues are the priorities for many chief information officers next year.

Security is now so critical that it automatically figures near the top of every agenda. Steven Bandrowczak, CIO for Nortel, the Canadian telecommunications manufacturer, points out that a security contingency plan is there to prevent a breach of security that can badly damage a brand.

A thoroughly unscientific straw poll of CIOs, principally from the US and UK, revealed, nevertheless, that a few other themes come to the fore. Steve Bozzo, CIO of New York based online florist 1-800-Flowers.com, places business alignment at the top of his list.

“For 2008, as always,” he says, “companies will be most successful if IT is strongly aligned with the businesses it supports” going on to point out that companies must migrate to an “agile” architecture if they are to bring products to market that will have a meaningful impact on earnings and revenue: “Migrating to a Services Oriented Architecture will be the only way to accomplish this.”

This is in line with preliminary findings on 2008 priorities by research firm Gartner, which shows CIOs seeking to focus on aligning IT with growth and innovation. “Looking at costs is straightforward but prioritising growth and innovation is much more challenging,” says Dave Aron, a Gartner analyst looking at CIO issues.

Guy Lidbetter, chief technology officer for the big European computing services group Atos Origin, agrees, noting that the CIO agenda is being driven by a need for managed innovation.

He emphasises the importance of demonstrating to managers the value that IT investments bring to the business and ensuring IT is agile enough to support changing business needs. “In the context of infrastructure, standardisation, virtualisation and automation will deliver. In applications, enterprise architecture, service-oriented architecture and – potentially – Web 2.0 and collaboration will deliver.”

Note how quickly methodologies such as “agility” – developing software in a quicker, less formal way – and “service-oriented architecture” – ways of persuading legacy systems to work with the smart, new stuff – have moved from “might have” to “must have”.

Bryan Doerr, chief technology officer of Savvis, a US-managed service group, says, however, that to make the most of virtualisation, businesses need to invest in a secure and robust IT infrastructure. He says: “Both vendors and organisations are embracing new, virtualised technologies to yield more flexible and cost effective solutions. As it continues to mature, I predict it will become less of a differentiator for businesses and more of a commodity.”

Rorie Devine, chief technology officer for the online gambling organisation Betfair, concurs: “Virtualisation is definitely part of the mainstream now.”

Mr Devine’s chief priority next year will be to execute the business plan while helping to shape the business strategy. The processing load will be substantial: “The number of transactions we process will again be more than all the other years of our existence added together.”

Web 2.0 and social networking may be becoming candidates for the mainstream, although some CIOs have their reservations. Bob Worrall, for example, CIO of Sun Microsystems, reckons to have talked to well over 100 of his contemporaries over the past year and believes that social networking represents a new threat. “There is a lot of information out there on blogs and wiki, but there is no easy way to harvest that information and make it available to the organisation” he says.

Sun, however, has created a virtual Californian building in cyberspace and is experimenting with its use as a meeting place for remote staff.

Mr Worrall says that every CIO is struggling with the problem of power and space in the data centre. Sun itself is downsizing from seven corporate data centres to three, aided by a combination of new, more powerful servers based on novel chip technology and virtualisation – running several operating systems and/or applications on the same server.

Brian Jones, a former CIO for both the spirits group Allied Domecq and Scottish Power, says that IT in large companies often grows in an uncontrolled fashion. “There is often a need to remove the complexity that has grown up over time and set a simplification agenda directly linked to the objectives of the business overall,” he says, arguing that this latter aim can often be lost if the transformation is poorly focused.

He expects pressure on IT costs will not ease and that CIOs will be forced to balance the need for innovation against tightening budgets. “One trick that CIOs are going to have to learn, if they have not already, is how to take advantage of the latent value in their suppliers.” Suppliers have often spent millions on research and development which could benefit a company. While at Allied Domecq, for example, he formed a partnership with the telecommunications group that transformed Allied’s messy, “basket case” of a communications network, while reducing costs by £3m a year.

Mr Bandrowczak of Nortel, is using virtualisation and centralisation to get more efficiencies out of the IT assets the company already has and the investments it has already made. “That’s my first big trend. Second is how to integrate all these disparate and separate technologies. One trend I am driving at Nortel is unified messaging, handling voice, text and fax in one mailbox, so it can be retrieved by any device. Moving between applications causes inefficiencies – I call it business latency.”

His ambition is to combine a single log-on with authentication, so that if an individual was on the road and logged on, and another individual in the company wanted to share information with them, the system would indicate he or she was travelling and therefore available only by SMS but that they had the time to discuss that particular issue. “But we’re not there yet,” Mr Bandrowczak says.

RM, the supplier of IT to UK schools, places collaboration and mobility at the top of its list. Chris Clements, the CIO comments: “Our vision for collaboration goes beyond our employees and includes our customers. We have a large candidate list of opportunities to add value to our core systems by providing tools that will enable customers directly to influence product development and enable them to do business at any time of the school day that is convenient to them. One of the biggest challenges is to evaluate Web 2.0 opportunities and select those which will add real value to the business.”

And the green agenda? A study by Symantec (see “Vendors’ View”, Page 4) suggests organisations are not yet successfully rolling out green centres.

But the bandwagon is on the move. The consultancy Quocirca thinks companies will finally make better use of advanced communications capabilities such as web 2.0 and videoconferencing to reduce travel. But it concludes a little wearily that style will defeat substance in some cases. “There will still be those who want to be seen to be green but who do not really take the issue on board and resort to half measures such as carbon off-setting.”

One thing all those questioned agreed on, however, was that it is going to be an interesting year.

CIO priorities, based on Alan Cane’s informal straw poll:

1 Business alignment and strategy
2 Hiring and retaining the best staff
3 IT innovation/new methodologies
4 Security
5 Collaboration technologies
6 Controlling costs
7 Compliance and regulation
8 Virtualisation
9 Customer service
10 Mobility (Green issues came 11th)
Copyright The Financial Times Limited 2007

Friday, December 07, 2007

Die neuen Idiotae Web 0.0 - Computer - sueddeutsche.de

Die neuen Idiotae Web 0.0 - Computer - sueddeutsche.de

Das Internet verkommt zu einem Debattierklub von Anonymen, Ahnungslosen und Denunzianten. Ein Plädoyer für eine Wissensgesellschaft mit Verantwortung.
Von Bernd Graff

Seit fast einem halben Jahrzehnt gibt es das "partizipative Web". Das klingt nach Leistungskurs, meint aber neue Formen der Beteiligung und der Berichterstattung im Internet. Diese Formen werden von engagierten Zeitgenossen genutzt, weil sie - sei es aus Idealismus, sei es, weil sie sonst keine Beschäftigung haben - eine Rolle in der allgemeinen Informationsbildung übernehmen wollen. Man spricht auch schon von "Bürger-Reportern" und "Graswurzeljournalisten".

Eine Art: Vierte Digitalgewalt? Schlaue Menschen werden darauf hinweisen, dass das Internet immer schon ein Beteiligungsnetz war, und dass die Ansätze zu dieser Berichterstattung wesentlich älter sind als fünf Jahre. Leider nun sind jene Schlauen, die wir aus unserem gut gewärmten Mainstreammedia-Bett heraus und hinein in ihr debattenknisterndes Web grüßen: das Problem.

Wednesday, December 05, 2007

Alfresco setzt Maßstäbe für Open Source Social Computing

Alfresco setzt Maßstäbe für Open Source Social Computing

Alfresco präsentiert erste Open Source Social Computing-Plattform für Enterprise-Anwendungen

Alfresco Software, Anbieter von Open Source Enterprise Content Management (ECM)-Lösungen, präsentiert die erste Open Source Social Computing-Plattform für Enterprise-Anwendungen. Die neue Lösung integriert die beliebte ECM-Software von Alfresco mit führenden Web 2.0-Tools und Services wie Facebook, iGoogle, Adobe Flex, MediaWiki, TypePad und WordPress.

Alfresco setzt Maßstäbe für Open Source Social Computing

Alfresco setzt Maßstäbe für Open Source Social Computing

Alfresco präsentiert erste Open Source Social Computing-Plattform für Enterprise-Anwendungen

Alfresco Software, Anbieter von Open Source Enterprise Content Management (ECM)-Lösungen, präsentiert die erste Open Source Social Computing-Plattform für Enterprise-Anwendungen. Die neue Lösung integriert die beliebte ECM-Software von Alfresco mit führenden Web 2.0-Tools und Services wie Facebook, iGoogle, Adobe Flex, MediaWiki, TypePad und WordPress.

Diese erweiterte Version der Alfresco ECM-Plattform stellt benutzerfreundliche Tools für die Entwicklung der nächsten Generation von Rich Internet Applications (RIAs), für Mash-Up und Präsentation von internem und externem Content und für die Integration von Social Networking in die Arbeitsumgebung zur Verfügung. Dabei kann sich der Anwender einer Reihe erstklassiger Open Source-Tools bedienen und damit die Sicherheit und Kontrolle auf Enterprise-Ebene sicherstellen.

FT.com / Technology - Security Matters: Identity theft is all too easy

FT.com / Technology - Security Matters: Identity theft is all too easy

Security Matters: Identity theft is all too easy
By Ken Munro

Published: December 5 2007 04:40 | Last updated: December 5 2007 04:40

Talking to Peter Whitehead, the Digital Business editor recently, I started ranting about social networking as a means of identity theft. He challenged me to prove my point, confident that his real identity would prove hard to crack.

For the purposes of the challenge, I was armed only with his name and occupation, a laptop and a broadband internet connection. Within three hours I had discovered his full name, date of birth, address, home telephone number, route taken to work, the schools and universities he attended, his career history and his long-harboured passion for rock music, golf and tennis.

Perhaps more worryingly I was also able to find out his daughters’ names, ages, dates of birth, the schools they attend, names and pictures of their friends, along with personal information on his wife and other family members.

I began by searching Peter’s own articles. A quick search of FT.com identified an extensive list, including some he had authored in a travel writing capacity. Reading these quickly established he has two daughters, their names, ages and a family interest in winter sports.

He also helpfully described his route into work – from the fact that he commutes into London via train to the same station every day right down to some of the buildings he passes on the way into the office.

It is, of course, true that only a small number of people are likely to have such information published in the media. But millions do so through social networking sites and blogs. Hence my next stop – Facebook, MySpace, etc.

To my disappointment, the target was not accessible on any of the currently popular social networking sites. But a search of Friends Reunited was more successful. There I learned he is married, the town and county where he lives, the schools and university he attended, along with dates he attended them (and therefore his likely year of birth) and publications he worked on prior to joining the FT.

Armed with this information, a few searches on 192.com yielded his full address, home telephone number and the full data from his daughters’ birth certificates including their dates and places of birth.

But it was only the results of a five-mile charity run that allowed me to make the link between Peter and his wife. Also a journalist, she writes under her maiden name but gives away no personal details in her writing.

A travel article on skiing by Peter yielded the fact that one of his daughters uses a shortened version of her full name. I was then able to go back to the social networking sites. A well-populated profile existed on one site which provided the school she attends, her friends’ names and photos and identified a couple of likely cousins.

Her mother and sister, however, proved much more elusive, neither apparently having succumbed to the lure of virtual socialising.

It is scary stuff for three hours’ surfing but what could you do with this information? I used only the tools any other person with a passing interest in genealogy or a curious streak would be aware of and would have access to and spent only the time I could assign in between running a business.

An attacker with malicious intent towards our target would have both time and a wide range of internet sites on the fringes of legality at their disposal which would, for example, very quickly and easily yield a date of birth and banking history. Or they could simply have hung around his house and raided his bins for non-shredded correspondence (even the day his bins are emptied is available on his local council’s website).

I did not find out bank account details, but I could have paid for and downloaded Peter’s credit report from a credit reference agency (this is unlawful, so I did not pursue this avenue, but a fraudster would have no such qualms). I could then open a bank account, take out a loan or mortgage using a correspondence address to cover my tracks and keep extending the credit for years. Or this information could be used to set up bogus social networking sites to incite others to disclose information.

These same methods can also be used to target businesses. By researching a senior executive using the techniques outlined above, an attack could crack system passwords more easily, gaining access to invaluable corporate data.

Passwords continue to be typically comprised of hobbies, loved ones’ names and dates of birth. Targeting a person in a specific role with a specific level of seniority is a fantastically efficient way of ensuring a good return on investment for an attacker.

It is not just individuals who are at risk. Organisations face industrial espionage or confidential information leaks and those responsible – from employees to suppliers to customers – may not even realise they are doing it. Management is often unaware of the risk. The main concern is over-use of the internet and the impact of social networking on productivity, rather than the security risk it poses.

Sensitive corporate information concerning security arrangements or impending merger or acquisition activity is frequently disclosed on blogs or social networking sites. If someone is targeting a specific organisation – for example for potential information to guide stock market decisions – they can decode references to long hours, management changes, upcoming restructures.

Similarly, any organisation involved in industrial action or complex employee or commercial litigation cases is at risk. Indeed, we consider this such a threat that we advise businesses on how to carry out a social networking audit in order to determine just how much information has already leaked.

Just as there are multiple motives for wanting to access information, there are infinite ways of extracting it if someone wants it badly enough. Much of what’s valuable is out there already, free.

Ken Munro is chief executive of SecureTest
Copyright The Financial Times Limited 2007