Inside Hack Brings Down Australian IT Security Firm

"Stunned" is how the head of a New Zealand integrator describes the demise of Australian security software distributor Janteknology, which ceased trading after a damaging internal hack.

Kaon Technologies managing director Tony Krzyzewski says he had spoken to Janteknology "on occasions" about possibly working with the now-defunct company.

"They were sort of the Kaon of Australia — they were a close match with us."

At the end of last month Janteknology's Web site was replaced with a note announcing that the company had stopped trading.

"The company has suffered a major internal security breach that, among other things, involved the removal and modification of company records," the statement reads. It goes on to note that "this event has had a devastating impact on the company and compounding the effects of adverse market conditions we have all been dealing with has forced Janteknology to voluntarily cease trading."

Kyzyzewski says the internal hacking incident "hammers home" the need to make sure security within an organisation is looked after.

"They weren't a large organisation and that's the challenge that confronts small businesses."

What happened suggests Janteknology's backup and disaster recovery weren't what they should have been, he says.

"For an organisation to cease trading as a result of the removal and modification of company records, you have to question where the backup and recovery was. Sure, you could lose a day's trading but you should be able to recover the last month."

The note on Janteknology's site says it is "currently in the process of validating and restoring our records in order to clear a number of back orders."

Krzyzewski says he has seen a New Zealand company "come close" to closing as a result of a similarly damaging internal hack. What saved them was having backups of records.

He says the incident also says something about the need to communicate with staff.

"For someone to get that disgruntled means there had to have been a fairly severe breakdown in communications."

Ironically, Janteknology's former managing director, Glenn Miller, is something of a stickler for security. He wrote a letter to Computerworld in 2001 criticising the practice of outsourcing security and stating, among other things, that "in the final analysis, an organisation's management is responsible" for security breaches.

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