US A $3.5 Billion Startup Exposed Hospital's Data Without Permission

06:35  20 april  2017
06:35  20 april  2017 Source:   The Wall Street Journal.

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  A $3.5 Billion Startup Exposed Hospital's Data Without Permission © Jeff Chiu/Associated Press For years, cybersecurity startup Tanium Inc. pitched its software by showing it working in the network of a hospital it said was a client, according to people familiar with the matter and videos of the demonstrations. That and other efforts helped the company grow quickly, notching a valuation of $3.5 billion and a big investment from Andreessen Horowitz, one of Silicon Valley’s most prominent venture firms.

But Tanium never had permission to present the demos, the hospital said, meaning a company selling security actually was giving outsiders an unauthorized look at information from inside its customer’s system.

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Google Makes Nevada Land Grab for Data Center. Property Report. Presentations by firm, which has notched $ 3 . 5 billion valuation, exposed private network information, server and computer names. But Tanium never had permission to present the demos, the hospital said, meaning a company

Tanium sells software that rapidly maps computer networks and diagnoses companies’ vulnerabilities. To drive sales, co-founder and Chief Executive Orion Hindawi designed a presentation that he said showed his company’s software running inside a client. The system in the demo belonged to El Camino Hospital, a nonprofit community hospital based in Santa Clara County, Calif. He and his staff gave the presentation hundreds of times, from at least as early as 2012 through mid-2015, according to people familiar with the matter and three demonstration videos posted online by Tanium and its resellers.

“The hospital did not authorize desktop management data or other information to be used in any product demonstration and was not previously aware of these demonstrations or videos,” El Camino Hospital said in a response to inquiries by The Wall Street Journal. “We are dismayed to learn that desktop and server management information was shared. We are thoroughly investigating this matter and take our responsibility to maintain the integrity of our systems very seriously.” The hospital said Tanium didn’t have access to any patient information, and said, “based on our review to date, patient information remains secure.”

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People familiar with the matter said Tanium’s software was installed on El Camino Hospital’s network around 2010 by Allscripts Healthcare Solutions Inc., which then managed the hospital’s systems. A person familiar with the matter said Tanium no longer has a relationship with the hospital. Details of the past relationship are unclear.

In response to Journal inquiries about El Camino Hospital, Tanium said, “In the early days of our company, Tanium periodically demoed our product using a live customer environment, to which the customer had provided us remote access.” Tanium said it attempted to hide the customer’s name and sensitive data, “but we recognize that we did not go far enough to ensure that particular customer’s operational information was sufficiently anonymized.” The company added that it doesn’t believe any data it showed put its customer at risk, but “we apologize for any concern that has caused.”

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The three demonstration videos that had been posted online were removed this week after the Journal’s inquiries.

An Allscripts spokeswoman said her company “did not grant Tanium permission to use El Camino Hospital’s data for customer demos.” El Camino Hospital didn’t respond to a question about what type of authorization Mr. Hindawi might have had.

Mr. Hindawi didn’t respond to a direct request for comment. Late Wednesday, after this story was first published, he issued a statement on Tanium’s blog saying “we take responsibility for mistakes in the use of this particular customer’s demo environment. We should have done better anonymizing that customer’s data.”

Andreessen Horowitz, which poured around $150 million into the company in 2014 and 2015, declined to comment.

Tanium is the latest highflying tech startup to be discovered pushing the envelope to speed growth, in a Silicon Valley environment where aggressive tactics often are seen as essential to success. Health-benefits broker Zenefits last year said that its co-founder had written software to complete an insurance-license qualification course in less time than was permitted. He later resigned under pressure, and Zenefits has since cut its staff by two-thirds and its valuation by half. Andreessen is also among the biggest investors in Zenefits.

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Tanium has amassed a roster of blue-chip clients, but it also has confronted challenges lately. At least 10 senior executives have left or been fired since the summer. Some current and former employees have said that Mr. Hindawi bullies employees—such as by humiliating them in front of colleagues—and that, to lower compensation costs, he has targeted some for termination just before their stock compensation vested, according to people familiar with the complaints. Bloomberg reported those complaints earlier.

In his blog post, Mr. Hindawi denied the company has a toxic culture. “We do not belittle each other at work, and it is completely untrue that we fire people to save a few shares of stock,” he said.

“We work incredibly hard and hold ourselves to high ethical and performance standards,” a Tanium spokesman told the Journal this week. He said a company investigation had found that “data confirmed that there is no pattern or practice of terminating employees based on their vesting cliff date.”

Mr. Hindawi, 37 years old, co-founded Tanium in 2007 with his father. Tanium’s software helps companies map their networks much faster than previously possible, telling the companies every computer that needs to have its antivirus software updated, for instance, or requires the latest Microsoft Windows patch to be installed.

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The Tanium demonstrations exposed El Camino Hospital’s private network information, including security vulnerabilities, server and computer names, versions of antivirus software that might be out of date and some personnel information, according to the videos. Companies generally guard such information closely, as someone seeing it could use it to help gain access to the network for malicious purposes.

In one demonstration, captured in a video posted in 2012 on YouTube by a reseller, Mr. Hindawi says he is going to show how Tanium works on a live computer system. “They allow us to demonstrate Tanium in that environment and work through some of the use cases that drive adoption of this tool,” he says in the video.

Another video, posted in 2014, identified users who were logged in to specific computers at El Camino Hospital.

The demonstrations stopped in mid-2015, according to people familiar with the matter, when Tanium staff suddenly were unable to log in, and Mr. Hindawi couldn’t restore access as he had been able to before, one of the people said. The CEO then instructed employees to stop trying to log into the hospital’s network, and Tanium offered a bonus to staff to find a customer willing to give the company permission to demo its system, the person said.

Tanium’s statement said that it can’t access customers’ systems without permission and that therefore “under no circumstances today can Tanium utilize a customer’s installation to collect data from their systems or users without explicit customer permission and interaction.”

Write to Rolfe Winkler at rolfe.winkler@wsj.com

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