Of course this isn't true. There was no need to panic before. And now there's really no need to panic, because the Massachussetts legislature may be watering the law down much further. A proposed state senate bill, SB 173, takes almost all the umphhh out of the original legislation:
- it removes the encryption requirement in favor of technological neutrality
- it defers to (much weaker) federal law when relevant
- it basically give a free pass to smaller companies
I don't know what the status of this bill is, although it seems like there is a general consensus that the original law will be watered down one way or the other.
So if you just went out and bought a bunch of fancy encryption gear or log readers or other stuff, you might want to check the return policy. Those might be great things to have, but they are probably totally irrelevant to being in compliance with state and federal laws. There is this bizarre consensus that spending money is more important than re-engineering processes in securing data, when in fact the exact opposite is true.
In case you missed this, let me say it one more time - there is absolutely no need to buy anything as a result of the Massachussetts legislation. Not for big companies. Definitely not for small or medium sized companies. In fact for companies with limited staff buying stuff will probably do more harm than good. You would be much better off locking down the configurations and enabling security features on your existing big vendor stuff (your AD, Exchange Server, Oracle, and the like) than starting to learn how to use new toys.
This isn't supposed to be a rant against security vendors. But there has been a great deal of misinformation (to put it diplomatically) surrounding these regulations. The you-should-buy-productX-because-of-the-new-Massachussetts-data-law argument was absurd to begin with and is even more absurd now that the legislation is on life-support.
The problem in the security space is that there is no real counter voice to the fallacy that you can or should buy compliance. The vendors have an obvious interest in hyping the laws. The analysts stoke the fire. Technical security types can't be bothered to read through a bunch of regulations and so they reluctantly drink the vendor Kool Aid. And everybody else doesn't care because information security legislation - with all due respect to our industry - is among the least important issues being discussed in the United States right now.
Security and the Small Business
There's one part of data security legislation that I find a bit perplexing - the small business exemption. This basically says that any security measures you need to take are only relative to the size and complexity of your business. It is a central part of the Massachussetts legislation as well as most other similar regs I have seen.
Now I get that small businesses require protection from overbearing regulations and legislation. But you can't run a nuclear power plant with a team of 10 people (well, at least I hope there's no out there running a nuclear power plan with just 10 people). Is there a minimum number of people you need to provide adequate data security?
The answer is probably not, as long as you have outsourced both your operations and their security. Really huge famous companies can be shockingly small. In one of the articles about the Craigslist/South Carolina AG feud going on these days there's one detail that really jumped out at me. Craigslist has only 30 employees. To me it's mindblowing that a company with one of the most popular websites in the world and one of the world's leading brands is run by less people than were in my subway car this morning. Yet I haven't heard any one argue that Craigslist is unable to provide sufficient security, or that they should be given a break - or need to be given a break - on their data security.
But not every company is Craigslist. To securely operate a vast complex database with a lot of personal information either requires a lot of money or a minimum number of people. Most small businesses don't have the money and will always be under enormous operational pressure to dedicate staff away from security.