September 10, 2013:
Recent NSA (National Security Agency) leaks confirmed that a lot of the most successful American Internet hacking was not directed at individual PCs but rather at the special computers used to run the Internet. It’s long been feared that most damaging attacks on the Internet don’t need a lot of money or people, just the right information about how these specialized computers work. However, that information is extremely expensive and consists primarily of previously unknown flaws in Internet software, especially software used to run routers and other core elements of the Internet. And it gets worse as an increasing number of vulnerabilities are found in routers, server software, and other aspects of the hardware that runs the Internet. By attacking these systems, rather than PC users, it's more likely that attacks could shut down large sections of the Internet as well as steal any data moving within the Internet. The NSA leaks also revealed that the NSA had, as long suspected, secretly arranged to have access to most encryption systems so that criminals and terrorists (and anyone else) could not communicate free of any chance of government (or non-government) eavesdropping.
Meanwhile, NSA has openly warned of the router vulnerability, which apparently they discovered while exploiting these vulnerabilities to spy on others. The router approach is more efficient in many respects because you can grab everything that passes through a router, which usually handles all Internet traffic for a network. The Internet is basically run by these routers, which business and home users also need to provide Internet access (especially wi-fi) for multiple PCs. But the routers come in many sizes, with very powerful ones used to play traffic cop for thousands of users or hundreds of other routers. The NSA has apparently become quite adept at exploiting routers to capture huge quantities of data from computer networks it seeks information about.
The NSA has been in the forefront of providing security solutions for American government, military, and private networks for decades. For example, the NSA is working with the Department of Defense to increase Internet defenses by putting more of their computer operations in a cloud system and spending a lot more on protecting the cloud from attacks. Cloud computing is a system where data and software are supplied to PCs or laptops via a network connection from a large and well-protected number of servers (PCs customized to provide information on the Internet). Usually, it's via the Internet, but it can be a local, closed (to the Internet) system as well. The main point here is that you can devote all your security resources to the collection of computers that run the cloud. You don't have to worry so much about the users PCs or laptops because everytime they use the cloud, their software (word processor, spreadsheet, whatever) and data is loaded from the cloud. When they save data to the cloud, it is checked for malware (viruses, worms, and other stuff hackers use to infect and take control of your computer).
NSA began, after World War II, as a communications security organization, dedicated largely to creating ciphers to protect American communications, and decoding the ciphers other nations use. Now, the NSA is in the lead developing better network security for the Department of Defense and all American computer networks.
Currently the NSA and Department of Defense have over seven million computers, printers, and other devices connected to 15,000 networks (most of them local), and many of these are also connected to the Internet. The military cannot compete with civilian (especially financial) firms for the best network security people and, as a result, are more vulnerable than any other large organization. The U.S. Department of Defense is the largest organization on the planet and a major target for hackers. By shifting to cloud based Internet security systems, it should make it harder for enemy intruders to get in.
A cloud based system is, in theory, more secure from attack. But in practice, it remains uncertain how much more secure, if at all, the cloud is. What is certain is that the current system of trying to protect individual PCs or local networks is not working out too well.