Assessing Third-Party Software Risks: A Comprehensive Guide
Third-party software can make building applications easier, but one weak link can let attackers into even the strongest systems.
In December 2020, hackers slipped malicious updates into SolarWinds’ Orion platform, hitting over 18,000 organizations with data breaches and ransomware attacks. A year later, the Log4j vulnerability put millions of systems at risk with just one line of Java code. A 2022 Security Magazine report says software quality issues cost the U.S. economy $2.41 trillion.
This article breaks down the risks of third-party software, explains what to look for, and shares practical steps to keep your systems secure.
Why Third-Party Software Risks Matter
Third-party software, including open-source libraries, commercial packages, and cloud services, is essential to modern applications but introduces significant vulnerabilities. Weaknesses in these components can lead to data breaches, operational disruptions, or regulatory penalties under standards like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). A 2023 Cybersecurity Ventures report noted that supply-chain attacks are a growing threat, with third-party software as a primary attack vector. By proactively managing these risks, businesses can safeguard their systems and maintain trust.
Steps to Assess and Mitigate Risks
1. Map Your Software Ecosystem
You can’t protect what you don’t know about. Start by listing all the software your applications use.
Make a Software Bill of Materials (SBOM) to track everything from open-source libraries to commercial tools and cloud services like APIs or SaaS platforms. Tools like CycloneDX or System Package Data Exchange (SPDX) create clear visuals of how your software connects, including hidden dependencies. Check this list every three months to catch any changes.
Benefit: Helps you see all the software you rely on.
2. Evaluate Risk Factors
Look closely at your software to find risks that could cause trouble.
Examine how often open-source projects are updated and who’s working on them using platforms like GitHub or GitLab. Active projects with many contributors are usually safer. Use the National Vulnerability Database (NVD) to check for known issues and their severity. Make sure software licenses, like General Public License (GPL) or Massachusetts Institute of Technology (MIT), won’t cause legal problems, using tools like FOSSA to verify.
Benefit: Pinpoints risky software so you can act fast.
3. Leverage Automated Scanning Tools
Integrate Software Composition Analysis (SCA) into your continuous integration/continuous deployment (CI/CD) pipeline for early detection.
Use tools like the Open Worldwide Application Security Project (OWASP) Dependency-Check to scan for known vulnerabilities or Snyk for real-time alerts and remediation guidance. Run scans on each pull request via GitHub Actions or Jenkins, adjusting severity thresholds to minimize false positives.
Benefit: Detects issues before they reach production.
4. Conduct Manual Reviews
Manual reviews complement automation for deeper insights.
Verify cryptographic signatures, such as GPG or Secure Hash Algorithms (SHA), for software binaries and updates to prevent tampering. Review open-source project commit histories for suspicious activity, such as unverified contributors or sudden contribution spikes.
Benefit: Uncovers risks that automated tools may miss.
5. Assess Vendor Security
Not all software or cloud services are built with security in mind.
Ask vendors about their security practices using questionnaires like Standardized Information Gathering (SIG) or the Cloud Security Alliance’s Consensus Assessment Initiative Questionnaire (CSA CAIQ), focusing on encryption, incident response, and access controls. Check for certifications like System and Organization Controls (SOC) 2 or information security standard (ISO) 27001, and look for weaknesses, like poor authentication. Review vendors yearly or after any security issues.
Benefit: Makes sure your vendors meet high security standards.
6. Prioritize and Remediate Risks
Not all vulnerabilities are equal. Sort them by how serious they are.
Focus on critical issues with high Common Vulnerability Scoring System (CVSS) scores (above 8.0) in widely used software that hackers already know how to exploit. Tackle moderate issues (CVSS 4.0–7.9) in less critical systems next. Ignore minor issues with no known exploits unless they’re easy to fix. You can patch problems, swap risky software for safer options like Simple Logging Facade for Java (SLF4J) instead of Logging for Java (Log4j), or isolate weak components using network separation or tools like Docker.
Benefit: Saves time by tackling the most dangerous threats first.
7. Implement Continuous Monitoring
Ongoing vigilance is essential to manage dynamic supply chain risks.
Sign up for vendor security alerts and Common Vulnerabilities and Exposure (CVE) updates through tools like Snyk or Black Duck. Use zero-trust principles to check every piece of software regularly. Try AI-powered tools like Synopsys Polaris to spot unusual patterns in software vulnerabilities.
Benefit: Maintains security in an evolving threat landscape.
Risk Assessment Checklist
| Step | Action | Tools/Resources |
|---|---|---|
| Map Ecosystem | Create SBOM, audit quarterly | CycloneDX, SPDX |
| Evaluate Risks | Assess code maturity, vulnerabilities, licenses | GitHub, NVD, FOSSA |
| Automated Scanning | Integrate SCA into CI/CD | OWASP Dependency-Check, Snyk |
| Manual Reviews | Verify signatures, review commit history | GPG, GitHub, GitLab |
| Vendor Assessment | Use SIG, CAIQ, review certifications | SOC2, ISO 27001 |
| Prioritize Risks | Use risk matrix, patch, or isolate | Docker, SLF4J |
| Continuous Monitoring | Subscribe to alerts, apply zero trust | Snyk, Black Duck, Synopsys Polaris |
Final Thoughts
Third-party software can expose your business to serious risks, but you can tackle them with the right steps: map your software, check for vulnerabilities, use automated tools, do manual reviews, review vendors, prioritize fixes, and keep monitoring for threats.
In today’s connected world, cyberattacks are inevitable. Take action now to strengthen your defenses and stay ahead of threats.
