Virtually Compliant: How Implementing New Technology Can Make Your Company Non-Compliant

Written by Evan Schuman
March 28th, 2008

Guest Columnist David Taylor is president of the PCI Alliance and a former E-Commerce and Security analyst with Gartner.

Virtualization technology has been around for a while, although interest in it has largely been confined to the seriously geeky among us. The primary benefits of virtualization are flexibility and scalability. It allows a company to "pool" computer hardware and create new applications, new servers, new networks, new data storage at the touch of a button and, in the process, reduce costs and administrative overhead.

Standards lag technology: Recently, as we’ve been talking to retailers for the PCI Knowledge Base project, we have heard several reports where retailers found themselves on the wrong side of the PCI Standards because they implemented virtualized servers within their cardholder environment. At issue is PCI security standard 2.2.1, which says that a server is only allowed to have "one primary function."

Essentially, PCI standards do not address the technology of virtualization. In addition, PCI assessors are not currently being given training on how to assess virtualized servers.

We’ve talked with a dozen assessors on our Panel of Experts about it. Some say "a box is a box is a box" – which can greatly increase the scope of your PCI audit if the "box" in question is a mainframe (where virtualization got its start over 30 years ago) or a large Linux or Unix server. Others say that virtualization is a type of compensating control, like network segmentation, and actually helps companies decrease the scope of a PCI audit.

The point is simple: While virtualization can significantly reduce your IT hardware and management costs, it can broaden the scope of a PCI audit and potentially cause you to fail, unless all the applications, databases, access controls and communications functionality on a virtualized server comply with the PCI standards. But, however you use virtualization, you will still have to "prove" that there are sufficient controls in your virtual environment to your assessor.

Time to go PCI assessor shopping: Since there is no official guidance on how to assess virtualized environments, the best recommendation we can make for getting you safely through a PCI assessment is to interview about a half dozen assessors regarding their positions on (and experience with) server virtualization, and do some homework on how to secure virtualized environments.

The bottom line: There is no good reason to avoid deploying virtualized servers and applications in the cardholder environment if you have good documentation of the controls (if you’re doing a self-assessment) or work with an assessor who understands the security controls that are available and how to deploy them effectively. If you want to discuss this column or any other security or compliance issues, please send me an E-mail at or visit to join the PCI Knowledge Base.


2 Comments | Read Virtually Compliant: How Implementing New Technology Can Make Your Company Non-Compliant

  1. Branden Williams Says:

    I’m not sure where this odd interpretation is coming from. Any assessor that has had to deal with a sizeable Level 1 has likely come into contact with virtualization in the form of an LPAR. There is no reason that the same kind of technology could not be used in distributed systems. We regularly see and approve this technology for use in the PCI environment.

    To all the readers of this post, you CAN use virtualization and be PCI compliant!

  2. Dave Taylor Says:

    Based on over 75 hours of interviews with merchants, assessors, banks, processors, I can safely say that the interpretation of server virtualization (specifically 2.2.1, which says “only 1 primary function per server”) is not consistent across the community of companies involved in PCI. I happen to agree that the notion that Virtualization runs contrary to 2.2.1 is “odd” – and that is exactly the point of bringing up the topic. We recently did a Webcast on the topic, and the feedback from the participants was that the webcast helped clear up a very murky area of PCI. If you want to discuss it further, send me an email. Thx, Dave Taylor


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.