The context you're missing here is the company/research-team that found this are ex-MS employees who started a company (Wiz.io) to help other companies secure their cloud hosting/environments. This is some of the most pure-gold viral content marketing they can dream of, they don't care about the $40k at all, its just to acknowledge this is non-trivial.

The context you're missing is it doesn't matter. Next person to discover a similar vulnerability in Azure will have a choice:

1. Disclose to Microsoft for $40k

2. Disclose to an intelligence agency for several times that

3. Disclose to criminals for several times that, in turn

The incentives are now publicly known to be misaligned, and as a potential Azure customer, I have to contend with the simple reality that a significant number of vulnerabilities will be exploited rather than reported.

$40k doesn't even come close to covering engineer time here. This should be a $1M payout.

Options 2 and 3 pose a moral and physical risk. Money isn't the only factor.

If companies have to outcompete criminals and intelligence agencies in the open market there will be no bug bounties, we'll just go back to the old way of doing things.

The reality is that if an organization is using a managed database and doesn't have service-provider vulnerabilities as part of their threat model, they are naive and arguably negligent.

Mid-range engineer at big tech makes $350k / year. I think having a vulnerability like this go to Microsoft instead of criminals is easily worth a few engineer-years. A $1M payout is just not unreasonable or even difficult for a $2.5T corporation.

My point isn't that $40K is enough or $1M is too much, it's that pinning public payouts to the grey/black market is unsustainable. This bug could easily be worth $10M in the right hands, so why stop at 7 figures?

Well, my experience is that grey/black markets and crime pop up virtually everywhere where people can't afford to make an honest living which covers food and housing.

Once you reach a certain bar, people do the right thing.

$40k isn't enough to cover the cost of research+reporting at livable salaries, let along overhead, fake starts, etc.

1) Microsoft could afford $10M

2) I think people would be honest well short of $10M

3) The cost to customers, if this went public, would be far more than $10M.

You want people to be able to make an honest living on security research, or otherwise, the only people looking for vulnerabilities, aside from the independently wealthy hobbyists, will be crooks.

You think Microsoft can't pay $10 million? Paying $40k means they don't give a shit about their customers.

1. Work at Microsoft. Make a bug. 2. Tell your "security researcher" buddy. 3. Split $10m in zcash.

Since you are already being a criminal, you could go all the way and sell it to a security agency, Zerodium or another criminal.

The company you work for, once they track the code back to you, will investigate you to make sure you did not make profit on it.

Thats why many doing that kind of stuff probably use a third party that keep money for a definite amount of time.

Would you pay 100x as much for a service that is protected by that level of award?

The reason you pay so little is to not encourage ppl to even start looking.

Knowledge required to find stuff like that is very scarse. And you have to know where to look for.

Chances to find something really big are so small that its not worth it to look for them finnancially.

Thats why ppl don’t do that often. They do it if they have long cooperation history with given company because they are treated as an employee.

TL;DR is that you don’t want to encourage ppl to start looking. All software has bugs, so its only a matter of time until someone finds something.

It does matter that they are ex-employees though. At some point you start to risk employees planting bugs themselves stealthily to claim the bounty later.

if you're only in it for the money i don't think white hat is your calling.

Uh, yeah, maybe, I'm not sure how much this changes things to be honest. I fully agree with grandparent this is $1MM reward territory. (Edit: sibling put it really elegantly, this is pay-with-exposure justification)

PR campaign or not, you don't spit on those kinds of rewards. And it's a bad look on MS to award 40k on one of the worst vulnerabilities to ever hit a cloud provider...

That sounds like paying artists with "exposure".

There is kind of a 2-sided argument here:

1. Small time cheap skate business owners sometimes try to cheat professional artists by "paying with exposure", when they have no meaningful audience or influence and therefore no meaningful exposure to give.

2. Sources that do genuinely have very large audiences and influence can infact give an artist so much exposure that it's worth far more than any reasonable direct payment

This situation seems a lot more like 2 than 1. The company is in the business of helping companies secure their cloud environments, and these articles going around the tech press are being read by hundreds of thousands of people who are generally more interested in cloud security than a random person. They could spend many times the amounts discussed here on advertising and still not get their name in front of that many of the right people in a good context.

Big or small company, I doubt they can pay the employees' salary with "exposure". They might have pratically infinite VC money for now, but that's an orthogonal discussion, just as "exposure" and being fairly compensated are.

edit: and what about it had been a smaller company or individual researcher who wouldn't be able to gain as much from this publicity? Are you saying that Microsoft would have awarded them $ 500k? Because that's not the message sent with this reward. And frankly, even this discussion is kind of off-the-point because I doubt that's what they took into account when defining the money quantity.

Because it is unethical and in most countries illegal :)

But you are right. They should pay them more.

I wouldn’t use it maliciously, but I would honestly think twice about disclosing it. I think that’s especially true for anyone that doesn’t have a way to gain from the publicity.

This seems like a strange calculation... you think the scrutiny from being identified as talented enough to find this is bad enough to not be worth $40k + the reputation bump for your CV?

That seems overly paranoid.

What would you use it for instead? 40k + recognition sounds way better than 0 and sitting on it.

What if you sell to the NSA itself?

Still unethical regards the users in risk. And most likely, still illegal since you were hacking before (i do not know the exact legal situation in the US)

The question is if this wouldn't have been reported what are the chances that this would have been exploited. Or what are the chances that Microsoft got saved from a hack in the wild from this knowing this vulnerability. If we assume that the codebase has one vulnerability for 10k lines, we would still get 10s of thousands of vulnerabilities. Any one of those could cost billion dollar to Microsoft, but patching one of those doesn't make the chance of getting hacked much different.

Yes, the next person will contact someone like https://zerodium.com/program.html instead

well the black market is always going to pay more. that's kinda why criminals tend to go there...

Maybe they have already sold the exploit months ago to everybody that would buy it?