I have been in pentesting and appsec business for a while. For the last 10 years, I am more or less involved in security assessments of various kinds. I have started as a junior security engineer in a large international firm, where I did my share of scanning and translating the reports. Then I had to leave the infosec industry for a couple of years that I spent in IT audit, but I continued occasional freelancing. After that, I joined a smaller firm where I grew my first pentesting team, then another one. Currently, I run my own company and I can finally focus on building the security assessment practice the way I see it right. One question that I am regularly asked by clients, friends, and colleagues is:

Why do you still do appsec and pentests when Bug Bounties are so much more profitable?

Sometimes I joke about it, sometimes I try to explain, but normally I limit the answer to “bug bounties are overrated”. Simply because it’s true. I will not dig deep into the difference between classic consulting services and security assessments in particular, and the crowdsourced approach implemented by contemporary bug bounty programs. Instead, I will point your attention that both leading bug bounty brokers have lately introduced a new service: the so-called “next generation pentest”. Which in fact is just a pentest, but provided to you by a broker that uses bug hunters as human resources. Of course, we can argue about the differences in methodology that supports the two approaches, but after a few minutes I will most probably convince you that this difference is negligible. What really matters is who does the job.

A few words about the history of the discipline. For many years the pentesting firms were so small, that they were not considered actual market players. Simply because big clients were not the fans of the idea of giving such a sensitive job to a pentest boutique. Instead, they offered contracts to the entities who already had built trust with them: accounting firms, system integrators, and even software vendors. Then, slowly but surely, smaller companies have started to gain trust too: sometimes because of a deeper focus on the subject, sometimes because they were founded by the individuals who had built trustworthy public profiles throughout their carriers. And then bug bounties emerged.

Bug bounties have offered the market the crowdsourced security assessments of unlimited scale. In other words, now “thousands of eyes” could review the security of your software and report issues, while only the first report complete according to the program rules could win the reward. Many customers were quick to jump into the bandwagon that seemed an economically good idea. Pay as you go? Better: pay as you get value! Who in possession of required funds would resist the temptation?

But as it turned out, not every customer was ready for the “thousand eyes” attention. A few did not go through any formal appsec practices prior to posting the bug bounty brief. As a result, a thousand eyes quickly emptied the budget of a program that had not had a couple of eyes looked at its scope first. So the paradigm had to evolve: now the bounties were only good for the “mature” products, that had some in-house appsec. After this and some other improvements, the balance has been found.

The ingenuity of the idea and the trajectory of its success made bug bounties a nice thing to invest in. And the investment capitalism, in short, means that fsck dividents — the growth is all that matters. But the growth has not been as intensive as expected: the market has quickly reached its capacity in both clients and human resources. Not that many customers are declaring bounties now, although many pilot the service in a private mode. Not many bug hunters become professional and dedicated full-time appsec researchers. There are super effective 1%ers on both sides. Apparently, the investors are not OK with “the flow” of operations and revenue that the field has reached. Thus, the rewind to the classic dedicated consulting/pentesting kind of services is being attempted — albeit with a certain facelift. And it will most probably work out, as the bug bounty brokers have the required trust and quality controls out there and are able to deploy trustworthy, background-checked resources. I am not sure that this will allow the brokers to sustain the growth rate that is expected from them, because the next “bug bounty boom” is not necessarily arriving any time soon. But the combination of public and private bounties and classic pentests would secure the flow.

In conclusion, I will sum it all up as I see it. Bounties offered the market the promise that Bitcoin once gave: the elimination of trust from the equation. Bitcoin never made it: not only because now you had to trust Bitcoin itself, but more importantly because people are willing to trust each other and the independent third parties who would enforce rules in case one of them decides to cheat. Neither will bounties make it. Instead, the brokers will have to take trust into account and diversify their offering accordingly.