Zero-Day Vulnerabilities in Third-Party Software: The Supply Chain Time Bomb ⏰

Understanding the Silent Threat Lurking in Your Software Supply Chain

In May 2023, cybersecurity teams worldwide faced their worst nightmare: a vulnerability that no one knew existed was already being exploited at massive scale. The MOVEit Transfer breach compromised over 2,700 organizations and exposed the personal data of approximately 93.3 million individuals, all through a single unknown flaw in widely-used file transfer software. This incident wasn’t just another data breach—it was a stark reminder of how zero-day vulnerabilities in third-party software have become one of the most dangerous threats to modern cybersecurity.

Zero-day vulnerabilities represent security flaws that vendors don’t yet know about, giving defenders literally zero days to prepare or patch before attackers strike. When these vulnerabilities exist in popular third-party software, the impact cascades across entire industries, turning trusted tools into weapons of mass digital destruction.

What Makes Zero-Day Vulnerabilities So Devastating?

Zero-day vulnerabilities are uniquely dangerous because they exploit the fundamental trust organizations place in their software vendors. Unlike other exploits, zero-day attacks don’t rely on outdated systems or stolen passwords—they use unknown flaws, giving attackers several distinct advantages. These attacks can bypass traditional defenses like firewalls and antivirus tools because security systems have no signatures or patterns to detect them.

The term “zero-day” originated from pirated software circles but has evolved to describe the critical window between vulnerability discovery and patch deployment. During this period, organizations remain completely exposed, often without even knowing an attack surface exists. According to research by RAND Corporation, zero-day exploits remain usable for 6.9 years on average, although those purchased from a third party only remain usable for 1.4 years on average.

The Lifecycle of a Zero-Day Attack

Understanding how zero-day attacks unfold reveals why they’re so difficult to combat:

Vulnerability Introduction: During software development, a flaw is unknowingly coded into the program
Discovery: A malicious actor, researcher, or automated tool identifies the vulnerability
Exploit Development: Attackers create code to weaponize the vulnerability
Silent Exploitation: Attacks commence before the vendor becomes aware
Public Disclosure: The vulnerability finally becomes known to defenders
Patch Development: Vendors scramble to create and test fixes
Patch Deployment: Organizations apply updates, though many lag dangerously behind

The most critical period occurs between discovery and disclosure. Hackers can often develop exploits faster than security teams can develop patches, with exploits usually available within 14 days of disclosing a vulnerability. However, once zero-day attacks begin, vendors typically respond rapidly, often releasing patches within days.

The MOVEit Transfer Catastrophe: A Case Study in Supply Chain Devastation

The MOVEit Transfer breach stands as one of the most significant supply chain attacks in history, demonstrating how a single zero-day vulnerability can trigger a domino effect of unprecedented scale. On May 27, 2023, the notorious Russian-speaking cybercrime syndicate Cl0p began exploiting a SQL injection zero-day vulnerability in MOVEit software, with evidence suggesting they had been testing the vulnerability and access to MOVEit databases since July 2021.

The Attack Mechanism

MOVEit Transfer, a managed file transfer solution developed by Progress Software’s subsidiary, is used across industries for securely transmitting sensitive data. The vulnerability enabled attackers to exploit public-facing servers via SQL injection, with internet-facing MOVEit Transfer web applications infected with a web shell named LEMURLOOT, which was then used to steal data from underlying databases.

What made this attack particularly insidious was the attackers’ preparation and the software’s widespread deployment. Within just a few days of the first exploitation on May 27, 2023, thousands of organizations were compromised worldwide, with CISA estimating that more than 3,000 US entities and 8,000 globally were affected.

The Ripple Effect: Supply Chain Amplification

The true devastation of the MOVEit breach emerged from its supply chain nature. Colorado State University’s data was exposed six times by six different vendors, despite not directly using the MOVEit tool itself. This multiplication factor transformed a single vulnerability into a global crisis affecting sectors from healthcare and finance to government and education.

MOVEit zero-day exploits directly compromised at least 100 customers, but when considering downstream repercussions, organizations like PBI’s exploited MOVEit environment ultimately compromised at least 354 additional organizations. The attack created a “hydra-headed breach” where one organization’s compromise led to dozens or even hundreds of secondary victims.

The Financial and Human Cost

The economic impact of the MOVEit breach remains staggering and continues to evolve. According to IBM data suggesting data breaches cost an average of $165 USD per record, the potential cost of the MOVEit incident could exceed $15.8 billion. Beyond direct financial losses, organizations face ongoing expenses for credit monitoring, litigation, regulatory fines, and remediation efforts that extend years beyond the initial breach.

In one example, Wisconsin Physicians Service discovered in May 2024—a full year after the initial patch—that Cl0p had exfiltrated files containing names, Social Security numbers, dates of birth, and Medicare Beneficiary Identifiers of nearly 947,000 individuals. This delayed discovery highlights how zero-day attacks can have lasting consequences that emerge long after the initial incident.

The Rising Tide: Zero-Day Exploitation Trends

The MOVEit attack wasn’t an isolated incident but part of a disturbing trend. In 2023, the Identity Theft Resource Center recorded zero-day attacks increasing dramatically from just eight in 2022 to 110 in 2023, representing a fundamental shift in the threat landscape. This exponential growth reflects attackers’ increasing sophistication and the expanding attack surface created by complex software supply chains.

Why Zero-Days Are Exploding in Frequency

Several factors drive the surge in zero-day exploitation:

Increasing Software Complexity: Company networks have grown more complex, with organizations relying on a mix of cloud and on-premises apps, company-owned and employee-owned devices, and IoT and OT devices. Each additional component introduces potential vulnerabilities that attackers can discover and exploit.

Open Source Dependencies: Modern software relies heavily on open-source components. Over 80% of almost all code bases contain at least one third-party component, which is great for development efficiency, but these components are available for anyone to access and exhaustively test in controlled environments, opening doors for more zero-day attacks.

Organized Criminal Evolution: Ransomware groups have evolved from opportunistic attackers to sophisticated organizations specifically targeting zero-day vulnerabilities. The Cl0p ransomware gang, active since at least 2019, has repeatedly exploited zero-day vulnerabilities in managed file transfer platforms, including Accellion’s File Transfer Appliance in 2020-2021 and Fortra’s GoAnywhere MFT in 2023.

Target Selection: Why MFT and Supply Chain Tools?

Attackers increasingly target managed file transfer solutions and other supply chain infrastructure for strategic reasons. These tools sit at critical junctions in business operations, handling sensitive data flows between organizations. In 2024, two critical authentication bypass flaws were found in Cleo file transfer software, sparking fears that a new wave of exploitation was coming, especially because ransomware groups targeted MFT products before.

In 2024, the ransomware group Cl0p was responsible for 41.5% of attributed third-party compromises due to its exploitation of zero-day vulnerabilities, demonstrating how effectively these attacks achieve widespread impact compared to traditional targeted approaches.

Beyond MOVEit: Recent Supply Chain Zero-Day Attacks

The threat landscape extends far beyond a single incident. Recent years have witnessed multiple devastating supply chain attacks:

VeraCore Warehouse Management System (2020-2024)

The XE Group used VeraCore vulnerabilities—exploited as far back as 2020—to compromise manufacturing and distribution sector supply chains, with cybercriminals maintaining access to one victim organization for more than four years. This incident reveals how zero-day vulnerabilities can provide long-term access that attackers monetize repeatedly over years.

CI/CD Pipeline Targeting

Attackers seek vulnerabilities in CI/CD tools because they not only provide entry points into corporate networks if left exposed to the internet, but also raise the potential to compromise software development pipelines leading to software supply chain attacks. This represents a shift toward attacking the software creation process itself, potentially compromising thousands of downstream users.

The Acceleration Pattern

In 2024, attacks on the software supply chain occurred at a rate of at least one every two days, with U.S. companies and IT providers accounting for one-third of all software supply chain attacks. The frequency and sophistication of these attacks demonstrate that supply chain exploitation has become a primary attack vector rather than an occasional occurrence.

Why Third-Party Software Creates a Perfect Storm

Third-party software vulnerabilities create unique challenges that amplify their danger:

Trust as a Weakness

Organizations trust third-party vendors to handle critical operations, from file transfers to authentication. This trust creates a blindspot where security teams assume vendors maintain adequate security practices. If organizations have hardened systems that attackers ultimately target, but a supplier is easier to penetrate, supply chain attacks become more appealing to attackers.

Limited Visibility

Most organizations lack comprehensive visibility into their vendors’ security postures. They can’t monitor for suspicious activity in third-party systems until a breach notification arrives—often weeks or months after exploitation began. The MOVEit breach exemplified this, with many organizations only learning they were compromised when Cl0p published victim lists on dark web leak sites.

Update Dependencies

Even when vendors release patches quickly, organizations must wait for updates and then deploy them across complex environments. This creates extended vulnerability windows where systems remain exposed despite patches existing. Progress Software issued patches for multiple vulnerabilities between May 31 and July 6, 2023, but the time between discovery and mitigation varied greatly, depending on factors such as the complexity of the vulnerability and organizational responsiveness.

Multiplication of Impact

Supply chain attacks leverage the multiplicative nature of vendor relationships. A single compromised vendor can expose dozens or hundreds of client organizations, who may each have their own clients and partners. This creates cascading exposure that’s nearly impossible to fully map or contain once exploitation begins.

The Economic and Strategic Implications

Zero-day supply chain attacks carry implications far beyond individual breaches:

Market for Exploits

A thriving black market exists for zero-day vulnerabilities. Remote zero-click exploits fetch the highest prices, while those requiring local device access are much cheaper, with vulnerabilities in widely used software commanding premium prices. This commodification incentivizes continuous vulnerability research by malicious actors.

Nation-State Involvement

Zero-day vulnerabilities serve strategic interests beyond financial crime. Nation-state actors and sophisticated criminal groups continue to leverage zero-day vulnerabilities because they consistently deliver results, with groups like Volt Typhoon and Salt Typhoon specifically targeting operational technology systems through unpatched vulnerabilities.

Insurance and Liability

The massive costs associated with supply chain breaches are reshaping cybersecurity insurance markets. Insurers increasingly scrutinize vendor risk management practices and may exclude coverage for supply chain incidents if organizations fail to demonstrate adequate due diligence.

Detection and Defense: Fighting an Invisible Enemy

Defending against zero-day vulnerabilities in third-party software requires fundamentally different approaches than traditional security:

Behavioral Analysis Over Signatures

Since zero-day exploits have no known signatures, detection must rely on identifying anomalous behavior. Modern security solutions use machine learning and behavioral analysis to spot activities that deviate from normal patterns, potentially identifying zero-day exploitation before widespread damage occurs.

Supply Chain Visibility

Organizations must extend monitoring beyond their own networks into the vendor ecosystem. SecurityScorecard’s Supply Chain Detection and Response (SCDR) solution provides early alerts for vendor environments showing exploitation indicators, enabling faster response to emerging threats.

Rapid Response Protocols

When zero-day vulnerabilities emerge, speed determines impact. Organizations need established procedures for: - Rapidly assessing exposure to announced vulnerabilities - Implementing workarounds when patches aren’t immediately available - Isolating affected systems to prevent lateral movement - Coordinating with vendors and security partners for threat intelligence

Zero Trust Architecture

Implementing zero trust principles reduces zero-day impact by limiting what compromised systems can access. Even if attackers exploit a vulnerability, strong access controls and network segmentation contain damage and provide detection opportunities.

Vendor Risk Management: The First Line of Defense

Preventing supply chain zero-day disasters begins before software deployment:

Rigorous Vendor Assessment

Organizations must evaluate vendors’ security practices comprehensively: - How does the vendor track and manage vulnerabilities? - What are their response capabilities for zero-day incidents? - Do they maintain bug bounty programs? - How quickly have they responded to previous security incidents?

Contractual Security Requirements

Contracts should mandate specific security standards, including notification timelines for vulnerabilities, support for security audits, and clear incident response responsibilities. Service level agreements should address zero-day scenarios explicitly.

Continuous Monitoring

Vendor risk assessment can’t be an annual checkbox exercise. Many organizations mistakenly believe vendor risk assessments are enough, but attackers move faster than annual reviews, requiring zero-day detection that extends into the supply chain in real time.

Lessons from the Frontlines

The MOVEit breach and similar incidents provide crucial lessons:

Early Detection Matters

Progress Software was first informed of suspicious activity in its software environment on May 28, 2023, and by May 31, 2023, identified a previously unknown flaw and quickly notified customers and patched it. However, attackers had already begun exploitation days earlier, demonstrating the critical importance of continuous monitoring.

Multiple Vulnerabilities Are Common

Reviews of the MOVEit code yielded discovery of five more zero-day vulnerabilities that were promptly patched by July 6, 2023. This pattern, where one discovered vulnerability leads to finding others, suggests that thorough security audits following any zero-day discovery are essential.

Data Keeps Circulating

In November 2024, more than a year after the initial MOVEit attacks, data including over 2.8 million employee records from major companies was posted to underground forums by actors who weren’t part of the original attack but obtained the stolen information. Zero-day breaches have lasting consequences as stolen data continues circulating through criminal ecosystems.

The Path Forward: Building Resilience

Addressing the zero-day supply chain threat requires industry-wide transformation:

Software Supply Chain Transparency

Implementing Software Bills of Materials (SBOMs) provides visibility into software components and dependencies. When vulnerabilities emerge, organizations can quickly identify affected systems rather than scrambling to determine exposure.

Secure Development Practices

The Ivanti exploits and other critical vulnerabilities throughout 2024 reinforce the need for secure coding practices and security solutions that eliminate attackers’ ability to exploit software flaws. Vendors must prioritize security throughout development cycles, not as an afterthought.

Information Sharing

Rapid threat intelligence sharing between vendors, security researchers, and end users can dramatically reduce exposure windows. When one organization detects zero-day exploitation, immediately notifying others using the same software enables defensive actions before widespread compromise.

Regulatory Pressure

Emerging regulations worldwide increasingly hold software vendors accountable for security vulnerabilities. This creates market incentives for better security practices and more transparent vulnerability disclosure.

Conclusion: Preparing for an Ongoing Threat

Zero-day vulnerabilities in third-party software represent an enduring challenge that won’t disappear. For the second time in three years, there was an increase in mass compromise events, with more than half of new widespread threat CVEs through the beginning of 2024 exploited before vendors had any chance to implement fixes. This trend shows no signs of reversing.

The MOVEit Transfer breach demonstrated that widely-used software can harbor catastrophic vulnerabilities waiting to be discovered and exploited. With 75 zero-day vulnerabilities exploited in the wild in 2024 alone, and 44% targeting enterprise systems, organizations must accept that zero-day exploitation is now a routine threat requiring constant vigilance.

Success in this environment demands moving beyond traditional perimeter security toward comprehensive defense-in-depth strategies. Organizations must assume breaches will occur, focus on rapid detection and containment, and build resilience through vendor management, continuous monitoring, and incident response capabilities.

The supply chain time bomb keeps ticking. The question isn’t whether another major zero-day attack will occur, but when—and whether your organization will be prepared to weather the blast when it does. By understanding the threat, implementing robust vendor risk management, maintaining vigilant monitoring, and fostering rapid response capabilities, organizations can significantly reduce their exposure to these devastating attacks that exploit the very tools we’ve come to depend upon.

Note: This article was researched and written in November 2025, reflecting the most current information available on zero-day vulnerabilities and supply chain security threats.