Key Takeaways:
- Supply chain attacks are growing fast: Attackers target the weakest vendor or provider to gain legitimate access and spread ransomware downstream.
- Common entry points include compromised software updates, APIs, insider threats, and tampered hardware.
- Strong vendor risk management is essential: requires SBOMs, monitor suppliers continuously, and align to frameworks like NIST, ISO 27001, or SOC 2.
- Backups remain the last line of defense: Immutable, air-gapped, and tested backups ensure clean recovery even if attackers infiltrate through a trusted supplier.
- Preparedness matters: Regular incident response drills and tabletop exercises, updated vendor breach playbooks, and expert support (including negotiation readiness) reduce downtime and risk.
- Compliance is pushing action: Regulations like DORA, NIS2, HIPAA, and PCI DSS demand organizations address third-party risks directly.
It’s 2025, and SaaS and other cloud services are predominant. Organizations rely on countless suppliers, vendors, and service providers to deliver critical infrastructure, software, and services. This interconnectedness, while driving efficiency and innovation, has also created a new cyberattack surface that sophisticated threat actors are increasingly exploiting. This new surface is the supply chain.
Why Supply Chain Ransomware attacks are a 2025 Business Emergency
Supply chain attacks have emerged as one of the most insidious and effective attack vectors. Rather than trying to compromise organizations with good security posture, threat actors target the weakest links in the chain of trust that organizations depend upon. They compromise organizations by exploiting vulnerabilities from suppliers, vendors, and service providers.
Industry standards and recent regulations like DORA in the EU also request that organizations must assess and manage cybersecurity risks that are associated with third-party service providers.
How Ransomware Supply Chain or Third-Party Attacks Work?
By compromising a single supplier or vendor, attackers can reach dozens, hundreds, or even thousands of downstream organizations. These attacks grant threat actors something invaluable: Legitimate access. Instead of risking triggering security alerts, threat actors can now walk through the front entrance with valid credentials, trusted software, or legitimate-looking communications. This authorized access provides the perfect cover for conducting espionage, exfiltrating data, deploying ransomware, or establishing persistent footholds for future cyberattacks.
Common Supply Chain Cyberattack Entry Points or Attack Vectors
The most common entry points for these attacks include:
- Compromised software updates: Attackers inject malicious code into legitimate software updates that are distributed by a trusted vendor, which then infects all their clients. There are different tactics, technique, and procedures (TTPs) used to compromise software, from malware and code injection to compromising open-source dependency libraries and the software development process in continuous integration/continuous deployment (CI/CD) pipelines, code repositories, and build tools.
- Misconfigured or unsecured APIs: Misconfigurations and software vulnerabilities in APIs or data transfer applications can be leveraged to gain unauthorized access to an organization’s data or systems.
- Phishing and social engineering: Attackers target employees of third-party vendors with sophisticated phishing campaigns to steal credentials and gain initial access.
- Vulnerable managed service providers (MSPs): MSPs often have privileged access to multiple client networks, making them a high-value target. A breach of an MSP can grant attackers access to all their clients.
- Insider threats: Malicious insiders within the supply chain, whether employees or contractors, can leverage their privileged access to infiltrate and compromise systems and data.
- Compromised hardware components: Hardware supply chain attacks involve the tampering or insertion of malicious components into the production or distribution process of hardware devices.
A trusted service in your supply chain can quickly become the entry point for a major cyberattack, where bad actors could demand a ransom payment to not publish stolen data or decrypt files that stall operations.
Reduce Risk of a Supply Chain Attack: Essential Recommendations
There are several concrete steps organizations can take to drastically reduce their exposure:
1. Continuously vet and monitor your vendors
- Perform rigorous security assessments before onboarding vendors.
- Require third parties to demonstrate cybersecurity controls and frameworks (e.g., NIST, ISO 27001, SOC 2).
- Implement ongoing monitoring of vendor risk, especially those with access to sensitive data or networks.
- Maintain an inventory of third-party applications and components and request software bill of materials (SBOMs) from third-party vendors.
2. Establish a strong backup and recovery posture
- Implement a data resilience strategy with immutable, air-gapped (offline), and frequently tested backups.
- Ensure backup repositories are separated from backup platforms and production environments.
- Back up critical data frequently to minimize data loss.
- Regularly test backup recovery.
- Enforce zero trust principles with strict guidelines for data storage and transfer to prevent unauthorized access.
3. Test and keep your incident response plan up-to-date
- Build a response plan that explicitly includes third-party breach and cyber extortion scenarios. It must address how to respond if a third-party vendor is compromised and how that might affect internal systems.
- Identify critical assets and prioritize for worst case situations. Define a Minimum Viable Business or Minimum Viable Company state to reestablish basic operations.
- Regularly run tabletop exercises with key stakeholders and include scenarios for supply chain and ransomware attacks.
- Define chain of command and responsible individuals to decide on whether to pay or not pay a ransom.
4. Engage third-party experts: Incident response and threat actor negotiation
- Don’t wait for an incident, retain expertise that can provide
- Legal guidance on privacy and cyber insurance
- Digital forensic analysis and evidence preservation
- Cyber extortion readiness and response
- Cyber extortion negotiation
- Cyber extortion settlement and transaction assistance
- Digital forensics and evidence preservation
- Legal and regulatory impact
- While paying a ransom is generally discouraged, sometimes it becomes necessary to restore critical operations or prevent public disclosure of sensitive exfiltrated data. Specialized negotiation firms like Coveware by Veeam provide assistance in a number of areas:
- Communication with threat actors.
- Reduction of demanded ransom amounts.
- Understand the intricacies of cryptocurrency payments and legal compliance related to sanctions.
- Buy crucial time for your internal teams to rebuild and recover.
- Provide a buffer between your organization and the threat actors to reduce emotional decision-making.
- Provide information to support executive and legal decision-making.
- Having pre-established relationships allows for a faster, coordinated response when time matters most.
5. Segment and secure third-party access
- Use zero trust principles to minimize third-party access to internal systems.
- Deploy granular identity and access management and monitor external users and service accounts.
- Apply strong multi-factor authentication (MFA) and audit logging on all third-party interactions.
Compliance and third-party risk
In addition to DORA, there are several global standards, frameworks, and regulations that emphasize third-party risk management. Organizations that follow them are in a better position to protect their data and environments from supply chain attacks.
Standard / Framework / Regulation | Region | Industry | Scope of Third-Party Risk Focus |
| DORA (Digital Operational Resilience Act) | EU | Financial Services | Requires risk assessment, contractual clauses, monitoring, and oversight of ICT third-party providers. |
| NIS2 Directive | EU | Critical Infrastructure | Expands cybersecurity obligations to include supply chain and third-party risk management. |
| GDPR (Article 28) | EU | All (Data Controllers) | Mandates data controllers to ensure processors provide sufficient guarantees for data protection. |
| NIST SP 800-171 / 800-161 / 800-53 | U.S. | Federal / Contractors | Requires controls for managing third-party and supply chain cybersecurity risks. |
| ISO/IEC 27001 & 27036 | International | All | Specifies controls for supplier relationships and information security in the supply chain. |
| SOC 2 (Trust Services Criteria) | U.S. / Global | Technology / SaaS | Includes vendor management as part of security, availability, and confidentiality criteria. |
| FFIEC Guidelines | U.S. | Financial Institutions | Provides detailed guidance on third-party risk management, including due diligence and oversight. |
| HIPAA (Business Associate Agreements) | U.S. | Healthcare | Requires covered entities to manage risks from third-party service providers handling PHI. |
| Basel III / BCBS 239 | Global | Banking | Emphasizes risk data aggregation and third-party risk in operational resilience. |
| PCI DSS (Payment Card Industry Data Security Standard) | Global | Payment Processing | Requires service providers to comply with security standards and be monitored by merchants. |
How Veeam can Help in the Supply Chain
Veeam helps organizations adhere to security frameworks and compliance standards through a comprehensive suite of built-in tools and automation. Built-in governance and compliance features provide visibility, control, and policy enforcement across backup environments.
The Veeam Cyber Secure program enhances resilience with security assessments, framework alignment, recovery warranties, and readiness programs for cyber extortion and incident response. Together, these capabilities empower organizations to proactively meet compliance mandates and strengthen their overall cyber posture.
At the same time, Veeam is continuously investing, innovating, and adding to industry and regulatory credentials to help ensure your data is protected and secure. From compliance controls, policies, and practices to gathering evidence for your risk assessments and assurance requirements, Veeam integrates security and risk management into every step of the business.
With regard to software vulnerabilities in Veeam products, Veeam takes them seriously. We invite the world to help through a public Vulnerability Disclosure Program, where anyone can report issues directly. Veeam is transparent with disclosure of CVEs and corresponding fixes.
Final Thoughts
The digital supply chain is a fundamental component across industries, but it also represents an expanding attack surface for cyberattacks and cyber extortion. Cybersecurity is only as strong as your weakest vendor. Threat actors are well aware of this and increasingly target vendors in the supply chain to sneak past defenses undetected. With a proactive risk management strategy that includes robust backups, rehearsed incident response plans, and expert support, organizations can prevent and reduce the impact of these attacks.
Defend. Detect. Recover.
See how Veeam Data Platform helps you stop threats before they spread, safeguard your backups, and recover fast so your business stays resilient.
FAQs
What is a supply chain ransomware attack?
It’s when attackers compromise a vendor, service provider, or software supplier to infiltrate downstream organizations. By abusing trusted access, like legitimate updates or integrations, they can deploy ransomware, steal data, or disrupt operations.
Why are supply chain ransomware attacks so dangerous?
Unlike direct attacks, these exploit trust. Once inside, attackers often bypass perimeter defenses using valid credentials or trusted software, making detection harder. A single compromise can ripple across hundreds of organizations at once.
How can organizations reduce the risk of supply chain ransomware?
- Vet vendors before onboarding and require compliance with frameworks like NIST, ISO 27001, or SOC 2.
- Monitor supplier risk continuously and request SBOMs.
- Segment third-party access with zero trust principles, RBAC, and MFA.
- Maintain immutable, air-gapped, and tested backups.
- Rehearse incident response with scenarios that include vendor compromise.
- Update incident response plans for ransomware specific actions such as negotiation, settlement and decryption.
Which regulations require third-party risk management?
Regulations, such as the EU’s DORA and NIS2, in the U.S. HIPAA, frameworks like NIST SP 800-171, SOC 2, and global standards like ISO/IEC 27036 all emphasize third-party and supply chain risk management. Compliance increasingly requires proof of vendor oversight and recoverability.