> We are planning to make z/VM Linux production with RACF on VM,
> I would like to know what is best practices for handling
> security under Linux/VM and how other shops handing security
> for Linux.

Since the two environments are fairly cleanly separated, treating them
as two entities; one affiliated with z/OS and one affiliated with the
discrete systems is often the least controversial method. Treat the VM
and Linux components as separate elements. 

The most common solution is to treat the Linux guest systems identically
to the traditional Unix or discrete Intel Linux systems on your network,
as that's exactly what they are. Use of NIS, Kerberos, etc are identical
to the discrete systems for AAA. 

Use of native Kerberos v5 authentication is becoming very popular, and
(if you have SP2 applied to your Windows AD systems), security monitors
and practices integrated with Windows are also common. We typically set
up an internal guest LAN for operational support services like logging
and security access, and ensure that all the guests use it for logging
and maintenance access, or you can do the same things you do with your
distributed systems. 

The VM component can be handled with RACF; the existing version can
share a database with z/OS RACF, and is often handled/audited as an
extension of the z/OS RACF environment. 

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