Microsoft on Tuesday disclosed the intrusion activity aimed at Indian power grid entities earlier this year likely involved the exploitation of security flaws in a now-discontinued web server called Boa.

The tech behemoth's cybersecurity division said the vulnerable component poses a "supply chain risk that may affect millions of organizations and devices."

The findings build on a prior report published by Recorded Future in April 2022, which delved into a sustained campaign orchestrated by suspected China-linked adversaries to strike critical infrastructure organizations in India.

The cybersecurity firm attributed the attacks to a previously undocumented threat cluster called Threat Activity Group 38. While the Indian government described the attack as unsuccessful "probing attempts," China denied it was behind the campaign.

The connections to China stem from the use of a modular backdoor dubbed ShadowPad, which is known to be shared among several espionage groups that conduct intelligence-gathering missions on behalf of the nation.

Although the exact initial infection vector used to breach the networks remains unknown, the ShadowPad implant was controlled by using a network of compromised internet-facing DVR/IP camera devices.

Microsoft said its own investigation into the attack activity uncovered Boa as a common link, assessing that the intrusions were directed against exposed IoT devices running the web server.

"Despite being discontinued in 2005, the Boa web server continues to be implemented by different vendors across a variety of IoT devices and popular software development kits (SDKs)," the company said.

"Without developers managing the Boa web server, its known vulnerabilities could allow attackers to silently gain access to networks by collecting information from files."

The latest findings once again underscore the supply chain risk arising out of flaws in widely-used network components, which could expose critical infrastructure to breaches via publicly-accessible devices running the vulnerable web server.

Microsoft further said it detected more than one million internet-exposed Boa server components worldwide in a single week, with significant concentrations in India.

The pervasive nature of Boa servers is attributed to the fact that they are integrated into widely-used SDKs, such as those from RealTek, which are then bundled with devices like routers, access points, and repeaters.

The complex nature of the software supply chain means that fixes from an upstream vendor may not trickle down to customers and that unresolved flaws could continue to persist despite firmware updates from downstream manufacturers.

Some of the high-severity bugs affecting Boa include CVE-2017-9833 and CVE-2021-33558, which, if successfully exploited, could enable malicious hacking groups to read arbitrary files, obtain sensitive information, and achieve remote code execution.

Weaponizing these unpatched shortcomings could further enable threat actors to glean more information about the targeted IT environments, effectively making way for disruptive attacks.

"The popularity of the Boa web server displays the potential exposure risk of an insecure supply chain, even when security best practices are applied to devices in the network," Microsoft said.

"As attackers seek new footholds into increasingly secure devices and networks, identifying and preventing distributed security risks through software and hardware supply chains, like outdated components, should be prioritized by organizations."