The high-profile cyber attacks emanating from Syria may end up giving Israel’s
economy a long-term boost by raising demand from its burgeoning cyber security
Before the West could fire a single shot towards Damascus over
the use of chemical weapons, the conflict claimed a fresh round of cyber victims
when a group called the Syrian Electronic Army attacked The New York Times and
Twitter’s servers on Tuesday.
Though not the first such attack by the
group that supports Syrian President Bashar Assad, the timing as the world
anticipated a US-led military operation, vaulted the hacking into international
While the initial economic reaction in Israel to the impending
strike was negative – the persistently strong shekel took a sudden dip, the
stock market recoiled, and the risk premium on 5-year certificates of deposits
jumped up to 140 basis points (1.4 percentage points), from 115 a month earlier
– Israel may be poised to gain from the exposure in the long run.
big headlines help, because they are making cyber security a board room
discussion,” said Gabi Tirosh, general partner at JVP, the largest investor in
cyber security in Israel today. “In the past, it was something very technical
that only IT [information technology] staff cared about. Now CEOs and COOs
[chief operating officers] know that the company is going to be evaluated and
measured on their ability to continue operating under cyber attack. In that
sense, the big headlines push up demand.”
More than any other region in
the world, he said, Israel is associated with cyber defenses, a point
highlighted by recent high-profile business transactions.
month, IBM acquired Israel’s Trusteer computer security company for nearly a
billion dollars, while start-ups Seculer and Cybera received upwards of $10
million in investments. JVP, which opened a separate Cyber Labs division in May,
said 100 cyber security start-ups have sought funding with it this year
According to a survey done by cyber security company Kaspersky
Labs, which opened its first offices in Israel in June, “Only 6% of companies
truly understand just how many new malware samples are discovered daily. The
highest rate of awareness – 24% – was shown in Middle East
But the Syrian hacktivists are the least interesting of the
recent developments, said Udi Mokady, CEO of Cyber-Ark, which has taken the helm
as Israel’s largest private security firm since the Trusteer sale.
the first 15 years of the Internet’s growth, he said, the security paradigm was
about “keeping the bad guys out.”
One of Israel’s greatest business
success stories, Check Point, arose to meet those challenges.
may prove a turning point, said Mokady.
“2013 is the year where cyber
entered phase two. Probably the most eventful year I can recall,” he
The first major shake-up was a February report by American security
firm Mandiant, which laid out in stunning detail a central Chinese hacking
operation and linked it to China’s military. The attacks it tracked were
long-term, complex and sophisticated, and the one unit was found to have “stolen
hundreds of terabytes of data from at least 141 organizations, and had
demonstrated the capability and intent to steal from dozens of organizations
The second major shake-up was Edward Snowden, a Booz
Allen US government contractor who, with his high-level access to data, managed
to steal evidence about and reveal the existence of secret US National Security
Agency spying programs.
“The borderline between an insider and outsider
has been shut,” said Mokady, whose software focuses on building a “vault” to
protect privileged access to the most sensitive information a company has. Its
customers include some 40% of Fortune 100 companies, top banks and central banks
including the US Federal Reserve and the Bank of Israel.
between inside and outside has become almost irrelevant, because there’s so many
ways to get in, especially because of social media. The NSA, with an unlimited
budget for security, put trust in a contractor,” he said.
similar protection “are a necessary evil, but accessing privileged accounts are
the strongest point of abuse, whether from Snowden or outside hackers,” Mokady
According to the Kaspersky survey, many companies have still not
come around to the new perspective.
“Three of the four most-widespread
security concerns are about external threats involving malware, network
intrusion, corporate espionage and targeted attacks on corporate IT
infrastructure,” it found.
Like many cyber security entrepreneurs, Mokady
and his partner got their start doing IT work for the Israeli military. But the
ecosystem in Israel is broader; The Office of the Chief Scientist in the Economy
and Trade Ministry runs a program called Kidma to advance companies in the
field, Ben-Gurion University has a graduate program in cyber security, and for
three years, Tel Aviv University has hosted an International Cyber Security
Conference; this year, both Prime Minister Binyamin Netanyahu and President
Shimon Peres made appearances.
“One of the reasons that Israel is very
creative in creating these cyber companies is that we’re literally on the front
lines of cyber warfare,” said Tirosh, whose JVP was a significant and early
investor in Cyber-Ark. “Israeli organizations, including the government, are
being attacked as much if not more than any other organizations out there, so we
look for technologies.”
While cyber-attacks of the past were about
widespread viruses and spreading damage equally, Tirosh noted, “these days the
attacks are tailor-made for organizations, extremely sophisticated, can get into
your firewall, can sit there sometimes a few month or a few years, and then
activate themselves on d-day to take out your systems or get
That increased complexity has boosted demand for more
Daniel Cohen, head of business development at RSA
(the company that bought Economy and Trade Minister Naftali Bennett’s Cyota
anti-fraud software company in 2005), said the combination of military training
and academic focus give Israel a vast pool from which to hire. “As Israelis we
grow up with security at the front of our mind. It’s something that you think
about not just physically, but from all directions,” he said.
said, Tirosh added, “The most malicious threats are not those that you hear in
the headlines. They’re the ones that are covered up, that nobody wants to speak