Cyber hacking is on the up — but
AS THE t hreat of c y b e r a t t a c k s grow, IT security booms. The sector has seen exponential growth over recent years and according to International Data Corporation (IDC), global spending on IT security could reach $38 billion by 2014.
Good news for Israel. The country is a global leader in the field, home to around 200 companies — many of which are key players. According to the Israel Export Institute, the annual export of IT Security is estimated to be worth around S1.5 billion and predicted to grow at an annual rate of 10-15 per cent as the surge in cyber threats, coupled with greater vulnerabilities due to the more pervasive use of technology, fuel a growth in cyber security spending.
Miky Admon, hightech director at the Israel Export Institute, says Israel has a good eco-system for developing software. “There are many highly-skilled software engineers and people who have a good understanding of software from doing research in security in the military. They take this knowledge to the commercial sector.”
The industry, which comprises around 10 per cent of Israel’s software sector, has been growing rapidly since the 1990s. Richard Anton is a partner at Amadeus Capital, where he specialises in software and It-related investments. He serves as chairman of the British Private Equity and Venture Capital Association (BVCA). He says: “The UK is missing a trick by not investing in more Israeli IT security — their technology is world-beating. The US has embraced it and the UK uses it well in the commercial sector but not so much in the government sector.
“We certainly have a need for it. Cyberwarfare is real. It’s not just stuff in stories.” Israel looks set to continue to benefit as countries are compelled to keep pace with the changing information landscape, putting security at the centre of their operations. According to a recent report from the Cabinet Office, cyber crime costs British business about £21 billion a year. Countering attacks has risen rapidly up the UK agenda and the government’s allocated £650 million to cyber security as part of its four-year National Cyber Security Programme, announced in 2010.
SOME KEY ISRAELI PLAYERS
IMPERVA
Founded by three Israelis, Imperva provides ways to protect high-value business data and prevent sensitive data from hackers.
Headquartered in California with R&D in Israel, it was established in 2002 by Shlomo Kramer, Amichai Shulman and Mickey Boodei. The company’s key innovation has been the development of the data security and compliance solution, Securesphere, which protects web applications from online attacks, secures business-critical files, and mitigates data vulnerabilities.
Imperva employs 400 staff and has received $53.7 million in venture capital. Investors include Accel Partners, Greylock, Meritech Capital, USVP and Venrock. In 2010 the company generated revenues of $55.4 million, an increase of 41 per cent on the previous year. Last year it was the only major Israeli IPO on Wall Street, raising $90 million. Imperva has more than 1,300 customers in over 50 countries, including four of the top five telecommunications companies, three of the top five commercial US banks and over 150 government agencies and more than 100 Fortune 1000 companies.
Imperva’s director of security Rob Rachwald says: “Ignoring Israelis when it comes to software security is like ignoring the French when it comes to wine. Growth in the IT security sector will continue due to the increasing frequency of attacks. Slowly but surely organisations are recognising the need for greater support to protect company data.”
FORESCOUT TECHNOLOGIES
Forescout specialises in network access control, reinforcing company security and compliance rules about what goes on within their internal network. It will block anything suspicious or something that an organisation does not want to run on its network. Forescout also specialises in handling “zero-day threats” — attacks that try to exploit computer application vulnerabilities that are unknown to others or the software developer. Founded in 2000 by three Israelis, Forescout employs over 100 staff with offices in Israel, the UK, Hong Kong and the US. It has been backed by leading VCS Accel Partners, Amadeus Capital and Pitango Venture Capital, among others and revenues for this year are expected to reach $40-$50 million. Clients are predominantly Fortune 1000 companies and government agencies. It works with computer security company MCAfee on certain projects. Co-founder and chairman Professor Hezy Yeshurun,