Israel and “The Startup Nation” slogan: Delivering cyber-security through technical excellence

Over several years, Israel has often been in the news due to its geopolitical dialogue with Palestine on issues of mutual recognition, geographical borders, water sharing and many more. But the country is largely famous for its religious diversity: Judaism, Christianity and Islam; the old city of Jerusalem; the camel market and the famous Tel Aviv University which has supplied recommendable talent over generations. What remains un-noticed among all this is the technological accomplishment that the country has achieved since its significant contribution during the PC revolution in the 1980s. The Intel lab in Haifa designed the 8088 chip which later on developed the Pentium chip revolutionising personal computing.

Talent from Israel has always been appreciated globally. It houses the best of the world’s research centers for tech giants like Microsoft, Google, Apple, IBM, Oracle, SAP, EMC, Facebook, Motorola and eBay to name a fraction of the larger pie. Once Steve Ballmer went to records to say that Microsoft was an Israeli company with almost as much as an American company since Microsoft has so many workers in Israel and the work they are doing is so important to the company's future.

Off the various noteworthy contributions to the world of technology, cyber-security could possibly be the most remarkable triumph. While the most of the technocrats are debating around the “next” possible Silicon Valley, the whole of Israel could easily be the security hub of the world. Though Tel Aviv has been the traditional leaders for housing the bigger technological research houses, Beersheva, a small city in the southern desert of the country has shown excellence in cyber-security research, product innovation and education. The city has an excellent computer science department researching on security (Ben Gurion University is the first Israeli university to offer graduate cyber-security program), has several partnerships with industry leaders fostering innovation and a VC (Venture Capitalist) operation capable enough to fund start-ups. Finally, the city has a robust governmental (local and national) co-operation to roll the wheels of cyber-security development.

So what make the country’s security firms the hottest in the global arena? The answer is here: The growing threats to the government’s website, Israel’s initiative to be the cyber nexus and recommendable cyber-innovation, unique-experienced world-class talent with a large entrepreneual inclination and active acquisitions in the recent past.

Talking about M&A, the surge in the cyber-security space has been equally volatile and interesting. Bigger companies have taken interest given the ground-breaking research across start-ups, creating larger value for each of them. Just to brief on the recent mergers & acquisitions for security in Israel, couple of months back in May, 2015 PayPal confirmed the its plans to acquire start-up firm CyActive for USD 60 million, Microsoft acquired enterprise security company Aorato for USD 200 million late last year, investment by US defence contractor Lockheed Martin for USD 25 million on Cybereason and SuperCom’s plan to acquire Israeli cyber-security company Prevision Ltd as a part of its service strategy to offer security products and solutions to its customers early 2015.

Now the obvious question arises as to how differently are Israeli companies fighting cyber-threats and stimulating innovation. Let’s check this. One of the CEOs of the country’s cyber-security start-up points out that the best way to prevent hackers is to make them fall in their own trap. The company uses a fake attack vector which leads miscreants towards wrong direction keeping them involved in rubbish information. Meanwhile, the security department has enough time to gather information on them looking for the origin of the attack and the nature of execution.

Currently, the market for cyber-security in Israel looks highly prospective with several market drivers pushing the market further up. The country accounts for 7% of the global cyber-security market and close to 13% of the new research & development in the sector. The country’s dedication in developing cyber-defence capabilities has created an individualism in itself, more than enough to challenge the best in the industry.

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